>> CATHY: THE LATEST REPORT FROM THE BUREAU OF LABOR STATISTICS SHOWED A STEADY INFLATION RATE FOR FEBRUARY.

THIS FOLLOWS LAST WEEK'S DATA SHOWING A LOSS OF 92,000 JOBS.

THE FEDERAL RESERVE IS SET TO ANNOUNCE ITS PLANS FOR INTEREST RATES.

ALL AGAINST THE BACKDROP OF A WIDENING CONFLICT IN THE MIDDLE EAST.

LOUIS JOHNSTON TEACHES ECONOMICS AT THE COLLEGE OF ST.

BENEDICT AND ST.

JOHN'S UNIVERSITY.

THANKS FOR MAKING THE DRIVE DOWN.

>> IT'S NICE TO SEE YOU GUYS.

>> Cathy: SO THE LAST TIME YOU WERE HERE, I BELIEVE YOU SAID THAT IF THERE HAPPENS TO BE A WAR, WE'LL SEE AS PRICES GO UP AND ALL BETS ARE OFF.

JUST EVERYTHING IS KIND OF TOSSED UP LIKE A DECK OF CARDS?

>> I LOOKED, TOO, TO MAKE SURE I UNDERSTOOD WHAT I SAID.

SO GAS PRICES -- OR OIL SO GAS PRICES -- OR OI PRICES WOULD GO UP O $100 A BARREL OR SO.

IT WOULD TAKE A WHILE, BUT THE THING THAT I WASN'T THINKING ABOUT WAS MINING HE STRAITS OF HORMUZ AND BASICALLY CUTTING OFF 20% OF THE WORLD'S OIL SUPPLY.

>> Eric: THE NORM TIMES REPORTED -- THE "NEW YORK TIMES" REPORTED TODAY THAT THE COMMITTEE WAS ALREADY -- >> YEAH, THE BIG REPORT THAT CAME OUT TODAY WAS THE G.D.P.

REPORT.

AND SO THEY REVISE THAT EVERY MONTH UNTIL THEY GET A FINAL NUMBER.

THIS IS THE SECOND REVISION.

AND IT SHOWED THAT LAST YEAR, THE ECONOMY WAS ACTUALLY SLOWING.

IT WAS GROWING AT ONLY 2.1%, WHEREAS IT HAD BEEN GROWING AT 2.5 THE YEAR BEFORE.

AND IT SHOWED INFLATION, PRETTY STEADY.

BUT IT'S NOT ANY LOWER.

THERE'S NO TREND TOWARD PRICES FALLING OR ANYTHING LIKE.

>> Cathy: SO NONE OF THIS IS IN THE MIDDLE EAST IS GOING TO HELP ANYTHING.

>> NO, AND NOW THEY'VE GOT TWO COMPETING GOALS AT THE FEDERAL RESERVE.

SHOULD WE LOWER INTEREST RATES IN ORDER TO HELP THE JOB MARKET OR SHOULD WE KEEP THEM WHERE THEY'RE AT OR EACH RAISE TO FIGHT THE POTENTIAL INFLATION?

THEY'RE GOING TO HAVE TO WEIGH THAT.

>> Eric: ANY DATA ON HOW MUCH A WAR AFFECTS INFLATION?

>> IT'S NOT EASY, BECAUSE A LOT OF TIMES WHEN WE GET INTO A WAR, WHAT THE GOVERNMENT OFTEN WILL DO IS PUT PRICE CONTROLS ON OR DO SOMETHING.

AND SO IT'S REALLY HARD TO FIGURE OUT EXACTLY WHAT IT'S GOING TO BE.

BUT IT'S DEFINITELY GOING TO PUT UPWARD PRESSURE ON INFLATION.

NO QUESTION ABOUT IT.

>> Eric: MORTGAGE RATES WERE UP UNDER 6%, NOW I GUESS THEY'VE GONE UP.

>> MM-HMM.

THERE'S KIND OF AN INTERPLAY HERE.

AN ECONOMIST HAS TO AY SUPPLY AND DEMAND SOMETIME DURING YOUR DISCUSSION.

SO THERE'S TWO THINGS GOING ON HERE.

WE'VE GOT THE FEDERAL RESERVE IS KEEPING INTEREST RATES FAIRLY HIGH, RELATIVELY, BUT THEN THE DEMAND FOR HOUSES IS STARTING TO GO DOWN, BECAUSE PEOPLE ARE SAYING, I CAN'T AFFORD, I CAN'T GET INTO THE MARKET AND I MIGHT AS WELL BACK OFF.

SO THEY'RE GOING IN OPPOSITE DIRECTIONS.

THE MARKETS ARE HAVING A TOUGH TIME BECAUSE THEY ALREADY HAD THE UNCERTAINTY OF TARIFFS AND NOW ADD A LITTLE SEASONING OF WAR ON TOP OF IT.

>> Eric: HERE'S WHAT I'M WONDERING.

THE TARIFFS WERE THROWN OUT BY THE SUPREME COURT, AND THEN SOME INTERNATIONAL TRADE GROUP SAID THERE'LL BE INTEREST PAID AND REFUNDS.

WHERE ARE THE REFUNDS?

>> YEAH, I THINK IT'S ALL IN LIMBO RIGHT NOW BECAUSE THE SUPREME COURT THREW IT OUT BUT WHAT THAT REALLY MERNT WHAT THAT REALLY MERN MEANT WAS TAKE IT BACK TO THE ORIGINAL COURT AND FIGURE OUT HOW TO GET THE REFUNDS.

>> Cathy: SORRY, I WAS CHOKING OVER HERE, I APOLOGIZE.

I APPRECIATE THAT.

SAY, DID WE TALK ABOUT JOB OPENINGS, THAT REPORT THAT WAS OUT, THAT JOB OPENINGS WERE UP MORE THAN 7 MILLION IN JANUARY?

>> THAT'S GOOD NEWS.

ONE OF THE THINGS THAT SEEMED TO BE HAPPENING BEFORE THE WAR BROKE OUT WAS THE LABOR MARKET SEEMED TO BE THAT WILLING UT A LITTLE BIT.

OPENINGS WERE GETTING A LITTLE BIT BIGGER.

PEOPLE WERE QUITTING JOBS A LITTLE BIT MORE AND TRYING TO LOOK FOR JOBS, BUT AGAIN, ALL BETS ARE OFF NOW.

>> Eric: A.I.

CAUSING JOB LOSS?

>> NO, NOT YET.

ALTHOUGH COMPANIES ARE SAYING THAT.

I THINK THEY'RE USING THAT AS A WAY TO MAYBE DO SOME FIRST ROUND CUTS.

BUT I DON'T THINK IT'S REALLY EATING INTO THAT QUITE YET.

>> Cathy: HMM, OKAY.

WELL, IN TERMS OF STATE ECONOMY, THE AG ECONOMY, I'M KIND OF WORRIED ABOUT THAT TOO.

>> I'M VERY WORRIED ABOUT IT WITH THE TARIFFS, THE SOY BEAN FARMERS ESPECIALLY GOT HURT VERY BADLY.

AGRICULTURAL EXPORTS IN GENERAL ARE UNDER A LOT OF PRESSURE BECAUSE THE LACK OF DEMAND FROM ABROAD.

AND PEOPLE NOT WANTING TO BUY AMERICAN PRODUCTS BECAUSE THEY'RE WORRIED WE MIGHT PUT TARIFFS ON THEM AGAIN.

SO I'M VERY CONCERNED ABOUT THAT.

AND THEN THE FEEDBACK FROM THE AGRICULTURAL ECONOMY TO THE REST OF THE GREATER MINNESOTA ECONOMY.

THAT'S WHAT REALLY CONCERNS ME.

>> Cathy: AND GIVEN WHAT WE HAVE, WE'RE GOING TO BE TALKING TO A PERSON HERE RIGHT AFTER THIS ABOUT SUPPLY CHAINS.

AS YOU SAY THE MINING OF THE STRAIT OF HORMUZ HAS REALLY THROWN A WRENCH INTO THIS BECAUSE SO MUCH OF OUR ECONOMY RUNS ON OIL.

>> WELL, AND THE ONE THING THAT'S A GOOD THING FOR THE UNITED STATES AT LEAST IS THAT WE HAVE A LOT OF OIL IN NORTH AMERICA.

SO A LOT OF THAT OIL IS GOING TO AFFECT THE ECONOMIES OF PLACES LIKE INDIA, SOUTH ASIA, SOUTHEAST ASIA, EAST ASIA, CHINA.

AND SOUTHERN EUROPE.

THAT'S WHERE A LOT OF THAT OIL IS GOING.

SO THE UNITED STATES IN TERMS OF THE SUPPLY OF OIL, IT'LL HAVE IT.

THE PRICE IS GOING TO GO UP.

BUT WE'LL STILL BE ABLE TO GET IT.

>> Eric: STAY BY YOUR PHONE.

WE GOT YOU ON SPEED DIAL.