00:00Well not in the U.S. at least. I think in the coming months we might start to see more
00:06of an
00:07impact in terms of inflation and growth. But what we're seeing in the U.S. at least is a very
00:12resilient labor market for a start. As we've just heard, we've just been talking about the AI
00:16investment. That's really boosting GDP growth in the U.S. So we're not seeing a pullback there.
00:24If we look across other countries, it's a bit more diverse. And part of it is the cost of living
00:31crisis and how that is impacting consumer spending in other countries, such as Japan.
00:37There's a bit of a pullback in terms of sentiment. If we look at the U.K. as well,
00:43the growth outlook has been a bit luckluster. So not in the U.S., but in other countries.
00:48Sri writes these brilliant notes, Paul. Hike expected June 11th, ECB. BOJ, next move,
00:5725B hike. She doesn't mince words. No, she doesn't. So how about our Fed next week there, Sri? I mean,
01:04the data just doesn't, I guess if anything, it just says, sit on your hands here.
01:10Yes. I think, as we've just heard, obviously, it's Kevin Walsh's first meeting as chair of the FOMC.
01:17And he has been speaking in a very dovish tone in some of his recent speeches. But the data, again,
01:25there's nothing there that would suggest a move in either direction at this point.
01:31So really, it's a case of watching how the inflation outlook evolves. And that's really
01:38underpinned by the evolution of the conflict and when the Strait of Hormuz really reopens.
01:44So a lot really hinges on that. So for the now, we actually have the Fed on hold for a
01:49meaningful
01:49period of time. But once we start to see inflation picking up more meaningfully here, not just in
01:55terms of energy prices, but in terms of the spillovers into other areas of inflation, then I
02:02think we could start to see some hikes from the Fed if this conflict continues into the next few
02:11months, actually. So it really does depend. But for now, we're quite confident that they will be on
02:17hold in the next meeting. Sri, talk to us about the impact of the war in the UK and Europe
02:23as it
02:23relates to energy. Here in the US, you know, we're, quote unquote, energy independent. We are
02:28a net exporter, all that kind of stuff. How about for our friends in Europe and the UK?
02:35Yes, there's a little bit more of a sensitivity there in terms of, as you say, the imported energy
02:43impact. I think recent data, if we take the UK, for example, there are some technical distortions
02:48there. So it's very hard to read into some of the moves that we saw in the April reading. So
02:56I think
02:56there it's really a case, again, of the longer this continues, the more vulnerability there is in
03:05terms of the energy impact. We can think about, as I already pointed out in the note, that we are
03:13expecting a hike from the ECB tomorrow. I think in terms of central banks, it's really quite
03:18divergent with a hike from Bank of Japan and ECB, fairly confident there. But the Bank of
03:25England and Fed really on hold for now. I think the ECB is closer to neutral. So they have a
03:31little
03:31more room to manoeuvre in terms of hiking sooner.
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