00:00Torsten Slock of Apollo making the case for a rebound in the economy, writing Liberation Day was almost eight months ago.
00:05Fiscal and monetary policy are easy and easy financial conditions point to a re-acceleration.
00:11Torsten joins us now for more.
00:13Torsten, welcome back, sir.
00:14Are you expecting to see some of that in the September jobs data or is that too early?
00:20That is too early because the risk, of course, is that in October we had the government shutdown.
00:24And, of course, the chance is that there might be some weaker data for the month of potentially November also once we do get that.
00:32But I do expect that once we look into next year, we have still relatively easy financial conditions with, of course, the stock market.
00:39It's been some wobbles more recently, but still very supportive.
00:41IG spreads, high yield spreads, loan spreads, very supportive.
00:44You also at the same time have that you have tailwinds because Liberation Day is now eight months ago.
00:49And finally, we also have general tailwinds because we are going into an election year.
00:53And, therefore, if we do get the $2,000 stimulus checks that you just talked about, that will certainly also be helpful.
00:59So, in total, I do think that the market is too negative on the economic outlook and the risks are actually rising that we may have some re-acceleration once we get into 2026.
01:08Torsten, is that re-acceleration that comes with jobs growth or not?
01:12I do think that it will come with job growth.
01:15It is actually very impressive when we think about it that over the last eight months, think about what we've been through, the shocks that the U.S. economy has been facing.
01:22Not only when it comes to, of course, trade war, also the shocks coming from immigration.
01:27And as you just mentioned, Jonathan, the non-farm payroll equilibrium is now down at 50,000.
01:32According to the Dallas Fed, it's as low as 30,000.
01:34So, therefore, the bar has been lowered.
01:36And, therefore, I do think that if we get numbers that are in that range, then we should look at that and say this is exactly where we should be.
01:43So, in that sense, I do think that the economy has been remarkably resilient for the last eight months.
01:48And I do think that as the trade war gets more and more behind us, I do think that a lot of the fog will be lifting.
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