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Academy right in the following. While the market is right not to get too concerned at the moment, there is a risk that is being very complacent, he joins us now for more peke Monic morning.
That risk always exists.
Let's talk about whether the base case right now is justified or complacent.
I think it's heading towards complacent. I think the administration seems very comfortable with tariffs. They're coming out talking with them. Let's not forget Trump A you really like tariffs. And I think this whole taco thing is overdone. I think he pivoted right. It wasn't going well, stock market was coming down, he had other things to focus on. He pulled back. Now he's had a few big wins. I think the success that we had in Iran very positive
for him. Getting NATO to agree to five percent except for Spain, that was a very positive for him. Getting the big beautiful bill turned into an actual law as positive. I think he's going to take another cut at this and the problem is, I think for markets, we're not going to get a quick reaction. We might not even get a reaction after August first, assuming the tariffs go in. Because last time the tariffs were actually and I believe for some number of hours before they pulled back. So
I think this could drag on. I think it's going to be more of a slow bleed. Unfortunately, there's a larger question here.
Is this just the market saying, look, we've been fooled before. What are you doing We're not going to buy into these rates actually going through.
Or is this a market saying.
We've seen how companies absorb these tariffs and it isn't going to be as big of a hit as many people initially thought.
I think it's the former. I think people are just like, we got fooled by this, we all got paniced. We all believe the Main Street versus Wall Street, the rhetoric I was coming out of the administration that they would go forward. I think when you start seeing this one, it's too early to expect much of a hit onto Wall Street. Right even at ten percent, one company's had a lot of ability to pre order stuff that helped
take care of it. You've seen a lot of USMCA goods get compliant approved a USMCA compliant that's where used effective tariffs. And you look at the tariff revenue, I think it's about eighty billion over the last three months. That's a drop in the bucket in terms of inflation or anything. So I think we will not start seeing the inflation effects or the impact on corporate earnings until a few more months down the road.
Which is the reason why we've been talking about how pivotal this week is. How much are you concerned about it being a headfake if we don't see the real ramifications from tariffs, either in consumer inflation or in bank earnings in particular.
You know, I'm not as worried about the earnings. What I'm looking for a little bit is what are people seeing globally, what's the global economy looking like. We talked so much about the domestic economy. What's it like, what's spending going on? And are any of the US brands seeing a pullback and spending that's me is one thing
we've seen it in tourism. Is it more widespread because that would be a bigger concern to me that you're starting to see this kind of pulling away from the American brands, which would be very consistent now with what you're reporting this morning that other countries are trying to figure out, Okay, what trade deals can we do away from the US.
So what do you like then in this moment if you don't think the president is just a negotiating mode and potentially some of these rates can stay.
So I still like anything that's really involved around national security, national production, right, And I think last week we saw MP ticker symbol got an investment from the Department Offense. There's a little bit of ad hoc that the Department Defense had that money. But maybe we start seeing the sovereign wealth funds that we talked about at the start of the administration start turning into something where you start seeing investment where the US public actually gets to take
advantage of the growth. We have to have rarest and critical minerals and not just the commids, the process and refined versions of those. We need chips, we need pharma, all those things. I think that's where I want to focus because the President could juggle throo things right, push hard on tariff's on the one side, domestic growth and those things do take away jobs from China, they bring jobs to the US, so they fit a lot of it genders a lot of it's deregulation, which again is
right up the President's alley. So that to me is the positive that we last week in that investment of the Department Fence is just the tip of the iceberg.
Do you think the fifty percent tariffs on copper is good and it stays.
I don't know that it's good at all. Again, it's something we import a lot of and we need to and we're not going to be able to turn it back. But yeah, I think he stays. I think he tries to grow some domestic businesses around that. But it's going to come through investments, not going to come out through handouts, their subsidies.
Quick final word on CPI tomorrow morning. We've had a string of softer that expected rates to we get a fifth tomorrow morning.
I don't think so. I think we've kind of bottomed out on it for a little while. I think there's been some pressure on, you know, through some of what's been going on the USMCA. I think people push some prices through, So I don't think I'm not alarmed, but I don't think we get a you know, a good number.
It A sure the FED has a lot to answer for. Where's this one going?
I have no idea. It does feel politically that he's going to be under a lot of pressure in the coming days weeks, you know, And I do think he probably should have cut rates or be on the pace we should be cutting in July. I think I don't like the jobs data, so I don't agree with all this policy, but I think pushing them out and this pressure markets aren't going to like it. The world's not going to like it. So I don't love that stat What do you.
Think the cost is? What's the price of firing the FED chair? Not saying it will happen, if it happens, What is the cost and is it so high that it prevents it from happening.
You know, unfortunately or not fortunately. I don't think it's going to be that high. Front end yields probably go down, right because whoever's going to come and is probably going to implement cutting. You see yields go higher maybe at the back end, but how much can you choose tens go out. So I think it's actually going to be a muted reaction. I think there's a lot of fear that we're going to blow up the treasury market. I just don't think that happens right away.
And part of the reason.
Why is because people say there's a whole committee full of FED members that all have a vote, and yet Kevin Walsh, who previously was on the FED Board of Governors, came out and said, we need regime change, we need an overhaul, and started talking about the strategic shift that he would like to see at the Federal Reserve.
How realistic, how feasible is that?
You know, I've often wondered for the last decade why we don't have more behavioral economists on the FED. Right, we have the traditional macroeconomists, and yet when you look at the Nobel Prizes, you know, they're going out to the behavioral So I think we shake up in kind of some different thinking wouldn't be a bad idea. Again, I'm not sure that it should be done in this kind of, you know, very quick and rough way, but I think there are things how do we think about
the world, how do people respond? I think a lot of traditional macroeconomics has failed us, and we've kind of missed the GFC, we miss European debt crisis. So bringing some new types of thinking might not be a bad idea.
There are two things that you're sort of alluding to here, and one is the fundamental economic justification for both the rate cut, andy rethink of some of the economic modeling on the FED. The other is the political job boning that leaves people concerned about a Turkey situation, air dou On like pressure, talking about what happened with Arthur Burns that led to the highest pace of inflation that we've
seen in modern history in the United States. So how do you distinguish between the two, And does this kind of pressure make it less likely that they can cut in a way that might be appropriate.
So I would have said before this weekend I felt they would be pressured not to cut because they didn't want to be bowing to this. But it does seem like this is a whole new line of attack. They're kind of going down different avenues to get that sort of change, and if that happens, then I think we do get cuts very quickly, because whoever comes in, we'll try and say, well, this has to be our mandate.
It's probably the most confusing I've ever had because we've never i think, had to figure out the political ramifications of the FED in such a way.
Kevin Hassett was asked about this over the weekend. He says, they're being looked into whether or not if there's cause, he could be fired, but this would be about issues regarding renovations at the FED. Does it matter to the markets what the potential issue is that they think they have a legal standing to fire the FED share?
I think it does make a difference. And I do think one thing. Powell was very successful independently before he joining the FED, so I think he probably has a lot more stomach to fight this than someone who didn't have, you know, his own personal wealth isn't coming into this job very strong. I think he is very committed to what he's doing, So you know, I find you will not go down easily.
If he's not going to go down easily, then do you think he sticks around to finish out his governorship to twenty twenty eight?
I think that's such a long way away in this environment right now. It's like we have trouble living week to week.
Right But he won't tell Trump administration officials, he won't tell reporters. He's repeatedly asked about this and doesn't give an answer.
I think there's no reason for him to give an answer. Why I make it easy on anyone. It says kind of a little bit of leverage. Maybe it is what makes him happy when he's fighting with this. So I feel it's all a bit of a side show to what we should be looking at, and that's not good.
The price of this now, you said it wouldn't be that high, Joe Somervellos said, it's thirty to forty basis points and a fixed thing comes sell off in the following twenty four hours for the FX market, it could mean a three to four percent move in the trade weighted dollar at least support up the experience in Turkey. If you go back to spring of twenty twenty one when Erdehan fired is then central bank governor. I think the following day we have an eight percent move on
the Turkish LERA. Are you not expecting anything like that in the following twenty four hours?
I think it'll be hard like you want to sell off. I think that I agree on the FX. I think it's going to push people away from the dollar. I think that makes sense to me. But why would Tebow sell off a lot? Right? Clearly you're going to get someone coming in and I think that will anchor the curve a little bit. I think maybe you get this and make.
At the front end. Tell me what happens further along the curve. I'm not interested in the front end. I don't know what happens to tens and thirties.
Maybe it widens a little bit. I don't see a thirty to forty BIB. I would not be surprised to see markets actually remain more calm than all the hype. Unfortunately, I think that gives the whole ammunition. But I think there's just so much more going on than the FED share. Now, if we believe that someone's going to come in and cut one hundred BIPs immediately and get us down to
two percent, that's a different story. But I think if you think someone's going to cut fifty and try and get down one hundred bits by September, do we really sell off that much? Like that's kind of more in the ballpark what I think the FED should be doing anyway. So I'm not going to react that negatively.
I was setting though, a precedent that becomes dangerous for the bond market going forward. And I say this not just from the US perspective, but globally at a time when you see all the long bonds around the world and develop market selling off in the prospect of more end and politicians that don't want to have to raise taxes or cut spending in order to reduce the deficit.
Isn't this a fundamental problem that increasingly politicians will just job own their central banks as opposed to actually taking the pain.
Yeah, And I think it's like a lot of things. We've had executive orders skyrocket over the last twenty years. Everything's kind of being done a little bit backdoor, maybe not quite by the official channels. So I think those are all risks. One thing I keep. You know, we've been arguing to our customers probably for three years now.
You're supposed to be if you're investing in one year end paper heavily, heavily, heavily overweighted towards corporate debt commercial paper because corporations actually have good governance, right, corporations that are there to make sure their bills are paid on time. So I would be overweight. I think you're getting that extra spread, and I think there's going to be more and more conversation about what should one of these top companies trade versus the US dollar, or sorry, versus T bills.
I don't think we're right through. I don't think we're there at this point, but I could see us approaching that right. It's happened in some third world or em countries in the past for a variety of reasons. We're not there, But I think you're getting free spread almost when you look at some of these double A, triple A, even single A companies orrising commercial paper. I would own that all day long instead of tea bills. I think it's less hassle.
Peter, if you don't think there's going to be a massive implication to the market, if they fire fed Chair J. Powell's what's holding them back then from doing it.
I assume there's legalities and how to do it, whether they're allowed to do it, and I'm sure that's being worked on it.
Pete, it's going to say, as always, thanks for dropping by a pity share there of Academy. The former senior White House Trade advisor Kelly and Shaw, writing the President believes he still has a long leash when it comes to tariffs for countries that don't have deals by August first, I do expect tariffs to go up. Kelly and joins us now for more Kelly, and welcome back to the program. I think you told us all to get a beer and take a break last time, and then everyone gets
fired up after the announcements over the weekend. How seriously are you taking some of the threats this past weekend.
Yeah, good morning, And I think I have the same advice today that I had last week, and that this is not for us, This is not for business.
These tactics are really for other governments.
And I think that director has it said it well on Sunday when he said the President was trying to squeeze every last drop out of some of these deals.
So that to me is really what these letters are about.
I'm still relatively optimistic will land somewhere with the European Union. The Mexico letter was a bit of a surprise to me, given that they weren't negotiating one of these full reciprocal deals.
It was really about steel and aluminum.
But that said, we've got two and a half weeks to go and I expect to see a bunch of deals, and for those countries that don't have them, I expect to see those terif.
Rates go up.
When you say you do think this is the President trying to squeeze every lens ounce out of these trade negotiations, say what comes to the European Union?
What is he after?
Well, with the European Union, there are a number of sticking points, and I think everyone's expectation is that if the US and EU were able were going to be in a position to agree, that it would be too
basically a subset of issues, and not every irritant. But I had been hearing some consternation about agriculture in particular, and some frustration on the US side that the EU wasn't willing to cut some of the more sensitive teriff rates, and then a lot of disagreement over those Section two thirty two carve outs and what those might look like on auto steel, pharma, semiconductors.
And then of course, the President has long talked about Europe's treatment of US tech.
Firms and from state aid to the DMA and DSA, and so those are going to continue to be difficult points between the US and the European Union.
The European Union, we have this story, is preparing to step up engagement with other countries, potentially pros the United States with other allies. Do you think that tactic could work with this administration?
I mean, I think it is a unique administration who negotiates in ways that are not typical in terms of diplomatic relations. So why not come to the United States as a block and say here is a potential solution
and a potential way forward. Because is what is clear from Presidents Trump's tactic in terms of taking the sledgehammer to the global trading system and negotiating bilaterally with every government on Earth, is that the current global trading system, the World Trade Organization that is one hundred and sixty.
Six member countries just doesn't work.
And so if there are a subset of countries who want to join together and approach the United States, I think the administration could be open to that.
Kelly, and you said a keyword there, tactic. And this is what the market is viewing all of this as, at least in terms of the muted reaction that we're seeing this morning, a tactic to negotiate a better deal. Is this negotiating with the trade partners or is this negotiating with the market.
I think it's predominantly negotiating with the trading partners.
But I do think that the market is playing a role.
And right now, the fact that the market hasn't reacted as significantly as it did in the aftermath of April second, coupled with low inflation, positive job reports, and overall good economic indicators, I think doesen bolden the president and gives him a longer leash on his tariff strategy.
Now, if the markets were to.
Totally go the other way, I do think that that might have a bit of a mitigating impact on some of these tariffs. But I think the market is reading the situation exactly right, which is the President is sending these letters out the announcing these high tariff rates in the hopes of actually getting deals so that he won't have to impose those tariffs.
So Kelly, And that's where.
I think there is some confusion. What is the tariff strategy? Is it to get deals that are specific and have certain parameters, or is it just to see how far someone can push before you get revenues on the tariff's side and markets don't freak out.
Yeah.
I think it can be a little bit of both.
I mean, certainly the pressing task right now is to create this action forcing event that by August first, these tariff rates will be exceptionally high unless countries are able to get a deal. I think that's really first and foremost on the president's mind. But the second line of messaging that we're hearing is about this revenue and the fact that the tariffs have been good for the US economy, that prices haven't gone up, and we're going to use it to pay for some of.
These tax cuts.
I think that's about softening the message on tariff so that for countries that don't get deals, it's not viewed.
As catastrophic the sky is falling.
That there might be some positive benefit there, But I do think at the end of the day, it would be best case scenario for everyone involved to find some sort of landing zone in terms of these bilateral negotiations with countries and to see a bunch of deals get inked and see those tariff and non tariff barriers come down.
Kelly on I appreciate the update, the catch up. Thank you the former senior White House trying advise that Kelly on Shore that on the leak system. Vito s Perduto of BC Capital Markets saying EMINI activity is delayed, not derailed, writing the backlog of Vemini opportunities continues to build. Itals what happen that're just not happening as quickly as many had expected. Vita, it's going to see it.
Good morning. Thank you for having me.
The difference between those two words delayed and derailed what inspires confidence this is just a delay and not a derailment.
Well, I think the fundamental conditions have continued to be very solid. I think the corporates are sitting flush with cash more so than they have historically. I think for clients, for instance, we're open to lend the clients to support their transactions much like we were earlier in the year. I think people have gotten comfortable with the current environment.
They are operating in an environment of constant uncertainty, and so when you talk about whether it's tariffs or other policy coming out of EC, you have to plan for multiple scenarios. And so what we're finding with our clients is that they're preparing for transactions. There's a fair amount
that they'd like to do. They're continuing their plans. It's just a question of when do you make the decision to do it, and so it's delayed to the right, it's not being taken off the t and so I think there's a fair amount of activity when the window does open.
A lot of people said it was a wait and see economy, and then doutsa airlines happened and Ed Bastion came out and said that things are stable. Businesses have Clarency, they're investing again. Have we broken out of that weight and see economy.
I think some have.
I think we're seeing it certainly. I take a look very closely, for example, at the CEO Confidence Index out of the Conference Board. So the median there is fifty on a scale of zero to one hundred, in terms of the inflection point. In the first quarter, which was taken in February, CEOs were at a sixty, meaning that they were confident in the forward outlook. They felt positive about it. The survey that was taken in mid May dropped to thirty four. It's the biggest quarterly drop that
you've seen. So what's happened between February and May Liberation Day? So that tariff and policy uncertainty, concerns about geopolitical instability, and then also an uncertain regulatory environment in some cases has driven them to not make decisions. And so when they looked at that, a very high number of them felt that we were in a worse position versus six months ago, back in May. But what we are seeing is that, Look, I think you look to Trump one
point zero versus this. It took a full year of the first administration for people to get their arms around what it meant. I think it's happening quicker now, and I think the better companies are prepared and they're going to enact policy.
The pipeline is rich, the pipeline is there. Look, I think one reason why a lot of people are looking at this is because we are going to get the earnings from JP Morgan and City tomorrow and Wells Fargo and then from Morgan Stanley and Goldbin Sachs on Wednesday. And people are wondering how much of a boom this is going to be to them, considering that heading into this year it was supposed to be the year of M and A didn't happen. How much has that been derailed?
Well, I think you're seeing if you look at M and A volumes this year announced volumes, it's actually up versus last year, but a lot of those transactions in the first quarter were things that were already on.
The books about to happen.
And so you have USM and announced volumes are up sixteen percent this year. Globally it's up twenty six percent. But it's really larger deals billion dollar plus are driving that, and the smaller deals sub a billion are actually slightly down in value. So what's happened is a lot of it's just been, like we talked about, pushed to the right. People should not be surprised by this, Like I said just now, this is what happened back in twenty seventeen
during the first administration. But what we are seeing is that where we sit today versus the beginning of the year, is that there has been a tightening of the bid ask spread. I think parties that are prepared and feel confident are out there doing transactions. I think sellers that need capital and need to For instance, if you're a private equity firm and you need to return capital to
your LPs, you're looking at various alternatives. It might not be a traditional sale, but maybe you look at a continuation vehicle, maybe you're looking at some structured equity.
Maybe you're looking at a.
Minority sale or taking a loan on your net asset value, and you're finding ways to return capital because that's the lifeblood of what they need to do.
I wonder how much the scenario for how people are financing these purchases has changed with yields where they are. Have you seen people less willing or companies not people, companies less willing to incur debt to make those purchases and want you at all stock or crash or whatever just lucas of the fees.
I think if you go back two years ago, a year ago, certainly I think people had not accepted this new level yet. I think they've accepted it now, so they understand rates higher for longer. I think if you
look at where where the calls are. For instance, our rate desk just pushed out their call last week that instead of a first cut happening in September, it's now going to be December, just because it's too short of a window to August first or the September meeting to really see any the statistics that will allow the FED to cut. And so as a result, I think companies are saying, I'm going to be in this environment longer. I need to make the right decisions for my business.
It's too soon to just focus on twenty six and beyond. But I think a lot of folks are looking at they're more longer term plans, and as a result, you're seeing them make decisions that are strategic. I always like to say good strategic transactions will happen and we can find a way to support them and finance them. And we're seeing that with our best clients.
But what's the risks in delaying.
The risk in delaying is that someone else takes advantage and you're sitting on the sideline and left behind. And so we're seeing a lot of activity in some sectors where folks are feeling that. For example, if you look at the technology sector, I think folks are trying to build their pipelines from an AI perspective, and they're looking and saying, I need to be in here quickly.
I can't wait to develop this on my own.
I'm going to acquire it. If you think about some other sectors like industrials, they're looking to diversify their supply chains and think about making sure they've got ample supply and various geographies and so that they're teriff resistant, and they know they have to operate in this environment. We know it's going to not necessarily be what's out there in terms of a headline today, but we don't know what that's going to be, and I think they're planning for various scenarios.
It just finally they support up the price of money to right. Cuts make a difference, so they move the dial.
I think, as I started before, I said, we're looking for a signal for the for sort of people to make decisions. I think certainly rate cuts would be a good signal to the market and to buyers and sellers that this is an environment where we're ready to transact and there's a level of confidence there. M and A is about aligning many different factors, and so you need your management teams, you need your boards, you need them
all to have confidence in the forward outlook. If they feel that the Fed's giving a strong signal like that, I think that's a positive. But at the same time, I think the better companies are prepared to act in this environment. And so again I jokingly say, we always have a pretty full pipeline.
It's pretty full right now.
But again i'd love to see a lot of that transition to announce transactions.
You're certainly not alone. It's going to see you, sir. Thanks for dropping by, Thank you for having me. Vita Spaduta. There of abc DA of rough capital rights in this given the FEDS wait and see approach, prospective CPI readings may take on greater importance for risk assets in the months ahead. Mike joins us now for more, Mike, welcome to the program, sir, what are you expected tomorrow morning?
Thank you for having me back on SO consensus is expecting a three tenths rise, both headlined in Core. So I don't really think that is going to change the mood on the FED. It's a very divided committee, as you guys just discussing. I'm not super worried about a big inflation spike here, and the reason I say that is bond market inflation expectations are very low and steady. Some of the higher frequency data actually looks pretty good. There's a gauge called trueflation, which is based on eighty
million prices in blockchain technology, super high frequency. So we have year over year readings extending into almost mid July here one point seven percent. So I don't think we need to worry about a repeat of that three year inflation overshoot, which was really an aggregate demand monetary policy story. The tariffs could definitely create some inflationary headwinds, but I think they are temporary in the FED probably is best to just look through them.
If that's the case, Mike, do you see this as a time for the FED to be cutting especially if this CPI print that we get tomorrow shows that ongoing disinflation at least not an inflationary trend.
Yeah, I think so. I think they're getting much closer to that point, probably September. That's what markets are priced for FED funds futures are priced for just under one hundred basis points of rate cuts over the next year. That sounds like a lot, but it's really not over
a twelve month period. If the economy is softening a bit at the margin, and I think, you know, some of the data suggests that's the case, not falling off a cliff, for sure, but we are seeing a little bit of softness at the margin with the most recent job numbers. And also it looks like GDP underlying growth.
Real final sales to the private sector probably ran around one percent or so in Q two, So that's, you know, that's much that's much softer than what we've seen over the course of the last you know, two plus years. So I don't think it's inappropriate for the FED to be starting to consider lowering policy rates here. But I will say this, the hectoring from the White House is
wholly on helpful. I mean, even if the administration were to convince Paul to step away from the FED and you know, this stuff about the construction project is just a fig leaf. It's pretty obviously obvious what's going on here. It's completely out of line in my view. But even if you were able to convince Paul to step down and someone else takes over. It's a committee, they operate by consensus, so it's really very unlikely to dramatically change the rate path in any event.
So it's just like Michael, because this is actually one key question that the market has right that the people are questioning whether the market is pricing in some sort of firing of fed Shair J. Powell and wouldn't have that big of a reaction at all. Peter Shecheer was saying, no, that it is a committee and that people would look
through that. How much does it complicate a message that actually would go the president's way if you've followed the economic data at least in your opinion, how much does it complicate that kind of messaging from a that wants to appear independent.
That's a great point.
I think, if anything, this hectoring in the political pressure probably makes it more difficult for the committee to move forward with rate cuts, and because they don't want to be viewed as, you know, a bending to political pressure. So I think, if anything, these kinds of shenanigans are likely a backfire and it sets a terrible precedent going forward. I mean, you know, the FED should be an independent institution.
We can look back at what happened with President Nixon when he pressured FED Chair Burns to inappropriately run easy monetary policy, setting off a decade of inflation which eventually culminated in double digit interest rates. We saw a situation in Turkey where President Erdawan tampered with the central bank, wanted low rates, easy money policy, a currency collapse and hyperinflation followed. So let's get back to basics. If you want low mark at interest rates, what do you need?
You need price stability, and I think the FED is well on their way to achieving that in terms of on target inflation. And you need budget integrity, and the FED has nothing to do with that in the administration, and my judgment and Congress are certainly not on that path with the so called big beautiful Bill that was miles and miles away from an optimal outcome.
Jonathan's been talking about this Deutsche Bank note about the risks of if Powell was to be ousted are underpriced. What kind of market reaction could we see if we've come to that point.
Well, it's very uncertain. I think it's just a matter of setting a very bad precedent of political tampering or the attempt to tamper with an independent federal reserve. And you really look back at history and policized central banks don't achieve optimal outcomes. They might do something that helps the sitting administration in the short run. In the long term price is paid by the public in terms of higher inflation and lower real income. So it's really not
the path you want to be going down. Very hard to say in terms of the very short term. I mean, what happens even if were to step down, I don't think it really changes things dramatically in terms of you know where the FED is headed here, given that it's a committee, and you know, the administration is not going to be able to completely politicize the majority on the committee anytime soon. That said, it's really a move in the wrong direction. It's totally inappropriate, and they should just.
Stop it, just a bit of bow on it, given all the risks we've talked about. Why are market based inflation and expectations so well anchored?
Well, I think they're well anchored because the FED has achieved quite a bit of credibility here, right. I mean, they obviously had a big goof in twenty one twenty two where we had inflation shoot up to forty year highs. But you know, they ended up correcting that with five hundred and fifty basis points of rate hikes and we're somehow able to achieve a soft landing avoid a recession.
And now inflation has come down to much lower levels historically, So the bond market is giving the Fed the benefit of the doubt. The institution has really regained and re anchored its credibility, and that's another reason not to tamper with the Federal Reserve in a political way, because if that credibility is lost, it could be very difficult to reachieve. They certainly got very fortunate with this episode a few
years ago. You know why keep playing Russian roulette with credibility doesn't make any sense whatsoever.
Mikeel, appreciate your time. It's been too long. Let's do it against so micro daanave of rough capital. This is the Bloomberg Seventants podcast, bringing you the best in markets, economics, angiopolitics. You can watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple Spotify or anywhere else you listen, and as always on the bloom Blog, Terminal and the Bloomberg Business
Out Mm hmm