00:00Well, Matt Maley is the Chief Market Strategist at Miller Tabak.
00:03Always a pleasure having you on Global Business Europe.
00:05Look, this is all happening at a bit of a moment,
00:08an intense political and legal standoff taking place.
00:11Someone's going to have to back down soon, aren't they?
00:15Well, I would think so, Juliette.
00:17I mean, the one thing, of course, is that what's going to happen with Senator Tillis
00:22and if he's actually going to actually let the vote go through.
00:25And so there's a real possibility that Jerome Powell will remain as the Fed chair
00:32past the end of his term because he would still be a member of the Fed.
00:37And that could have all sorts of implications.
00:39But, yeah, I do think something's going to have to give at some point soon.
00:42I would tend to think that the people on the Republican side will come together
00:48and he will get nominated or officially appointed before too long.
00:54But, again, it may not be until, it may be later rather than sooner.
00:58So what's your take?
00:59Is this becoming as much of a test of the Fed's independence as it is of Kevin Walsh himself?
01:07I think it's more, it has to do with the Fed's independence.
01:10You know, the ties that he has with Wall Street, you know, certainly Jerome Powell had those in the past.
01:16He worked for a hedge fund, for that matter.
01:18And he does have a decent amount of wealth, maybe not as much as Walsh.
01:24But I do think the independence thing is very, very important to everybody.
01:28And it's going to be important, I think, for Walsh to show that independence if and when he becomes the
01:34chair.
01:35And the only thing I would add is that if you look at history, in reality, as much as the
01:40White House can put pressure on things,
01:42the Fed usually follows what's going on in the bond market more than anything else.
01:47And so I think the markets are going to depend on a lot more than a lot of people realize.
01:52Matt, with inflation still above target, I mean, is the bigger risk now confusion over the direction that the Fed's
02:01going in
02:02rather than the numbers and the data itself?
02:05Well, of course, that is very tough.
02:08But the problem is, of course, what's going to happen with the war and the Strait of Hormuz?
02:13I mean, we can talk about ceasefire or not.
02:16But if we haven't, if the ceasefire gets extended, but the Strait of Hormuz remains closed,
02:20it's not just crude oil, it's fertilizer and petrochemicals and other issues.
02:25That's going to raise the bar for when it comes to inflation and actually raise concerns about stagflation.
02:31So, yes, it's definitely something that could create some problems for a stock market
02:35that's kind of pricing imperfection right now.
02:38Matt Maley at Millet Tabac.
02:39Thank you very much.
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