00:00Do we have a little more clarity today than we did let's say Thursday or even Friday. Perhaps a little
00:05bit more clarity. You
00:07know I think people are probably waiting to see the text of the agreement to really understand what's going on.
00:13What I've
00:14noticed looking at the bond market is the reaction yield yields are lower today probably less so than I would
00:22have expected
00:22given the move in oil. I think some of that has to do with the other event risks that are
00:27coming up this week particularly
00:29the Fed. So if you were just to look at the level of oil and try to map what the
00:3510 year yield should be based on
00:37the relationship since the start of the war the 10 year yield should probably be closer to 420 430 than
00:43440. But as we
00:46know since the war a lot of things have happened. We've had better labor market data. We've had the hotter
00:54CPI as a
00:55result of higher energy prices. And as a result you've had higher real yields. And you know there is still
01:02an
01:02event risk to get through here which is I think why you know the rally in 10 year across the
01:08Treasury curve
01:08today is maybe a little bit more muted than what you would have expected given that we have reached this
01:14deal.
01:14Well that said we also got inflation data last week that might have cheered investors just a little bit. It
01:19could have been
01:20hotter right. We didn't see that much of a pass through from oil gains for example or the war if
01:25you like. Does that take the
01:26pressure off Kevin Warsh or is he still looking at potentially wanting to convince people that a hike is necessary
01:32at some point.
01:34So I think that this meeting has really come together for him. Our expectation is that he's going to be
01:41able to
01:42keep the committee fairly in line. In fact for the first time in a while we may have no dissenters
01:48because I think
01:49the committee has already really coalesced around a consensus which is the Fed needs to stay on hold and we
01:56need to
01:56remove the easing bias within the statement. If they do those two things I think really most of the FOMC
02:03right now is on the same page.
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