00:00We've had the shock. Do you place more emphasis on the potential hit to growth
00:03or the potential fuel for inflation?
00:08You know, it's really hard to say, but I have to be honest with you. I agreed with,
00:12largely agreed with Steve Mirren. I mean, I think you do have to look through it,
00:17but the market reaction around the inflation potential is really notable. I mean, it's been
00:24all front end moving higher over the past couple of weeks. And I think that is really the story.
00:30In my mind, I think the markets are maybe focusing a little too much on the inflation.
00:37But at the end of the day, it's an open question and we just don't know.
00:42The governor maybe has the luxury of saying you can look through this. Can you imagine if the
00:46chairman came out and said what Governor Mirren said and said, we need four rate cuts this year
00:51and you can look through the inflation shock. What do you think would happen to inflation
00:55expectations?
00:57Well, exactly right, Johnson. They would just kind of move really quite high. You know,
01:05he did say he moved from six to four. So maybe there is some rationality there. But the, you know,
01:10the interesting aspect is the reaction function. And so there's a lot of focus on inflation, which is
01:15rightful, of course. But the growth side, you know, some dealers have moved their
01:21recession's odds higher, which makes sense in a vacuum. But, you know, this is an administration
01:27that will, I think, really aggressively respond, right? So you'll see additional stimulus. You'll
01:33see kind of this reflexive action out of the administration to do anything that they can to
01:39kind of boost growth heading into the midterms. And I think that's an important point that is lost.
01:46So, Greg, that begs the question, should I be selling bonds or buying bonds based on what you
01:50just said? Because the growth shock's one thing. The prospect of them trying to support growth is
01:55quite another. Do you bet on the outcome that they'll be successful and sell fixed income?
02:01Yeah, I think it's pretty attractive in here, all else equal. You know, front ends, I think,
02:07have moved too much. So I do see some value in the front end. But I just look at, you
02:12know,
02:12the 10-year yield at, you know, 437. And that is a pretty attractive level here. So, you know,
02:19I see value in the global bond market. You saw what happened in the gilt market, very violent moves
02:26higher. You know, that seems attractive to me. So, you know, there's a lack of clarity, of course. But,
02:33you know, you look at these yield levels, and it seems pretty attractive to invest in the bond market.
02:39Okay.
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