00:00Look, there is no surprise that the Fed stayed on hold, but I think it is interesting that we had,
00:03you know, again, three dissenters against the easing bias. I mean, the Steve Marantz view is
00:08not really a surprise. So, yeah, no, I think this is obviously the data that's come out of the U
00:13.S.
00:13lately in terms of activity data, we have to admit, has been fairly resilient. So it's not a huge
00:18surprise. But again, the fact that you did have a shift of three dissenters, you know, two joining
00:23the third, I think does at the margin move on the hawkish side. So obviously we've seen
00:27short end yields in the U.S. backup. Do we see a pickup in inflation in the next few months?
00:32I think certainly the risks are there. I mean, you have this kind of the difference between the Fed
00:36and other global central banks is you have a dual mandate. So at the moment, obviously,
00:40we still have continued pressure because, as you can see, all prices continue to surge.
00:44The Strait of Hormuz is still still closed. So there's obviously pressure and core. I think
00:48there's been a disconnect between core PCE, which has been a lot higher, more elevated than core CPI.
00:54So again, to the extent that what is the Fed's preferred metric? Now, some of that may be
00:58because the weighting of these electronic kind of goods component is much higher weight in the core
01:02PCE, which is shifting higher. And as you know, this AI cycle and the shortage of some of the
01:07electronic goods continue to drive prices higher. So again, that's kind of on the one side, keeping
01:11a hawkish bias. But on the other hand, I mean, you know, again, as also what Powell had said,
01:16I mean, there is still some sign that, you know, they say policy is maybe mildly restrictive.
01:20We are expecting that, especially over the course of the summer, with seasonality helping at the
01:26margin, we will see kind of a gradual loosening of the labor market. So that's why, I mean,
01:31Citi as a house view, we have still maintained our view of an easing bias. But obviously,
01:36the longer this crisis drags on in Iran and the resilience of global financial conditions,
01:41obviously, those risks are there.
01:45Joanna, Avril in Singapore here. With Powell's last stand, so to speak, it was notable his tenure
01:53and the way he was able to build consensus. What are you expecting from the next Fed chair? And how
02:00difficult is this going to be? Because we've essentially seen from this meeting, that the
02:05center of the committee seems to be moving towards neutral. What is this going to mean for all the
02:10ensuing meetings for the rest of the year? Look, I think, you know, again, we cannot presuppose that,
02:16you know, Kevin Warsh necessarily will be pushing for cuts. I mean, again, a lot of this really depends
02:22on extraordinary developments that are happening. But I think people are wondering to what extent that
02:27if you do have people moving to neutral, and if if Kevin Warsh is biased more to ease, will we
02:32have
02:32intensifying tension? But like I said, a lot of that really has to do with the data. I actually think
02:36the fact that we've got the DOJ investigation being dropped, you know, I think, you know,
02:41Kevin Warsh, I think still is a good candidate that will continue to reinstate central bank
02:47independence. So by and large, you know, of course, there'll be some dissent depending on the data.
02:52But again, I do think eventually, you know, Kevin Warsh will pursue what is right in terms of
02:57inflation credibility and the mandate of the Federal Reserve.
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