got a lot of things wrong about the U.S. economy.

Many economists believed the Fed's battle to# tame inflati rate hikes would trigger high unemployment and a# recession.

Instead, inflation was cut in half.

The## economy added more than 2.5 million jobs, and# the S&P 500 index rose to near-record highs.

Roben Farzad, host of National Public# Radio's "Full Disclosure," joins us now## with a look back at the year's top economic# trends and what's in store for 2024.

It's good to see you, friend.

ROBEN FARZ GEOFF BENNETT: So, that 2023 would see a recession, and# the debate was over how long and how## serious it would be.

That recession# obviously failed to materialize.

What did economists misread?

ROBEN FARZAD: It shows you# what a dis and we're coming off this, hopefully, a chain lockdowns and unemployment spiking to# 15 percent in a week, and then moderating,## and Uncle Sam throwing trillions of# dollars of stimulus at the problem.

So what's going to come out of the other# end?

There's no neat history book to look## at this.

And so Jerome Powell's job, I think the# conventional wisdom was that, if we did have to## suffer inflation, the only way to truly kill# it was to send the economy into a recession,## potentially a deep recession, the likes of which# we saw in the early '80s after that inflation.

So, the fact that we didn't see that,# and we're still growing -- and, yes,## there are indices that show continued misery --# I mean, it indicates proba GEOFF BENNETT: Big tech stocks reclaimed their top# spot as market leaders in 2023.

What fueled it?

ROBEN FARZAD: A.I., romancing this other idea that## there's something as big as the# Internet coming do that it's going to put a lot of people out of# work, but And what do they call them,the Magnificent Seven,## Amazon, Apple, Microsoft, the likes there,# which ro capitalization values, which would have# been unthinkable.

They are the new leaders.

But the problem with that is that they so bloat# the value of the broader market.

I th represent something like 30 percent of# the Standard & Poor's 500 index.

So,## you kind of -- right now, you live by# them and you die by them.

Of course,## they had a horrible year the year before.

GEOFF BENNETT: And yet, Roben, there is this# ec onomy and people's perceptions of it, what# so many Americans apparently tell They have a -- sort of a grim view of the economy# and where it's headed.

What accounts for that?

ROBEN FARZAD: I think a lot of people are# still anchored in pre-pandemic prices.

You knew what $20, $40 bought you at the grocery# store.

And now you're st carton of orange juice is smaller than it was# before, and the price is higher, or what bread or## eggs cost, or taking your kids out for pancakes on# a Sunday.

And you're anchored to that thinking and## saying, until and unless we revisit the prices# from yesteryear, we are not out of the woods.

But, in reality, that's not how inflation works.# People are running victory laps right now,## but the pace of inflation is moderating.# And maybe we have killed inflation,## but the prices are sticky# upwards, and will stay with us.

GEOFF BENNETT: So what should we look# for in the weeks and months ge t a better picture of what's going to# happen i ROBEN FARZAD: I mean, if we were sitting# here a year ago and doing this -- I don remember if we did -- would anyone have told# you, Geoff, le three of the four largest bank failures# in history are going to happen in 2023?

And I would have said... ROBEN FARZAD: I mean, yes.# Gosh, who woul too much money in the accounts, and people got# freaked out because it might not be FDI So they started moving it around on their# smartphones.

But, you would have maybe suggested,## oh, a mortgage meltdown, another economic# crisis.

So there are idiosyncratic thin in this economy.

I think all eyes are on the# Fed.

Will it really get the leeway to bring## down interest rates?

Like, investors seem# to be unanimous right now in thinking that.

Or is inflation going to stay with# us far longer than anybody expected?

GEOFF BENNETT: So how will we know?

I mean,## how will the Fed know wh ROBEN FARZAD: I don't know, if you# go to a man on the street and say,## hey, core CPI's increase is falling,# anybody is They're going to know that they're locked out of# the housing market.

They're going to know that## a mortgage rate at, whatever, 7.5 percent, is# still they were able to get during the pandemic.# But the Fed has its eyes on other indicators.

I know, in his heart of hearts, Jerome# Powell, if he could pull a lever and take## the ebullience out of the housing market, he# would do that, and not hurt credit conditions,## not hurt small businesses.

In reality, the Fed# controls these blunt instruments.

And maybe you## don't want to inject more stimulus into an# economy that in many respects -- go to any## airport, any restaurant, any resort,# right now is kind of overstimulated.

GEOFF BENNETT: Yes.

What ROBEN FARZAD: I thought that there# are finally wage gains for people.## There is a sense of indication,# if you were a service if you were a sous-chef or someone who# for years was kind of biti never asked for a raise, that it wasn't like# national fiat about a minimum wage had to prevail.

You had clout because of the conditions.# You saw what happened with UAW with service## workers.

You saw what happened with UPS.# But at restaurant levels, at retail workers,## there's this whole understanding, again,# that you just can't automate yourself out## of these problems.

A lot of people right# now cannot beg for workers to show u The unemployment is -- unemployment rate is# before -- below 4 percent.

And can you hire peopl without adding to inflation?

I think it's a really# tricky thing to do, but there is vindication for## people who a few years ago were worth $8 or# $9 an hour and now are worth maybe twice that.

GEOFF BENNETT: Roben Farzad.

I alwa (LAUGHTER) ROBEN FARZAD: Geoff, you're GEOFF BENN GEOFF BENNETT: You t