00:00It was certainly the longest month ever. I feel like it was like a thousand days long and it
00:06feels like it's potentially going to stretch into the into February as you say with the with the
00:10shutdown. Hopefully it's not going to last but you know it's like deja vu all over again with
00:14when you know when I saw the headlines yesterday that the jobs report is going to be postponed
00:20and the jolts data this morning is going to be postponed again. So here we go again. Again hopefully
00:26it won't last very long. Jennifer what are you looking for here in terms of this U.S. economy
00:32here? By most measures still in pretty solid shape here. What are the mileposts you're going to be
00:39looking for over the next several months? It's going to be all back down to jobs. You know we've
00:44actually been upgrading our growth forecast for the U.S. roughly about two and a half percent on
00:49average over over the last couple years 2025 and 2026. And again this is just due to more overall
00:55resilience. And of course all the pausing and all of the deals that have been secured at least
01:01that will keep inflation at a more manageable level. That has certainly helped. But it's going
01:05to continue to roll into what happens with job demand, labor supply as well. I don't know if you
01:12had a chance to read all the responses that were given from the ISM survey yesterday but it was a
01:19pretty depressing read. I was like oh my gosh everyone was worrying about tariffs still, trade and
01:24uncertainty. That was like the overriding theme of all the responses.
01:28This is what I want to bring up today and I'm first time I'm doing it with Jennifer Lee
01:32because we've been all equities here at the Tire. I'm sorry Jennifer but the tariffs thing to me now is
01:38underplayed. It may not be as dominant as it was Paul what 10 months ago, eight months ago,
01:44but there's still a tariff reality in our analysis. Isn't there Jennifer?
01:51There is. So I think, so quite frankly I'm a bit more comfortable now than I was say on April 2nd of
01:562025. Just given that the actual tariffs that we have seen put in place are actually a lot lower than
02:02they were when they were first threatened. However, as you say, this has not gone away. It's nothing
02:08has been signed completely yet and even when they are, you know, when there are memorandums of
02:13understanding there is a threat that things can change very quickly. And we saw that happening
02:18in mid-January with the threat of a 10 to 25 percent tariff on those eight European countries.
02:25That got pulled off but then now of course with Canada, the USMCA deals, we're gonna have to see
02:30how that pans out. And all this impacts obviously a lot of companies in the US, a lot of the states
02:36because Mexico and Canada are still the US's largest trading partners.
02:41Jennifer, what's your sense of this Federal Reserve here? The Fed held steady in January.
02:48Since then we've got a new Fed chairman appointed or, you know, nominated by President Trump here.
02:54So a lot of moving parts at the Fed. How are you kind of factoring that into your calculus?
03:00So I'll be very honest when I'm saying this. I really did not know what to think
03:04when Kevin Worsh was nominated. I mean, at least we know it was one of the Kevins. So that was one of
03:09that was the thing that we know for sure. But, you know, I thought it was interesting how the market
03:13sort of conceived, sort of perceived him as being the least dovish out of all the nominees. And I was
03:18thinking, you know, yes, he wants to, or at least in the past he said he wants to reduce the balance
03:23sheet from the bloated levels. And that was one of the reasons why he quit his role in the Fed
03:28way back in the day because the balance sheet of all the QE-ing. At the same time, you have to imagine
03:34that if he is the least dovish out of all of them, there's no way he would have been able to secure
03:39the support and the full support and full backing of President Trump. So we'll have to see how this
03:43goes. Whether or not he can pull it off, by the way, reducing the balance sheet at the same time
03:48as at the same time he wants to lower rates at the short end. Whether or not he can achieve that,
03:54that remains to be seen. And by the way, we still have to wait for him to go through his testimony
03:58and his confirmation with the Senate Baking Committee, because we know that a couple of
04:02key players are unwilling to even entertain this idea until all the legalities surrounding the Fed's
04:08renovation costs have been put to bed.
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