00:00 Speaker A
You saw Jamie Diamond on Fox business today. He’s asked about that, he says US recession, he says a likely outcome. Likely outcome, he says, which obviously made a lot of headlines. Do you agree with Sir Jamie? Is it, is it a likely outcome?
00:16 Jose
I think right now we’re on a coin flip, 50%. Let me tell you why. January and February, the spending numbers were terrible. We, that’s our economic engine is consumption. In uh, in January, the PCE, real, real PCE expenditures were, went down to a 47 month low. Retail sales in February, January also very weak. So, pretty much two out of three months in the first quarter have already been terrible. You only have March. If the shoppers didn’t come out heavy last month, then first quarter GDP is likely to be negative. Our prediction market interactive brokers also reflect that possibility. Now, is the consumer going to recover strongly in April, in the second quarter and it’s just going to be a one quarter one off or is the consumer under some real meaningful stress? Of course, if we start to get some labor market deterioration into the middle of the year, then you know, we will probably have a recession. I’m expecting it to be shallow in the beginning.
02:02 Speaker A
You wouldn’t expect it to be deep and prolonged?
02:05 Jose
No, no, because right now all we’re focused on when the Trump policy mix, it’s all the headwinds. It’s the hard things. It’s trade policy. It’s tariffs. It’s government spending reductions. It’s immigration restriction, which, by the way, hasn’t been as bad as feared. But once we turn around, folks, and we start focusing on the more positive aspects of the Trump policy mix, namely lighter taxation, milder regulations, and lower oil prices, and ideally a huge surge in capital expenditures, then, you know, we could recover from that recession and be better off. You know, 20, 30, 40 years ago, recessions weren’t a terrible thing. They were kind of like a reset, you know, a little bit of a breather to have a more sustainable expansion later.
03:19 Speaker A
Right. On that positive note, Jose, always great to see you, my friend.
03:23 Jose
Terrific. Thanks. You so much. Thanks.