00:00What's your take on oil right now? If you look at the markets and actually inflation expectations,
00:04what are they most worried about? I think that it's a combination of the fact that you have
00:09some pressures coming from the spending, particularly in the U.S., AI and all that,
00:14and this solid growth. The fact that you never really had a bond rally when oil prices dropped,
00:22partly because of the supply of fixed income, also from the private sector, but also from
00:27the public sector. And also inflation expectations not collapsing either. And now on top of that,
00:34you have oil prices going back higher, which tells you that the dip that we saw in global
00:38inflation prints may be a little bit too technical, a little bit too temporary, which puts central
00:44banks in a difficult spot because it's not just about the delta. It's also about the question
00:48that central banks are asking us now. Do we have rates at the right level for the current inflation
00:54activity? And you think we do? I mean, in the U.S., they're not in a bad spot.
00:59Yes and no. If you think that hyperscalers are going to be spending trillions for the next few
01:05years, that puts you in an output gap that is wider than what you thought last year. Last year,
01:10we were expecting about 300 billion of CapEx. Now we're expecting trillions, and that number
01:14keeps going up and over time. So you need to have some accounting for that.
01:19And obviously, if you have oil prices, A, high, but also volatile as well, because it's also possible
01:26that this situation in the Middle East is a stop-start situation that affects the volatility
01:32of inflation expectations. And that could last for quarters, if not years to come.
01:36And given the starting point of inflation never really reached the target in the U.S.,
01:40they might have to reconsider. So what do you see as the next move from the Fed?
01:45I think that the risks are for a hike. And I think that obviously our call as a bank is
01:52flat
01:53for now, but we're acknowledging the risks for a hike. Now the problem is that if they hike,
01:57they're unlikely to go once. It wouldn't make sense as a calibration. You're not saying you're
02:04wrong for 25 bips. So if they do move in that direction, the market is not going to price one
02:10hike.
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