00:00Bob Michael of J.P. Morgan Asset Management writing, the market is starting to unwind the tail risk associated with
00:06the global economy that would have to live with oil above $100 for a protracted period.
00:11Bob joins us now in our New York studios, which is a wonderful thing. Bob, great to see you.
00:15Happy to be here.
00:16Do you think that it's appropriate to remove some of the wagers on oil being below $100 a barrel for
00:23a protracted period of time?
00:25Well, that's a complicated question. I think the best answer is we can live with oil $100 a barrel for
00:33a while.
00:34I think what the administration has done a good job of doing to us over the last year plus is
00:41to train us.
00:42And we look for signs of when is the rhetoric at a high, but they're starting to look for an
00:49exit.
00:50And we're starting to see that now. And I think that's why the markets are so optimistic.
00:55If we go back to tariffs, if we think about Greenland, if we think about Venezuela, at some point the
01:02rhetoric is very high, but the administration finds an off-ramp and exits.
01:07And I challenge you to tell me that all three of those things have been buttoned up.
01:11They're all still going on in the background. And it feels like we're on the same kind of off-ramp
01:16here. That's pretty good for the markets.
01:19So yesterday we saw people have faith in the idea that the escalation in rhetoric at least had peaked.
01:24And we at least are coming to that off-ramp. It's almost exactly following the time frame of Liberation Day
01:29last year.
01:30I'm just wondering whether you think it's viable in an ongoing fashion, even during some of the question marks around
01:38how durable the ceasefire really is.
01:40So we do, because there's been significant repricing across markets, especially in the bond market.
01:47Investors are caught a little bit offside for an actual off-ramp.
01:52I don't know that you need a ceasefire for the entire two-week period.
01:57You probably need one for the back half of the next 48 hours, enough time for everyone to meet in
02:04Islamabad and to iron out details of what an off-ramp could look like.
02:10And then I think over the next month, we're going to see this in the distant rearview mirror, even if
02:16oil stays at $100 a barrel,
02:18because it's going to take time to get the fiscal oil to where it's needed.
02:23We're going to see this in the distant rearview mirror.
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