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We're right now in a contraction. the first quarter contracted 1.6% and this morning you've got the atlanta federal reserve expecting a contraction in the second quarter of 1.9%. goldman sachs is expecting growth but taken the growth level down. in a nutshell, the economy is in a contraction. we're not growing. however, the jobs market so far has not been impacted too negatively from the sticker shock of inflation. it has impacted the corporate earnings sector and impacted the stock market. there is a wealth effect there that could play into all of this. but we'll see if this is the last stron...

Underappreciated? >> that strength is fantastic, and it's resilient, but we shouldn't expect it to last forever. there's something called the wealth effect. we've seen s&p drop 15%, housing prices starting to slow down in terms of their double-digit impressive expansion annually, and the consumer has negative real wages which means that inflation is outpacing the increase in his or her wages. so the combination, i think, of the negative wealth effect, knell regular -- negative real wages, consumer confidence is dropping precipitously, and combine that with the tightening financial -- when you ...

Tax increase. let's bring in larry glazer. you see the damage going on to the markets. the fed wants it. i guess the white house accepts that we have to bring in the so-called wealth effect. it's really crushing the housing market. that's what i'm concerned about. more americans have homeownership than own stocks. if they tinker with this thing, how bad could it get? listen, you want to cool housing prices. what if we derail them? >> a year ago the fed talked about inflation. inflation is much worse than they talked about. excessive government spending contributes to high prices. that's what w...

You look at the markets today obviously a real concern about inflation. >> it's just a citizenned repricing of just absolute soaring energy crisis which not just at the gas pump but thousands of products that use petroleum higher interest rates. when i say higher they have gone vertical. now you add in something that i think has been a big part of the economy over the last couple of years. the wealth effect, which is now in reverse where the many are looking at the 401(k)s and seeing much less in them 30 trillion of global wealth come down. markets economy consumer not used to any of this and ...

Be going up in some shape. and then you have the inflation that was already before ukraine and now real inflation in many industries is much higher. so you have less money, you're spend ing more on your loans. you're spending more on the weekly shopping list. you're spending more in every aspect of your life, and your wages may be going up marginally because we care getting some improvement on that that. you're going to feel poorer because of the wealth effect. you're going to feel poorer. this morning there are many people, ourselves included who are looking at 401(k) and thinking i'm not goi...