00:00 Speaker A
Since you bring up the Fed, I want to talk to you about the probability of a rate cut. Right now we’re looking at about a 55% probability of a rate cut on May 7th. That’s obviously been coming down. Is that the bond market and investors indicating to us that the Fed cannot control what’s happening in this market, that even if they did cut, it’s not going to matter, it’s not going to put the tariff genie back in the bottle?
00:39 Speaker B
I think that’s a great point. I, you know, the the Fed is in is in more reactionary mode rather than proactionary mode. In the past, when we have sort of a a a shock to the system, you know, the Fed usually is in a place to be able to to just simply try and reflate the economy in the hopes of offsetting, you know, whatever shock has kind of hit the economy. This is very different. The federal government, you know, is changing the the tax the the the tariff policy as it relates to trade. And so that the Federal Reserve is not really in a position to sort of simply push back against that. So the the Fed’s job is is really to sort of keep a an orderly financial market and then respond to the economic consequences that result from different policy changes. And and we don’t know exactly how this will filter through the economy. And and Fed chairman Powell mentioned that the end of last week, the probability of recession has gone up, and the possibility of inflation has gone up, but it hasn’t happened yet. So they’re in reaction mode. They they’re not in proactive mode. And I think that’s a very um important distinction in in in prior um, you know, sort of shocks when when we see major dramatic spikes in volatility.