What’s Next for Rates, Inflation, and the Markets with Joe Keating

Tom F (00:40.388)
Well, Joe, welcome back to the Community Debate podcast. I know it’s you’re a kind of a regular here, so I hope you’re doing okay and kind of surviving through the ups and downs of of what’s going on in the Middle East. so just checking back in with you, how how have you been?

Joseph Keating (00:57.607)
very good Tom and you know for any of us that work in the financial markets the the volatility I guess is what makes it interesting. So it’s o it’s okay that we’re volatile as l as long as you know we get the the the outcome of the policies that we would like to see in place.

Tom F (01:17.186)
Right. And like you said, it’s n it’s it’s it’s never a dull moment and it seems that it’s been that way for a couple of years and I I I don’t think that’s gonna change anytime soon. So anyway, we’ve got a a

Joseph Keating (01:26.545)
A as long as Mr Trump is the president, Tom, as you well know, there’s going to be a lot of action.

Tom F (01:32.728)
Yes. It never like I said, there’s it changes from day to day and some in some reasons it’s it’s like groundhog day, but y you you always know there’s gonna be something to talk about and and read about for sure. any anyway, let’s get into it. We got a lot to cover. I guess we got together last time back in the mid March period. at that time you had shaved off a little bit of your growth outlook for twenty six. I think initially you were two and a half to three percent, and then you were talking

in mid March about two percent GDP due to the Iran war and some of the uncertainty and the and the rise in oil prices. Are you kind of give us a some of your thoughts on that? Are you still sticking with that two percent prediction for this year? And also some thoughts if you want to step out onto twenty seven and and what are you seeing as some of the strengths in in the economy currently and do you have any concerns for the economy as it stands right now?

Joseph Keating (02:27.025)
Sure. Well well so th the the answer to your question, Tom, if I’m kinda sticking with the revised lower two percent outlook for twenty twenty six is yes, comma I think so. so so so let me explain what I what I mean by that. you know the the forward and in the forward momentum in the economy remains in intact despite some of the wind being taken out of its sails during the second quarter.

as you mentioned with the with the rise in oil prices and the rise in uncertainty all related to the Iran conflict. Let me just give you in the and the listeners just a little data in terms of why we had to bring that forecast down a little bit. So if we take average hourly earnings, which we could all think of as earnings, in in in May year over year was three point four percent and in June it was three and a half percent. So pretty much

you know the same number. But when we compare that number to the consumer price index over the same time periods on a year over year basis, it’s it’s a little bit over four percent. So what we what that means is that we’ve had negative growth year over year in real wages during the second quarter of the year. and and that’s that you know that that’s a squeeze on households. So the way households have responded

Is they’ve they’ve in the short run they’ve brought that savings rate down to around three percent. a little perspective. If you go back to January, the savings rate was 4.4 percent. and if you go to the first quarter of 2025, it was over five percent. So so so so to maintain their spending, households have lowered their their savings rate, and of course that can’t go on forever, but it’s it’s a reason that.

the the outlook for the economy in particular consumer sector for twenty twenty six had to be revised down just a little bit. The the the the the reason the economy is growing at at a decent rate here because that the two percent is not a bad number. It’s actually the the average growth rate in the economy since nineteen seventy is the continued build-out of the

Joseph Keating (04:54.493)
Artificial intelligence infrastructure, you know, think data centers. and that, as you you know asked about real strengthen the economy, that that is the strongest part of the economy by far. We’ve also got business capital spending not related to artificial intelligence being pretty strong this year. And and that’s because of the initiatives that were in the tax and spending bill signed into law 4th of July weekend of 2025.

which gave us full expensing on say building a factory, equipment purchases, research and development. We also in the first part of 2026 had larger than normal tax refunds because the we we had the tax cuts for no tax on tips for certain s types of for certain social security recipients.

No tax on overtime and an increase in the salt deduction to 40,000 from 10,000. And those tax rates, the withholding rates were not changed for 2025, even though the the tax effect was in place for the full year. And so that gave larger than expected tax refunds in 2026, although possibly it went to offset the increase in gasoline prices in early 20 26.

And then lastly, l let’s not forget sort of a a little icing on the cake as I’ve I’ve I’ve referred to it. we’re all watching the World Cup. It’s been it’s been fun. more fun when the US was still in it than it is right now. But you know, when we when we think about the getting to the round of of of sixteen to the championship game, that’s the equivalent of fourteen Super Bowls.

being held here in the United States. and and it might even have a little bit bigger economic impact than a Super Bowl because of the amount of foreign travelers that have come to the U.S. to to view the games. So all of those things are keeping the the economy moving moving along at a at a you know fairly decent pace here in twenty twenty six. Th the one sector

Joseph Keating (07:20.169)
that is stuck in neutral as it’s been for a couple of years is housing. We all know the issues there, it’s all affordability, and we don’t we don’t really see housing beginning to kick in to help the economy until we get mortgage rates you know down at least with a five handle. Right it’s about six and a half percent on a 30-year mortgage would would help if it even got below five percent and and probably a a little bit more easing of housing prices.

we we still see a very low risk of recession this year, although the risk has gone up a little bit because of the the rise in in oil prices. so w when we put it all together, businesses and and affluent households which are which are being helped by the record stock prices are really fueling the economy versus y your average household

Which is increasingly anxious and somewhat financially exhausted given affordability issues. In terms of watching for recession, I again say to everyone, watch two things. watch initial claims for unemployment insurance. This is a significant leading indicator of shifts in the labor market. initial claims for unemployment insurance were reported this morning at 215,000. This is easily remaining within the the range.

of about one hundred and ninety thousand to two hundred thousand at the l low end to just around two hundred and fifty thousand maybe just a touch above at the high end since late twenty twenty one. so i w we’re we’ve kind of extended a period here of low firing in the economy. maybe low hiring, we’ll talk about that more in a moment, but you know the the the the labor market appears to be okay.

The other thing, and and I always say this, is to watch credit conditions. You know, the the yield spread on corporate debt, both investment grade and non-investment grade to Treasury securities is going to widen if the credit markets believe that that b borrowers are gonna have a difficult time paying back their debt, which would demand higher risk premiums. So right now the average spread on investment grade corporate debt to Treasury Securities is seventy-six basis points.

Joseph Keating (09:46.441)
You can compare that to the average since December of 1996 of 152. So the investment grade bond market sees no issues relative to the economy whatsoever. And if we look at the high yield market, the current spread is 267 basis points compared to an average of 542 since December of 1996. So likewise the the non-investment grade market is also

not seeing any issues relative to the economy at at the moment. So we’re hanging in there with our two percent forecast for twenty twenty six and likely it’ll be similar to that for twenty twenty seven.

Tom F (10:35.371)
Okay. Well that’s that’s good to know on that that front and I can’t say I disagree with you there. you did mention like initial jobless claims and that was one thing I noted too this morning and have talked about in our in our morning calls with the with the group is just this sort of groundhog day with the initial jobless claims numbers always seeming to come in at two fifteen to two twenty. so that like you said, that low fire environment is intact. I remember, you know, w we ended the year.

Talking about the labor market in in specifics now that it was pretty lackluster. We were seeing some kind of some some real slowing, in fact some negative months of of job growth at at the end of twenty five, but then the first quarter it seemed to pick up. And I I recall you had a pretty interesting take on the labor market last year. could you kind of quickly go over that again and also kind of where you you know, how how are your feelings with the labor market as as we stand right here in the in the middle of twenty twenty six?

Joseph Keating (11:31.773)
Yeah. So you know, we did have what I refer to as a mid cycle slowdown during twenty twenty five, due to weakness in in the labor market, which was an unintended consequence of the increase in tariffs. So to to give you a flavor of the the mid cycle slowdown, the the the economy grew in twenty twenty three two point nine percent.

you know which is above that two percent average since nineteen seventy and in twenty twenty four two point eight percent and in twenty twenty five it came down to two point one percent so still pretty much in line with the average but below what we saw in twenty twenty three and twenty t twenty-four. You know economic cycles in the US tend to be long

There’s an average of roughly nine years to an economic cycle since 1960. if we exclude the turbulent era of the early 70s to the early 80s, when the Federal Reserve had to jolt the economy several times with a tight monetary policy to break the back of inflation, we can all recall you know that being the Volcker era. the current expansion began in May of 2020, after that two-month government mandated recession as the

economy was shut down because of the the pandemic. so the the current expansion is six years old. I do however wanna make the comment that the expansion of the twenty tens, which which is actually the longest on record

128 months, 10 years, 8 months, would likely still be rolling along if it weren’t for the government mandated shutdown in the economy. So that mid-cycle slowdown in 2025, which was due to the labor market. So let me give you some private sector employment data. I’m gonna leave the the the government sector out of this because we did see due to some of the efforts of the Trump administration a decline in government.

Joseph Keating (13:33.361)
government employment since October of twenty twenty four of about three hundred and fifty thousand individuals. So we’ll just look at the private sector. So if we go from the end of twenty three

To April of 25. And I go to April of 25 because that’s when President Trump unveiled his tariffs. The average monthly gain in private sector employment was 72,000. If we go from April of 25 to the end of the year, it was down to 21,000, still positive, but but quite a bit lower than the 72,000 in the the prior 16 months. The best studies that have been done on the impacts of the tariffs.

tariff say that the foreign manufacturers and exporters paid zero of the of the tariff. but the domestic importers, distributors, and retailers absorbed

somewhere between half to two-thirds of the tariffs, while consumers absorbed the other portion, somewhere between one third to one half. So the way businesses responded was by force feeding productivity gains by significantly pulling back on hiring to expand their profit margins. So employment was you know flat to to down slightly in these businesses, while volume and revenue continued to grow and therefore an increase in profit margins

that allowed them to absorb that portion, you know, the the largest portion of of the tariffs. In fact, if you take a look at S P five hundred operating margins, for calendar year twenty-four, they were fifteen point one percent, which is a really good number. If you go back ten years, profit margins are around ten percent. But they rose to actually sixteen point one percent for calendar year twenty twenty five as as the

Joseph Keating (15:30.263)
domestic importers, distributors, and retailers absorbed a good portion of the tariffs and then some. a good bit of a bit of good news here is that it appears as as you alluded to Tom, that the hiring pause, you know, the the force feeding of productivity gains in the economy is behind us, with private sector employment over the first six months of twenty twenty-six averaging eighty-eight thousand individuals a month, up from that twenty-one thousand

over the last those last eight months of twenty twenty five. So th the impact on the labor market in twenty twenty five was was clearly an unintended consequence of of the tariffs. it slowed the economy down, but that appears to be behind behind us, which is really good news.

Tom F (16:19.04)
And two, I I you know the the June non farm payroll report was a little bit, you know, it kinda came in a little bit weaker than expected. But the one sector that really has stood out as far as a you know, a real growth area for jobs has been the healthcare sector. And I think, you know, given the aging of the boomers and the need for home health care, I y you know, to me that looks like that’s gonna be a sector that just continues to grow regardless of what you know what

really is happening in the you know, in in the macro environment. I I mean d do you share that thought as well?

Joseph Keating (16:55.479)
you know, you know I do Tom and and I I say that a and I’ll acknowledge that I have two fourth year medical students, two daughters at at you know, right now. so I think their job prospects will probably be better than than, you know, recent grads on average, given that they’re they’re you know, they’re gonna be doctors.

Tom F (17:18.748)
That’s that was that was very good on your part, Joe, to get them in get them in the into that curriculum. Good for good foresight on your part. anyway, let’s move on with now from the labor market, let’s move to the other, you know, the other twin concern for for most investors, and that is inflation. have you do you think we’ve seen peak inflation for for twenty six and is that two percent target that the Fed has has has got its sights on? Do you think that’s still

Joseph Keating (17:24.415)
Ha ha ha.

Tom F (17:47.94)
Something doable that they can that they they can reach at some point, probably not this year, but sometime in the next year or two.

Joseph Keating (17:54.783)
You know, Tom, I I I have had a optimistic outlook on inflation that is that inflation should cool for some time.

Of course we had you know the tariffs kind of mess with that in to some extent in twenty twenty-five, and now we’ve had the Iran conflict and the increase in oil prices mess with that here in twenty twenty-six. but I do see us getting to the two percent target sometime in twenty twenty-seven. I’ll give you the reasons, but let me mention the one concern I think we all have right now about inflation.

Which is there are some inflationary pressures in selected pockets of the economy related to the boom in artificial intelligence related investment. consider that Apple, I guess it was during June.

raised prices across both most of its Mac and iPad lines due to the increase in the cost of memory and storage chips, which are being heavily absorbed by the expansion of the the data centers at the moment. So that’s that’s a concern that I have. of course w we’ll see an increase in production for both memory and storage chips in response to that. But in in the in the interim it is giving us a little bit of a of a pricing pressure in in

the economy.

Joseph Keating (19:26.169)
is is a couple of things. One, lower gasoline prices. although, you know, obviously that that’s a that’s a big uncertainty, right? that continued low gasoline prices i is is is obviously related to how the the conflict in in Iran and the negotiations play out. but our hope is that we we’re going to see a resolution there and that these lower gasoline prices will help the inflation statistics. secondly

You know, something that really kept inflationary pressures h

i high in the re reported statistics for a couple of years, even though shelter inflation was falling, was that shelter inflation works for the lag. you know, if you go to December of twenty-three, shelter inflation was running six percent year over year, December of twenty-four, four and a half percent year over year, December of twenty-five, three percent year over year, and during all three of those years, you know, rent was was running nowhere near that.

that level. Currently it’s about 2.1% the shelter inflation impact. So so that is helping the the reported inflation statistics. The effective tax the the effective tariff rates are actually helping a bit. So some history

In two in 2024, the effective tariff rate was 2.3 percent. It got all the way up to eleven percent before the Supreme Court struck down the authority that the Trump administration was using to put the tariffs in place back on February the 20th. and consumers had been absorbing, as I we mentioned earlier, about a third to one half of the tariffs. the administration shifted the authority, and now tariffs are running at around seven percent.

Joseph Keating (21:16.865)
So there is a moderation in the tariff impact. We’ve seen wages ease. so if you go to 2024,

wage pressures were about 4.1 percent in 2025, 3.7 percent, and currently they’re running around, as I mentioned earlier, 3.4 to 3.5 percent. So it’s not markedly below 2025, but there there is a continued easing. And then lastly, the inflation expectations data embodied in Treasury Securities.

continues to point to some expectation for a moderation in inflation expectations. So if we look at two years, the two year inflation expectation is about two point four percent.

that that’s down from a a couple of months ago when oil prices were so high w when it was closer to two point seven percent. the five year expectations around two point four also and the ten years about two point three percent. So inflation expectations you know are a little bit b above the the Fed’s two percent target but but they’re certainly not out of line with what we might expect inflation to to come in at. So

I’m gonna stick to my to my guns here, Tom, and that I think we’ll we’ll see an easing of inflationary pressures as we go through the remainder of twenty six and into twenty seven.

Tom F (22:47.591)
Well and and as we record this, we’re sort of right at the week before the CPI numbers come out for June. So you know, like you said, we’ll you know, there may be some near term pressure. I know that you know, we just had the FOMC minutes from the June meeting and they mentioned you you talked about the AI build out and what that’s doing of with as far as the the economic G D P numbers go, but the the you know the Fed members were really it’s kind of like they had

a concern that near term that’s going to be inflationary just because of the demand that it’s using for electricity, for just the construction itself of these data centers. But that longer term, of course, that AI will increase productivity, which should kind of lead to lessening price pressures. So it it’s kind of interesting that, you know, from that one, you know, that one element of of, you know, AI that near term is going to probably be inflationary, but longer term it it’s going to have that productivity gain that we see

suppressing price pressures. So it’s it’s kind of like I said, it’s kind of interesting that it’s it’s it’s presenting a dual dilemma at this time, but right now you’re seeing the price pressure more so than the improvement in productivity. All right. But so let’s kind of talking about the Fed minutes, let’s move let’s move to the Fed. We are now in the the era of of the new Fed chair, Kevin Walsh.

Joseph Keating (23:57.769)
Right.

Tom F (24:09.106)
Given the June meeting, were you a little bit surprised by the that his somewhat hawkish take at the at the meeting? especially now that we’ve read the minutes and to me the minutes were a little were a little bit hawkish, but they weren’t quite as they weren’t quite as hawkish as what we at least what I heard from from Warsh his statement. what are what were your thoughts on that?

Joseph Keating (24:28.511)
Well b th the the the somewhat hawkish tone of of the of the statement as well as Mr. Walsh did not surprise us, Tom. we wrote in the June first strategy statement that we expected Mr. Walsh to one protect the independence of the Federal Reserve.

two to pursue monetary policy that would achieve the Federal Reserve’s two percent inflation target. and three that we would see a return of Mr. Walsh’s hawkish orientation of his first term at the Federal Reserve from 2006 to 2011.

for for those folks who don’t follow the Federal Reserve as closely as you and I do because you know they have more important things to do. you know, during Mr. Walsh’s term, that’s when the Fed engaged in the first round of quantitative easing, that is the purchases of both mortgage back and treasury securities. and Mr. Walsh supported

th the first purchase, which was of mortgage backs, largely because what was going on at the time is that the bank balance sheets were shrinking.

w with the the the losses that were coming through in terms of losses on mortgage backed securities as well as losses on real estate loans. And so the Fed created a market for some of those mortgage backed securities that had to be sold by by buying, I think it was six hundred billion dollars of mortgage backed securities and he supported that. The the following year in 2010

Joseph Keating (26:10.509)
Mr. Bernanke went in engaged in what he we we all refer to as QE2, which was now a purchase of Treasury securities. and Mr. Walsh supported the the the purchases in terms of voting for them.

But he told Mr. Bernanke that he did not agree with it and resigned from the board, I think it was in February of twenty eleven. So so Mr. Warsh did you know show more of a hawkish bent as a as a policymaker back in his first term than how he acted during twenty twenty five when he was campaigning for the job as chair, where he talked about the the the

economy moving into a golden age where we could see productivity gains which could lead to growth in the economy and low inflation and allowing the Federal Reserve to to to cut rates. So we expected Mr. Warsh to to not be dovish during his

first policy meeting and we don’t expect him to be dovish as his term during during chair. Our assessment is that the bond market is not going to tolerate wishful thinking of a golden age. Economy saving the nation from inflation.

The bond market wants assurance that a Walsh-led Federal Reserve is serious about bringing the inflation rate down to the central bank’s two percent target. and you know, I think you might agree with this, Tom. The the the final statement or sentence of the policy statement was the most important development of the FOMC meeting, and I think sets the tone for the legacy Mr. Walsh will begin to build as chair. it simply stated that the committee will deliver prices.

Joseph Keating (28:10.525)
Stability, not price stability with low employment, just flat out price stability. So based on how things played out, we think policy is going to remain on hold. we don’t think they’re going to have to raise rates, although you know half of the members that that

that did submit forecasts are saying that rates could be raised during twenty twenty-six or by early twenty twenty-seven.

Because we think inflationary pressures, as I just covered, are going to ease. Once again, a lot of that is dependent upon what goes on in Iran with negotiations to end the conflict. And if if if that’s the case, that we do see oil and therefore gasoline prices remain low, that should cause inflationary pressures to ease, taking hikes off the table. But in order to get that inflation rate down to the 2% target.

I think it it it says the Fed’s going to remain on hold here for an you know an extended period of time.

Tom F (29:24.506)
Yeah, you talked about no mention of the full employment mandate. And I think you’re right. Yeah, you the Fed may have a dual mandate, but I think right now one one of those mandates is clearly in the in the superior position as far as being you know getting most of the attention and that’s certainly the co you know, the price stability mandate for sure. And that’s kind of the message loud and clear I think we all got from Warsh is that that like you said, that that

Inflation getting back to that two percent target is is job number one for you know for the Fed at this at this time. and speaking of that, kind of in line with that, where do you see treasury yields going over the next six to twelve months, kind of in light of w what we’re learning and and from the Fed and from the Chairman Warsh?

Joseph Keating (30:13.151)
Sure, well you know, again I I I’ve gotta put the the the caveat out there, Tom, that the the Iran conflict plays a a key role here with if we if if oil prices rebound.

and leads to higher gasoline prices and upward pressure on the inflation statistics. as you just said, that part of the of the Fed’s mandate appears to be job one. You know, I would argue it it probably always should be job one. so i i it it it could lead to the Fed tightening rates and the Treasury market you know

also remaining higher than than otherwise. If we if we leave the issues around the Iran conflict aside for the moment, we believe that a patient and steadfast pursuit of monetary policy by the Federal Reserve will lead to lower treasury yields over time. And I think that’s what Mr. Walsh is signaling that the Federal Reserve how they will conduct policy in in the in the in the in the future.

Joseph Keating (31:24.893)
Like today with the ten year being around you know a little bit over four and a half percent, the nominal yield has a real return plus an inflation expectation. and the key is to get that inflation expectation to fall. and if that can occur, that will provide lower nominal treasury yields over time. You know, c consider what happened during June, which which was which was fairly stunning.

If we look at the shorter end of the yield curve, say on a two-year Treasury note, we actually saw the yield on a two-year Treasury increase from 4.01 percent on May 29 to 418 by the end of June, and a lot of that had to do with the hawkish tone of the of the of the FOMC meeting. However, the two-year inflation expectation

collapsed a stunning 42 basis points during the month of of June, following from 272 at the end of May to two thirty at the two seventy two at the end of May to two thirty at the end of end of June. So

I think the the the the decline in oil prices and the the tenor of the FOMC meeting is what caused inflation expectations to to fall. Now the the yield on the two-year rose because of expectations that the Fed could raise rates. But I think that will come out of the market. and I do think that over the next you know year or so, we’ll probably see yields at both the shorter end of the curve, you know, around two years, out to the

Longer end the curve around 10 years decline, with more of it happening at the the short end of the curve than at the longer end of the curve. But I do think we’ll see an easing of both shorter term and longer term treasury yields as we go over the next 12 months or so.

Tom F (33:31.498)
Well let me finish up then, Joe, on on talking about the stock market. We can’t ever let you get away without your views. And it’s kind of funny when we were speaking back in March, it happened, I guess the S P was down about three percent on the day that we were speaking. Let’s hope that’s not let’s hope that’s not repeating itself today. But it did and that was on its way to a kind of a a seven percent decline by the end of March. So obviously we’ve had a nice bounce since then.

for the for the second quarter. took a little s starch out of it in the last day or two. But you know what what is your outlook as you sit here today as far as stocks go for the balance of of this year and probably even even beyond?

Joseph Keating (34:16.627)
Well, you I I you know, I don’t want to be accused of being a a permobl, Tom, but I I think we can see higher stock prices in the future. y I I think we’ll we’ll we’ll do better over the second half of the year. we’ll see more gains, but clearly I think over the next year we’ll see gains. And and here’s the reason. we are ha we are experiencing a blistering pace of earnings growth.

And that has been the dominant theme for the stock market’s res resilience so far in 20 26, despite the unsettling geopolitical headlines. So let me give you a coup just a couple data points. In in the first quarter, operating earnings were up 21 and a half percent year over year. Now let me give everybody a little perspective on that.

The the long run growth rate for operating earnings on the SP 500 is around seven to nine percent, which is an interesting number because if you think about you know the stock price gains on a longer term basis without including the dividend, the the gains are around seven to nine percent.

right in line with the long run gains in in earnings. So this 21 and a half percent gain year over year in the first quarter, it’s spectacular. and that’s what’s providing support to the stock market. For the calendar year of 2026, the consensus forecast is that operating earnings should be up around 23 percent.

They moderate a bit a bit in 27 to around 14 percent, 14 to 15. But again, th the these numbers are off the chart positive. and what’s happening is that the the productivity in corporate America and the efficiency is what’s driving operating earnings and and those profit margins. I I mentioned earlier that the profit margin in the first quarter was about sixteen point seven percent. you know, you go back to

Joseph Keating (36:36.709)
10 years, you know, it’s it’s eight to ten percent. So corporate America is doing a great job of increasing profit margins. in fact, the the the the pace at which profit margins are expanding are far exceeding the the reported productivity numbers for the economy.

I think that that’s largely due to the fact that as the the economy becomes more and more service sector oriented as opposed to manufacturing oriented, it it is is is difficult to truly measure productivity. and I think the productivity numbers are understated and that over time they’ll probably be revised upwards to more reflect what’s going on with with the increase in in margins. You know it’s interesting if we look

For the past two years, because we we’ve had good gains in the stock market over the past two years. The price earnings ratio at the end of May, well, let’s go to the end of June, was lower at just over 21 times compared to the about 22.6 per times at the you know two years ago. So even though we’ve had good gains in stock prices.

Earnings have been growing faster than the gain in stock prices, and we’ve actually seen price earnings ratios come down or ease a bit, which which is just a wonderful situation. So we think the outlook for growth in the economy and earnings remains positive, and therefore we look for stock prices that continue to work their way higher over the remainder of 26 and into 2027.

Tom F (38:24.148)
Well let’s let’s take a quick review here. Let’s see we’ve got GDP coming in around two percent or so. We’ve got a decent labor market. we’ve probably seen peak inflation moderating back towards two percent, albeit slowly. we’ve got a Fed intent on getting that inflation number back to two percent. we’ve got treasury yields reacting accordingly to that. So to me, that is a you know, if you’re being accused of being a permeable, at you’ve got

you’ve got the rationale for for doing it. So Joe, I just just keep being that bull and we’ll we’ll keep riding the stock market with you. so it’s it’s a good outlook to to to see those gains continuing and I’m sure everybody and all our listeners are hoping those gains do continue because that that would certainly just kind of be the the the the

the beneficial cycle that we all that we all look for. So Joe again, I wanna thank you for for your insights today and your time. And I’m sure when we get back in the circle back in three months or so, there’ll be plenty more to talk about. but again I wanna thank you for for your insight and and your your your time and just d you know good luck with the rest of the summer and let’s hope when we come back i in in a few months that that that these that that

bull market is continuing and and the outlook that we’ve talked about today is is coming coming to fruition.

Joseph Keating (39:54.755)
Well thank you Tom. I very much appreciate you having me on again. It’s always an honor to to be here. and I wish you and all of our listeners the same in terms of having a good end to the summer.

Tom F (40:06.752)
Yeah. Thanks, Joe.