Inflation Is About to Get Worse - Prof G Markets Recap
Podcast: Prof G Markets
Published: 2026-02-17
Duration: 34 minutes
Guests: Mark Zandi, Liz Hoffman
Summary
Mark Zandi from Moody's Analytics explains how the January inflation data misrepresents true inflation due to missing October data. Ed Elson suggests Amazon should be transparent about its significant investment in Anthropic amidst fluctuating stock values.
What Happened
Mark Zandi, Chief Economist at Moody's Analytics, provides insights into why the January inflation data may be misleading. He attributes the understatement of inflation to missing October data due to a government shutdown, which has distorted the year-over-year inflation figures. According to Zandi, the consumer expenditure deflator (PCE) is anticipated to rise, potentially nearing 3% year-over-year, indicating inflation is not only persistent but may worsen.
Despite a headline inflation rise of 2.4% year-over-year, core inflation is at 2.5%, and service prices (excluding energy) surged by 0.4% in January. Zandi forecasts inflation could climb to between 3.25% and 3.5% by mid-year due to these trends and the high pass-through rate of tariffs to consumers.
Ed Elson shifts the conversation to Amazon's significant but undisclosed stake in Anthropic, an AI company. He argues that investors deserve transparency regarding Amazon's nearly 20% ownership after investing around $8 billion since 2023. This lack of disclosure is significant as Amazon's stock has fallen by 17% in the past month, reflecting Wall Street's current reassessment of tech companies.
The episode also explores broader market dynamics as the tech sector undergoes a fundamental re-rating. Wall Street is actively determining which companies will emerge as winners or losers in this new landscape, with some considering Amazon a loser given its recent stock performance.
Additionally, the episode features a segment with Liz Hoffman discussing the recent firing of the DOJ's top antitrust enforcer. Hoffman provides context on the implications this could have for ongoing and future antitrust cases, particularly in the technology sector.
Throughout the episode, sponsors such as Darktrace and Indeed are highlighted, showcasing their roles in cybersecurity and job recruitment, respectively. Darktrace's AI-driven approach to cybersecurity is positioned as a key tool in preventing breaches, while Indeed is noted for increasing applicant numbers through sponsored job postings.
Key Insights
- January's inflation data might be misleading due to missing October figures from a government shutdown. Mark Zandi warns this could understate inflation, anticipating the consumer expenditure deflator to rise to near 3% year-over-year.
- Despite a headline inflation of 2.4%, core inflation stands at 2.5%, with service prices excluding energy surging 0.4% in January. Zandi predicts inflation could increase to 3.25%-3.5% by mid-year, driven by high tariff pass-through rates.
- Amazon's undisclosed nearly 20% stake in AI company Anthropic raises transparency concerns among investors. This lack of disclosure comes as Amazon's stock drops 17% in a month, reflecting Wall Street's reassessment of tech companies.
- The firing of the DOJ's top antitrust enforcer may significantly impact tech sector antitrust cases. Liz Hoffman provides context on how this could alter the trajectory of ongoing and future investigations.
Key Questions Answered
Why is the January inflation data misleading according to Mark Zandi?
Mark Zandi suggests the January inflation data understates true inflation due to missing October data from a government shutdown, which distorts the year-over-year figures.
What is Amazon's stake in Anthropic?
Amazon owns nearly 20% of Anthropic, having invested roughly $8 billion since 2023, yet this significant stake has not been fully communicated to shareholders.
What impact could the DOJ's antitrust enforcer firing have on tech regulations?
Liz Hoffman discusses how the firing may affect ongoing and future antitrust cases against tech companies, potentially altering enforcement strategies and priorities.