GEOFF BENNETT: As we reported, this has been a big week for the stock market.

Not only did the Dow Jones close above the 40000 mark for the first time today.

The much broader S&P 500 and the Nasdaq also reached record highs this week.

The markets have rallied back from the recent lows of 2022, and the Dow is about 40 percent higher than when the pandemic started.

Roben Farzad joins us now.

He's the host of public radio's "Full Disclosure" podcast.

It's always great to see you, Roben.

So how significant is it that the Dow hit the 40,000 mark?

Because the Dow doesn't tell us as much about the economy as the S&P 500 does.

ROBEN FARZAD, Host, "Full Disclosure": It's a great talking point.

Everything is kind of feeling pricey right now, whether it's housing, crypto, gold, stocks.

Then again, at the turn of the century, there was an infamous book called "Dow 36000."

And it took forever for the Dow to even visit 20000, 25000, much less 40000.

There's another school's thought that says the Dow should be far higher if it was more rationally planned, for example, if Apple or Amazon was added, or if there were other components right now that more represent this economy than the old economy components that are still in it.

So -- but we will take it.

But nothing is really cheap in this really peculiar economy.

GEOFF BENNETT: So what's behind the broader rise in markets right now?

ROBEN FARZAD: Artificial intelligence.

We have a semiconductor company called Nvidia, which is suddenly a $1 trillion, $2 trillion player.

A lot of enthusiasm about the A.I.

boom.

How is it going to affect manufacturing, construction, journalism, media, all these powerful semiconductor chips that are going to be required, the staffing, the consulting, professional services that are going to be disrupted because of that?

So it's almost a parallel Internet.

We have had companies with record profits because they have pricing power.

And oddly enough, I mean, that passes through to stock market investors.

Time was you would worry that inflation would kill stocks.

But if you're actually buying a Chipotle, if you're buying a homebuilder, you have these portfolio companies that are pushing through price increases, then you as a shareholder are partaking in that, hence Dow 40000 and the S&P at an all-time high.

GEOFF BENNETT: So if you take this into account and you add last month's cooler-than-expected jobs report, is this an overall indication that the Fed might finally take this step of cutting interest rates?

ROBEN FARZAD: It's bizarre that we're having that conversation.

You have asset prices at a record high.

Nobody can seem to afford a house.

There are bidding competitions left and right.

And yet the Fed is romancing this idea of cutting interest rates?

I think it speaks to the weakness in the economy, the fact that those who are not partaking in this wealth effect, lower-middle-income people, lower-income people, who have to overmax credit card debt, who are struggling to make ends meet amid this inflation, the kind of the value meal shock at a drive-through at a McDonald's.

The Fed has a blunt instrument.

We talked about this before.

And if they ease into this, does the housing market really need stimulus right now?

Does the stock market need stimulus?

There's a roaring debate going on in Wall Street.

And, indeed, the Fed was supposed to hike earlier, and it's been punting on it.

GEOFF BENNETT: So what I hear you say is that this is not enough to improve Americans' overall perception of the economy.

ROBEN FARZAD: Well, what am I going to do, take my paper stock market winnings?

My 401(k) is feeling puff.

I still get sticker shock.

I go into a Chipotle.

An extra dollop of chicken is $4, Geoff?

Come on.

Guacamole, $4?

I'm not it's not like I have that money.

GEOFF BENNETT: That's real money, yes.

ROBEN FARZAD: That money is on a login thing, but it's not like it's giving me a dividend to deal with the real world sticker shock of gas, housing, rents, clothing, you name it.

I mean, auto insurance, it's a bizarre, bizarre economy.

But when hasn't the economy been bizarre, you know?

GEOFF BENNETT: So how do you see this playing out moving forward?

ROBEN FARZAD: I don't know how we put the genie back in the bottle.

As I have said before, it's the first time in a generation that we have dealt with capital-I inflation.

And the Fed, the Powell Fed was telling us a few years ago that this was transitory, I mean, it's going to pass.

But you get this once-in-a-generation pandemic, you flood the plain with money, and it's really hard to pull all of that back and to normalize in it.

What's a normal interest rate?

What's a normal stock market?

What's a normal housing market?

I think that's a $15 trillion, $20 trillion question right now.

GEOFF BENNETT: Roben Farzad, always enjoy speaking with you.

ROBEN FARZAD: Likewise.

GEOFF BENNETT: Thanks so much for coming in.

ROBEN FARZAD: Thank you.