jim paulsen, why should we calm down?im: i looked at the atlanta fed's 10 forward consensus inflation expectations, and kind of asked, how does the economy do when inflation expectations are higher or lower. we are worried about it being higher right now. what i found was the most everything in the economy, real gdp growth, real disposable personal income growth, consumer confidence, job creation, profitability, all of that does better when the inflation expectations were 3% or above than they do when it is 2% or less. it is interesting because the fed's target is 2%. the whole idea is to bring inflation back to that level. the reality is when you look back historically, economy has done worse when we tamp down inflation expectations to that low level. we can't handle runaway inflation, certainly not 6%, 7%, eight prevent inflation. that will be disastrous if it is sustained. but if we fall back to 3% rather than going back to 2%, that might actually be a good thing. i think depressing inflation too much can depress anima

kailey: jim paulsen remains relatively optimistic, and he said this isn't so much a sugar high as it is a fundamentals high. it is better corporate earnings shoring up the equity market. there may be concerned about the fourth wave in europe, and you're seeing that show up in the euro and affects channel -- and fx channel. lisa: taking a look at the euro, i find that interesting. why are stocks so resilient in the face of potentially a fourth wave, especially with the vaccination rate here in the united states? tom: a huge economic data dump. we will see that wednesday as well. on the day, green on the screen. angela merkel really putting a damper on that with discussions of german lockdown. i use that in a light journalistic phrase, not the language she actually used. dow futures up 77. the yields base, 1.94% on the 30 year. the curve now part of the story. 100 the basis points in the curve gets my attention as well, with some dollar strength this morning. javier blas scheduled to be with us on oil and on the european electricity crisis. we will do that in 15 minutes. right now, we

joining me how it affects the markets, leuthold group, jim paulsen.onventional wisdom that inflation will be persistent. you were on that train before anyone else that i knew but why are the markets ignoring this still? >> well you know i think that, i think it is going to be persistent and i think it will end up at a higher level throughout the rest of this recovery but i do think it will probably calm down from where it is right now. i think some of these supply change issues will get better next year and inflation overall was, will roll over next year and i think the market is reflecting that. if you look back historically, charles, i did this earlier this week, all the way back to 1870 we have had a burst of inflation above 4% quite frequently in u.s. history, more frequent than not actually over time and the vast majority of these except, really two times, world war i and the 1970s, they were proved to be just temporary and they came back down to earth within two years, almost every time. i think the bond market is doing what it has done historic