Fed, Powell And US discussed on Biz 1190 Overnight
Conclusion, we wouldn't hesitate to to make a change if we came to team in the view that that that balance sheet normalization plan or any other aspect of normalization was part of the problem. We wouldn't hesitate to make a change. Southern kitchen is the managing director and head of strategy at GMAC joins us now from our European headquarters in London Simon well done getting up so early at home in London, and what's more important t the data. I e the wages and the jobs or the Powell rhetoric. I think it has to be the data. I think you know, you're saying perhaps a typical January surge in markets in response to Powell's comments use. I saw a big shift after his comments in November. When he said he was close to neutral, and it's remarkable the change in market expectations for the rate outlook for the fed for this year. But I think it's going to be very hard for the fed to to pose this rate cycle when you've got such strong jobs data. I know that the market has been volatile in the last month or so you obviously had the apple profit warning last week and not that speaks to the rebalancing and the Chinese economy. I think kits one to oppose in the fed tightening cycle, but when you have this sort of wage growth, when you have this sort of jobs growth, I think it's going to be very hard for the fed to say look. We've we've done enough at the end of the day. The fed does I think want to create some room to be out to cut rates once the economy does begin to slow, but right now things are very robust. I think we would still that the fed is gonna be raising rates at least for the first half of this year. That makes it difficult for markets outside the US to perform well until we see a sign that the fed is is gonna pause. Well, as you say, maybe the market is under prize. Well, it is under pricing the fad in terms of the market says no rate hikes and Ray cuts into twenty twenty. I want to get a sense of your recession at FDU hammer is I'll put this into the lobby. This is jobs are plentiful versus hard defined index. And it just shows you Tinley optimistic the man and woman in the street are about finding jobs. This is the American consumers the best labor market since two thousand and one. What do you make of all this talk a by recession risk in the in the close of two thousand nineteen early twenty twenty. I think it's something we should think about right now, you've got this turmoil with the government shutdown the US it'll be interesting to see how that affects.