This is the Bloomberg Surveillance Podcast.
I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. Let's get up front of Carl Worcadon, I got a
bigger broad up question from Let's Go narrow tomorrow. How do you interpret average hourly earnings within the forty seven other measurements of wage growth that are.
Out there well, Average early earnings are telling us that we are not there yet in terms of the FED being able to declare mission accomplished. Average oarly earnings running at four percent are still too hot for inflation to be sustainably at a two percent run rate, especially as we look at the core numbers. And even more important than average early earnings is the employment cost index wage and salary component that's running at four to six. It needs to be at three percent or less to be
consistent with the two percent core PC inflation. So we are simply you know, there's lots of good progress. The glide path is looking in the right direction, but there is still further room to run before we can feel more comfortable.
Karl, I got to go to sixty thousand feet here.
You're really good at this. Peter Drucker, nineteen ninety one on the new productivity. Do we have any clue given our labor data that we're in right now, what the productivity, the efficiency, the efficacy of our labor is.
I would suggest we're flying blind.
I think we are still flying blind post pandemic tom and we've seen some wild swings and productivity due to labor shortages and then the rebound and participation. Lots of kind of wild swing factors are really distorting the numbers. That big surge we saw in GDP growth in Q three, of course distorts productivity. That's not the beginning of a trend. That was a one time flash in the pan. We can see that in the tracking forecast for Q four.
So there really is still a lot of instability and noise that we have to look through to get a clearer perspective. Now, what I think does give us some sense of the trend. When we have extended periods of labor scarcity and high labor costs, typically that pushes businesses, encourages them to make the kind of productivity enhancing capital investments that do lead to a productivity boom. But we're
still not out of the woods yet. The labor data does look to be moving to a more balanced state where maybe we have less labor cost pressure six months from now, for example, and then that would say maybe there'll be less of a productivity flare up than we might be anticipating. Of course, AI is a big wildcard, but I think it's a little bit too soon to be factoring that into the macroeconomic data on that kind of.
Scale if you are just starting the program. We did just get a one two punch better than expected jobs data with the ADP orport coming in hotter than expected and that initial job was claims coming in lower than expected.
You could see an extension in the move with ten yure yields now creeping closer to that four percent three point nine to nine percent if you round up about just less than one basis point, Carl, how much are you looking at a market that is screaming that we are not going to have any recession anytime soon without some sort of exogenous shock.
Well, I think the market signal is very important, but that market signal will be very subject to the macroeconomic data trend. And we are certainly moving to a slower pace of activity than where we were, for instance, in
Q three of last year. So it is a slower profile in the first part of this year, which will mean less hiring that puts pressure on margins and revenue gains and whatnot, slower nominal GDP than those things tend to slow down as well, So it will be a challenging macro environment, which will be an environment in the first half of this year where the macro variables really do drive the narrative, as we'll get some clarity on whether it's a bumpy landing, soft landing, no landing, et cetera,
et cetera. And so I think we do have to pay very careful attention to that tug of war between what markets are seeing in terms of FED easing and whatnot and what the macro data are suggesting. And as we look at the claims numbers, right, this is consistent with what we said ahead of the data which is it's not layoffs that are cooling the labor market at the moment, it's just a reduced appetite for hiring.
You mentioned the market signal, Carl, and I think that really follows nicely onto what we saw yesterday in the meeting minutes. J Powell kind of dismissed this idea of financial conditions in the December FMC meeting, and then he inserted that back in, or somebody did in the meeting minutes for suddenly they're worried about this easing and financial
can conditions. Do you think that basically the implied rate cuts that we have seen priced into the market through the end of last year have made it more difficult to really achieve that price stability in a way that we see with ongoing labor market strength.
I think that the easing of financial conditions, which is pretty substantial. Our own BMP Financial Conditions Index would say that, you know, the moves from the highs are equivalent to maybe one hundred basis points of FED cuts. That complicates
the exit process. Now the FED knows full well that when they shift from the risk of there being more hikes to either being on perma hold or moving to a lower policy rate, that there's always going to be that kind of easing of financial conditions that takes place, but absolutely this does complicate the process. We heard that in the minutes, the line that said, you know, the easing of financial conditions, you know, the scope or the
magnitude of it could jeopardize the Fed's path. If we have a real reacceleration in the economy, then that last mile in the inflation fight becomes more difficult, and that's going to slow down the FED in that process. What I thought was interesting in the minutes was the you know, the usually the FED has the boilerplate language, if it's hotter, we'll go higher, if it's cooler, will go lower, and
they didn't do that. It was i think on page eight of the minutes where they talked about, you know, kind of maybe empty or somewhat empty rhetoric about saying
that you know, there's a possibility of more hikes. Then they went on to say there's a possibility that we could take longer to pivot towards cuts, But they never then added the other side of the scale, which is and if things are cooler, we could go sooner, so that tells you they're very sensitive to the market reaction to the December press conference.
Carl, the fact that we were all wrong last year and that we got this wonderfully buoyant economy and right now, John, a three point eight percent statistic on the unemployment rate. Guestimate for tomorrow, Carl, are we fully employed? I mean, there's a lot of Americans flat on her back, but are we fully employed in America?
As we look at the aggregate data right the unemployment rate below four percent, If we look at the wage trends, I think it's pretty apparent that we have been in a period of full employment and that largely explains those
wage pressures. Now the labor market is cooling. So while we may be fully employed now on the eve of the December jobs report, by the middle of the year or later, I think that there could be a hotter debate about whether we still are at full employment, because we will see those wage pressures coming down as the unemployment rate drifts higher, and that will create some slack, which is a welcome development after the last two years post pandemic environment to get us that last mile back
to two percent. Of course, full employment is very important, but as Jerome Powell reminds us in nearly every press conference, right, price stability is the bedrock or the foundation of a stable act. So we can't just push the unemployment rate as low as we can go without taking into consideration
that trade off with the with the inflation dynamics. And that was actually something that was highlighted in the Minutes yesterday as well, where now policymakers are starting to think about the tradeoff on the dual mandate, you know, so there's more weighting to both factors on the dual mandate relative to where we were over the last several quarters.
Hey, Cole, just quickly, just to recamp expectations tomorrow.
What are the numbers for you in a team.
Well, I'm eyeing this hissing sound in the labor market. We're gradually losing momentum. So I think one sixty five ish on the number, which now turns out to be just slightly below the consensus forecast, and I would watch for some slack and the unemployment rate. I actually think maybe a two tenths increase up to three point nine percent with still those persistent wage pressures in the background. Keep in mind, inflation is a liking indicator, and so is labor inflation.
Colt Rick adonad it Happy New Year, sir, cal Ricotono, BMP parapath joining us now, Katy Kaminski, chief research strategist of Apfasimplex, punishing that bond market, Katie, you were sure, We talked about it. It felt good for a while. Then this market turned, Katie. I guess you're still sure after the pain of the last couple of months and what changed for you?
No, trend signals have finally turned long, and I think this is an epic signal for the market because we have been short for nine quarters. This has been one of the longest shorts in trend falling history over the last twenty to forty years. And I think this is important because it signals the end of the tightening cycle and it suggests that we're going through a regime change and that we need to start looking at the next
phase of the bond market. And for me, that's looking for a steepral yield curve and I'm trying to think about what is going to be the catalyst for that as.
The next phase of this trade.
It's one thing not to be short, Katie, it's another thing to be aggressively long Where does trend following signal send you?
So right now there's still rather muted.
But I think the key that we're going to have to watch is how fast are cuts coming? And I also think we have to be a little bit nervous too. We need to watch what's happening with supply and treasuries, to look at the end of the curve to see what's happening there as well as we try to navigate this year as weaker data might come in and as
we try to roll over debt throughout the year. So I think this is going to be a year to watch the shape of the curve and to see where the curve actually settles out.
When you talk about a steepening in the yield curve, it can come from two places. It can come from short term yields coming down in response to FED rate cuts, or it could come to from longer term yields rising aggressively. Are you basically saying because you are no longer short treasuries that you see it more coming from the front end with more aggressive rate cutting cycle than people are expecting.
Well, that's the trade that everyone's focused on and I think that's where everyone's focus. Now you're just mentioning it that you know, we're focused on how soon our cut's coming, and when are we going to see the shorter end of the curve sort of deep in so that we have this this more stepl curve, I think where you have to worry. The typical thing that would be the challenge is if we start to see more challenging effects on the long end of the curve, aka you know, poor,
poorer fixed income market on the long end. So that would happen if we had trouble in terms of valuations for debt, and so that would happen if we had poor, you know, poor auctions in the treasury market. So that's something I'm going to be watching this year.
Kay, Let's talk to Global Wall Street right now. That hangs on your every word on trend based CTA technical analysis. So we had a trend to a higher yield than a tenure we've rolled over the indeterminate point I call soup. Are we in a trend of soup now indeterminate? Or can you state that we have a trend towards lower yield? Is a trend in place of higher prices and lower yield.
So we hit the inflection point and we've started moving towards longer, longer signals, especially in most asset classes, particularly equities. We've also seen very strong short signals in the US dollar, so we've really seen that inflation trade that we were seeing for pretty much two years dissipate and move past a point where we're moving towards a new trend.
You sound like Luisa Mada there talking about dissipation. What will it take to get trend in place where there's a permanence to week dollar, a permanence to lower yield.
I think rate cuts as expected would definitely continue that trend strongly, of course, not as weak data if we continue to see this sort of soft landing be a possibility, and I think that is going to be in question, of course, because my general view this year is that we're going to see a lot of variation in outcomes. I want to point out one key fact a bond volatility still remains elevated and bond stock correlation still remains positive.
Those are two technical factors that are very different than the classic regime, so we need to navigate those first before we can figure out sort of have we moved to sort of back to where we were or are we moving somewhere else?
Ok, Katie, let's finish that. We caught it with someone. Just yesterday from JP, Mork and Lisa mentioned them. Phil Camporari talked about sixty to forty being back and the forty with an amble you to play defense.
Is there any reason to believe that it is back?
You're seeing anything that suggests that correlation is going back to what some people might call slightly more intuitive.
I think everyone wants that, but I think the worry is what I just said. We're seeing very different asset class relationships.
So we need to.
Watch inflation and watch for how inflation behaves because inflation changes the nature of asset class relationships. If we should see inflation have upside risk potential, we will see more challenge that sixty forty narrative if in fact we can keep inflation under control.
I agree the sixty forty is.
A good place to be, but so watching inflation and keeping that in check, And that's why the Fed is probably being more conservative and being careful because they want to make sure that's the case.
Casey appreciate the update. Happy New Year. It's going to catch up. Katy Commnce to give appasimplex.
Edward Mills joins US ed Mills, Washington policy analyst at Raymond James, and you've got a very domestic note today with domestic issues. John Ferrell mentions the idea of our foreign wars. Is there a foreign policy stance among Republicans and Democrats on Capitol Hill.
Tom, They're trying to find that, and I think that they do wrap it from a domestic agenda. What we're looking at for a January agenda is not just funding the United States government, but it's the national security issues.
And so you have the supplemental.
Looming in the background for Israel, for Ukraine, for Taiwan. But Republicans are saying, if we're talking about national security, we also have to talk about the border. So that's why Republicans were at the southern border yesterday.
Right pushing four those border protections.
But the problem for them is that they continue to lose members and they're down to two hundred and nineteen. Usually you need two eighteen to get something through the House. So they have really strong border policies, but right now they don't have the votes.
What does the Democrat party view on a national security issue at the border?
Do they agree?
Is it a nuanced do they flat out disagree with Speaker Johnson?
So I think it's a little bit nuanced.
In the bill that filled in the Senate in December, there were some border funding provisions. What we have right now is that Democrats understand that they need to do more on the border. There's been negotiations, but they certainly don't want to go as far as House Republicans have been pushing for. They call it HR two, that Protect the Border Act. That's real changes to asylum, that's changes to kind of e verify systems in the United States,
that's rebuilding the Trump border wall. Those are a step too far for Democrats. What I think we have to see is that Democrats have to go further than they're comfortable with to get the other provisions. But we are in that period of trying to figure out exactly where that line is, and so we're going to go right up to it and potentially have a government shutdown come January nineteenth or February second, the two funding deadlines that are approaching very.
Quickly here, That's where I wanted to go in there seems to be a sort of a subtle shift in the Republican party moving away from just tying some of the border kinds of security provisions to funding for Ukraine and Israel, to moving it more broadly to shutting down the government if they don't get what they want. Does that make it so much more likely that we are going to get the government shutdown? It doesn't even matter.
It's a great question, Lisa, and I think that we're kind of right on that precipice of either grand bargain or bust because we probably have to watch what develops in the Senate. But you do have this sense that Republicans want to fight, that they want to show that they are pushing for border security and want to push for more than what Democrats want, and sometimes by having
that shutdown really elevates their point. However, Republicans also want to have the ability to say they got something done that when they run for reelection here in November, that they can point to an accomplishment, and so that's where
the Grand bargain comes in. There is still a strong desire in DC to support Israel, Ukraine, Taiwan through defense supplemental and if you can put that all together, and we have to remember that even if we shut down the government, at some point, we're going to reopen it. So it's just a question of how far and how much drama there is. But at Raymond James we always do point out that in past government shutdowns, on average, the S and P five hundred has been up by three point two percent.
So from a market perspective, we.
Kind of tend to discount the fact that the government could shut down because it always reopens.
Talking about drama, Donald Trump, we're talking about January fifteenth, We've got the Iowa CAUCUSUS. Then we've got New Hampshire on January twenty third, where we have the first primary in the country. How much does it change the calculus if Donald Trump, as expected, wins the primary races in those two states and we do get the sort of feeling that he once again is at the helm very much of the Republican Party.
So, Lisa, I think at that point what you would see is that the voice of Donald Trump becomes even more important in congressional fits.
Right now.
A lot of the times when he sends out a message or sets of policy stands, it's.
Noticed in DC, but it's not truly followed.
If he re establishes himself as the head or the de facto head of the Republican Party and looks like it's going to be the nominee, then if he comes out and says kill this bill, don't vote for this, you have to fight stronger on border security. That makes it much harder for Republicans to cut the deal. And so that's putting pressure to try to do it sooner rather than later. If they can get it done by that January nineteenth deadline, that is after the Iowa caucuses,
but before that, momentum could build. Alternatively, if you have someone like a Nicky Haley emerge, I think the markets would start to kind of search because there is a sense that she is a stronger candidate against Biden, the likely Democratic nominee, and it gives a little bit more wiggle room for House Republicans and House or Republicans generally in DC to potentially cut that deal.
That's the range of outcomes said, You've got to tell me a base case for the next month.
What a thing?
So, yeah, the base case is drama breakmanship. It does seem like we could easily get that government shut down. But from a market perspective, yeah, I tell clients to kind of pay attention to.
That longer term provision.
I do think we will get government funded, we will get defend supplemental, we will get something on the border.
It's just a question of timing.
John, Thank you, buddy.
Going to catch up a new year, Sir at Mills there of Raymond James. Steve Trent says American Airlines, American Airlines analyst over a city is still optimistic. Right in this premium economy, traffic flow, international momentum and loyalty and co prended card strength should continue to support network airline revenue TK. That is the constructive view from Steve and a team.
Mister Trent owns a high ground on this. You do this with the grind at Stuyvesant, then under Pennsylvania, then you go north into the middle of nowhere where there's no airports, tuck, and you go someday, I'm going to be an airline analyst. Trent darkins ador, good morning. Great to have you with us here. What's the level of enthusiasm You have a buy in United you published that yesterday. People think you're nuts on this how do you have a buy on an industry that seems so believed.
No, and thank you for having me in. Happy New Year to you guys. I think I have enthusiasm in spots. So when we look at what's going on in the space right now, you're really seeing a lot of the economic value going largely to two airlines, Delta and United. If we're talking about the United States market, you can actually extend this thesis to let's say Air Canada north of the border, and let's say further down south Panama's
COPA Airlines, where international long haul is doing well. The network airlines have adapted very well to what I would characterize as.
The new normal.
We have most consumers only in the office three days a week. That has resulted in a blended travel let's say, with very good demand indicators for premium economy. Basic economy is a different story. Your domestic is also a different story.
You and I were weed one this and the answer is Robert Crandell changed the business years ago to American Airlines. You sat out there and said, we're doing price discrimination.
Of that, what our audience knows.
Is tickets are cheaper now than they were a year ago. Two years ago. How do you have a buy in the stocks if they're giving away seats again.
So I think there are pieces of the space where we're not optimistic. We certainly don't have a buy on the whole group. We're far less sanguine on those domestic oriented carriers. But when one looks at the supply situation. Now, if you go back to twenty nineteen and compare domestic capacity versus the US economy, you roughly had twenty three dollars and twenty some odd sense of economic activity pervailable seat mile. Go to twenty twenty three, we had roughly
twenty eight dollars of economic activity prevailable seat mile. So capacity has grown, the US economy has grown more. I think the argument we're trying to make is not to buy everything, but to be selective in those network carriers that have very specific attributes such as very strong loyalty
and co branded card. We think that's helped these carriers to divus their earning stream international long haul and this very good setup in terms of their cabin offering blended travel, you know, economy plus that's really been the big mover.
How much would oil prices have to rise for you to get less constructive at American.
You know, in terms of Delta and United those are the really the two I like, and you know, less sanguine on the others. Quite frankly, I think if oil prices rise, it would really depend how they rise. Do you get an oil price rise because there's better global economic activity, I'm not necessarily perturbed by that because you have the likes of Delta COPA that can price that
in to business travelers and higher end travelers. If we get an oil price spike that you know, creud goes up twenty bucks a barrel overnight, that's a whole different ballgame, which is I don't see anybody predicting. But if we in that instance, for example, that's actually a tough situation to the group because it's very hard to pivot maybe in lesser Southwest airlines and at least temporarily you have a large hedge position.
At least has talked about this, the way these airlines are essentially just credit card companies now with airplanes bolted onto them. Who's absolutely now their lawless program. When you look across these airlines, these companies, who's got and out down?
Delta's really I think head and shoulders above most everybody. So if one looks at their brand, you know they were thinking back to those you know, terrible pandemic days. They were the very last airline to finally unblock that metal seat as consumers were just starting to get comfortable again with sitting next to strangers, even strangers wearing masks. Delta is the only major US airline that did not
diluted sequity holvers during the pandemic. No convertible debt offerings, no equity offerings.
No seats in their lounge.
Bramo, but fell off her chair there when you're talking about give us an anecdote on.
Delta, Lisa, No, I mean, listen, this, get the smallest violin possible out. But I'm just thinking, you know, of all of the massive lines outside the Delta lounge with people bringing their American Express card and pulling it out and saying, but I'm the real guy. I mean, how much is this really going to diminish the people who are loyal flyers?
You know what?
And that's actually a hallmark of success right there. So if you look at the you know, the loyalty program revenue, they did four point one billion and twenty twenty one, they did five and a half some add billion. In twenty twenty two, they're probably going to close in on seven billion. They're gonna I think the print for four Q is on January twelfth of theirabouts. So that trajectory
and what they're doing on the co branded card. They have such a good brand and for any large bank, they're probably the best counterparty and get very good economics on this program.
Fast forward five years from now, how much of the revenue of a delta is going to come from the card effort?
Yes, I think if one looks at the pure economics of it versus just the stuff that runs through the income statement, sort of two different pieces of flow there, I think that, you know, you could have something conceivably five years from now that's a good you know, ten to fifth teen percent higher than it is today, which on the surface doesn't sound like that big a deal, But when one thinks about what kind of margins you get on co branded card revenue, you know, versus main
cabin passenger revenue, you know, the mixed impact is big. You know, the d risk of the earning stream is also significant, you know, So once again I'm not constructive on any every single US earline. There are two I really like, and then I'm less sanguine on most of the rest.
I can tell you the loyalist programs, the actual loyalist Tom hate this. The people who actually fly on the planes, they hate it because they believe that if you can acquire the same state, it's just my spending on a credit card.
It's just a cheat code.
It's not the same as actually being a loyalist and flying every single day on the planes.
I know you're one of them. I know a lot of people following this program. I mix the same as well.
I'm mixed because on one hand, it's a democratization of a very otherwise sort of gross system where some people are preferred and that you know, are allowed in for and you're better and this and that, like it's sort of this. It's sort of a social experiment when you go to the airport and people start getting angry and start, you know, filing up and pushing each other to your good point.
I had a round trip recently where there was not a single available seat in the lounge both ways.
As well.
Steve Tron, I've got to talk to you about the dangers that.
Are out there.
All of us were just foundationally shaken by what we sawt I needed in Tokyo here in the last couple of days, I think of kaivon rumored Cow and you're a great colleague here in the aerospace and airline game and the dangers that are out there. Kai lived decades ago, is well on an ugly flight. How safe our runways with all of your knowledge, all of your intake, how safe are the runways of American airports?
Yeah?
Great question, and my heart goes out to you know, the folks over in Japan, not just for the play and accident, but the earthquake itself. When one looks at the system in the United States, we have very strict rules here, very strict rules on air traffic limitations on how many air traffic movements each controller is supposed to monitor.
So I don't have big concerns about the safety. There are definitely bottlenecks out there in terms of the supply of air traffic controllers, and there are arguments that you know, US air traffic system to some extent is anequated. You know that being said, how have officials responded to it? They have forced the industry to reduce air traffic movements
in some places. So I think that's unfortunate for the consumer on some levels, but I'm happy to see them doing that in terms of you know, safety first.
Yeah, stay, this is tring to catch up. Thank you, sir. It's going to say it after year.
You think trend that of safety.
Let's get shor it right now, Sarah Hugh and joining us, and this is something John Farrell has not forgotten about I have. And they're a europe ahead of Europe in America's research and standard at charge. I want to digress here, Sarah, away from the US economic data. We're going to see we haven't even addressed at the beginning of the year the challenges of Christine la guard. How are her inflation challenges different than those of Jerome Power.
Sure that there are too many differences in terms of the challenges because in both cases you have a strong labor market, and the question is, you know, are is the fact the ECB are they taking a different approach
to those strong labor markets. We had a very very clear message from Christine Laguard at the last ECB meeting that domestic inflation pressures with a concern that full employment and ongoing labor market pressures were a concern, and that that's why the ECP is cautious, why they're not talking about rad cups. The FIRDS view seems to be, you know, we're getting a soft landing, inflation is coming down, We're not too concerned about labor market strength. But I would
note what happens to wage growth tomorrow. We saw for the November payroll report AVAGALLI earnings up stronger than expected, so that could be a concern going forward.
Let's go right there, because I was a thought the high point of your research note on wage growth.
You take average hourly earnings AG.
I bring it over to ECI, which is wages and benefits. What's the efficacy of AG for you tomorrow?
At eight thirty, I think that I mean we are expecting a slowdown. To be fair, we think that we'll see softer monthly growth, but that's against a backdrop of last time around higher year on year, higher monthly, higher on a three month and six months annualize, all the sorts of measures.
That the Fed likes to look at.
And the reason why I think it is still very much worth taking account of what's going on there is because the disinflationary forces that have weighed on inflation to date, goods inflation, imported inflation, commodity prices, we're starting to see those reverse. Now we're seeing a pickup in commodity prices. Obviously geopolitical factors are behind that. Higher freight costs, so real jump in freight costs when we've got used to seeing them really flatlining over the past year or so.
And what central bankers will be concerned about is that you haven't brought your core inflation down far enough before the benefit from weaker energy and food prices that starts to reverse, and your headline inflation catches up and starts to take over.
So the wage earning.
Section is very important, not just for the FED, but also for the ECB. But I would say at the moment, central bankers are taking a slightly different slant on what's going on and those fundamental drivers of domestic inflation pressures.
With that mind, Sarah, when you compare and contrast you and a team, the difference is between the ECB and the Federal Reserve. How different are the thresholds for rate cuts? Who goes first? What if you penciled in for twenty twenty four.
Well, we do have.
The ECB going first, we think that they'll cut by the second quarter.
They're shrugging aside.
Weakness in the economy, but we think that that is going to become more of a factor. Obviously, inflation this time around for December is likely to nudge higher year on year because of base effects, but the broad trend is moving in the right direction, and ultimately we think that by the by the second quarter, by the next set of forecasts that we get, I guess for June, they will be signaling clearly that there will be inflation
on target over their time horizon. Possibly they get there a little bit earlier, but we do see a sort of more cautious approach from ECB.
So we think second quarter rate cups for the Fed.
We've got the third quarter factored in. But I have to say that the commentary that we had at the last FOMC seem to be giving greater emphasis to.
The perhaps the.
Underlying growth of the economy and potentially the need to not over titan or not hold rates too high for too long, which could suggest that they move earlier than the third quarter. Obviously, markets are expect that they could move as soon as the next couple of months. We think that that will be too soon the minutes, I suggest we're more cautious than maybe than Pal's commentary after the last FMC meeting.
That tug of war between market expectations and communication from the FAT continue. Sarah Grads catch ump. Happy New Year, Sarah.
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