Good morning! South Dakota Gov. Kristi Noem will be secretary of the Department of Homeland Security, 23andMe cuts 40% of its workforce, and the IMF's Gita Gopinath sees the much-discussed disconnect between the U.S. economy and the way people feel about it.
- Econ 101. Inflation has been a hot topic since the U.S. voted to send Donald Trump back to the White House, with pundits arguing that higher prices drove voters to reject the Biden Administration.
Gita Gopinath, the first deputy managing director of the International Monetary Fund, is a true expert on the global economy. Gopinath was appointed as the IMF's chief economist by Christine Lagarde in 2018; in 2022, she was named to her current role. A longtime economist and academic, the 52-year-old’s research focuses on international finance and macroeconomics. She spends her time thinking about the economic health of the entire world, and not just U.S. elections—but she still shared her perspective at the Fortune Global Forum in New York yesterday.
The U.S. economy is strong, she said, as the Biden White House has frequently argued. "We've seen a global economy that has been resilient in a way that we haven't seen before" through a "pandemic and energy crisis, inflation that shot up, and central banks everywhere raised interest rates," Gopinath told Fortune editor Clay Chandler. Economies have avoided a "prolonged global recession" and the high unemployment that have followed past periods of high inflation, such as in the 1970s.
But Gopinath acknowledges that numbers like annual growth outlook (3.2% this year, down from an average of 3.8%) don't mean as much to everyday people. "Inflation rates came down, which means prices are continuing to go up, but at a slower pace. So if you look over a four-year period, you have seen households who looked at the how much they're paying for their goods...and said, ‘Well, everything is a lot more expensive,’" she said. "So it's not surprising the way people feel versus the way I'm describing how the global economy is."
The rest of Gopinath's conversation covered topics like what to expect from Trump's tariff program ("We have to wait, once the policy announcements happen, then we will analyze the consequences of that," she said.) and the impact of the economy on AI adoption.
Emma Hinchliffe
emma.hinchliffe@fortune.com
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