We gotta talk Federal Reserve Because boy, we've got a lot of different reports coming out from the Fed and one from The Economist that's really phenomenal. We'll be going through uh in this video here and we'll also be talking about how you don't want to experience Jomo or fomo yes, there is now literally a Jomo and we'll break that down all uh in this segment. So first, let's start with a few charts that initially might make us a little nervous, but then we'll balance that off with maybe a little bit of Peace of Mind. Who knows? We'll see.

Let's balance out what's going on the market because there's a lot of noise. So here's the first chart we've got to pay attention to: I'll actually keep myself removed so that way you can see all of it. This first chart is the five-year Break Even chart. Now we've been studying this all year long, so you should already If you're a regular viewer of the channel.

should already be uh, pretty familiar with this and uh, hopefully familiar with this, you know. nice downtrend that we were having on the five-year break even. It's not perfect, but we had a pretty decent downtrend here on the five year Break Even Unfortunately, that has somewhat gotten destroyed a little bit over the last month and that's because we've gotten data out from January like hot Jobs data hot PPI To have a hot CPI data. It's so our Trend that we're really paying attention to looks a little bit more sealinged like this, but it's difficult to call it a trend because, well, you know, you know you're kind of just re-accelerating on the five-year Break Even curve.

Now, what is this curve and why is it so important? Well, the five-year Break Even is a quick recap is essentially your bond Market's expectation of inflation. and anytime we get this sort of resurgence in the five years especially if we start breaking Trends or now we're making harder to actually create Trends it's a sign. The market is more uncertain about what the future actually holds, and the market is pricing in higher rates of inflation. Usually coinciding with that, you're getting a higher terminal rate from the Federal Reserve.

Now, in the long Grand sort of scheme of this chart, over the last year, the chart is straight down, which is phenomenal. It's essentially straight down. However, even that essential straight down chart, the trend line has somewhat broken a little bit. right? You're starting to see maybe that move up and if you were to Trend it like this.

yeah, that's not too much of a trend, that's a two-point Trend Yeah, maybe you call a third point over here. Point being, you've got nervousness about a Resurgence of inflation and that Resurgence in concerns over inflation uh, suggests we're first of all, a lot further away from the 2018 Federal Reserve Uh, you know, sort of u-turn at the end of 2018 where the Federal Reserve decided. you know what? we're not going to continue raising rates and all of a sudden the market had its greatest rally throughout the first six months of 2019 after the pain of the end of 2018. But inflation expectations there were sitting around 1.6 percent.

Right now, they're sitting somewhere on 2.5 almost a whole percentage point now away. we were starting to Trend to Breaking two, but then we shot right back up thanks to the January data, which is not great now to offset that, Fortunately, the financial conditions have immediately tightened actually quite a bit, which helps the Federal Reserve relax on this idea that they need to be so excessively aggressive. Here is a chart of the Financial Conditions Index as put together by Goldman Sachs and you can see Financial conditions in the month of February have tightened quite a bit, and specifically why they've tightened. Well, it's this: Trifecta of pretty rough reports that we've gotten from again, either Jobs or CPI or PPI.

On top of this, real rates in the United States compared to the rest of the world are now probably yet some of the highest levels that we've seen over the well. This certainly that we've seen in this tightening cycle, but they're also relative to other countries that are relatively modern economies. Uh, like ours, we're seeing some of the tightest conditions on real rates. Take a look at this particular chart here.

it shows you that real policy rates in major Global economies are positive in the United States and Canada. with the United States at real rates at positive 0.95 percent, Canada at point seven percent and New Zealand Switzerland Norway Australia Japan the United Kingdom, the Eurozone in Aggregate and Sweden still actually negative with real rates. Now, the way they calculate real rates is you're basically taking rates where they are and then subtracting inflation from that annualized inflation generally. So this is where you're getting where real policy rates sit.

and the United States is finally in an era of positive real rates, which that's what you generally want to try to crimp the economy to stick us off. Landing You have to take the heat out of the economy, and you generally do that once real rates become positive. The Federal Reserve has never paused their hiking cycle until these rates have gone positive. And the good news is they are positive now and in combination.

Or should I say, maybe in conjunction with real rates actually going positive and Jerome Powell suggesting hey, you know, maybe we can just continue to sort of look through the January data. We've actually seen some pretty substantial surges in particular sectors of the stock market at the beginning of 2023.. you can see consumer discretionary communication Services I.T Tech right? These are some of your biggest gainers at the beginning of 2023, relative to what were the gainers like utilities, energy, and Staples and those becoming losers at the beginning of 2023, despite them having been the gainers in 2022. Now, obviously, we know that the Breakeven rates are moving up on the five year.

That's not great, but at least it's being offset by tighter Financial conditions and real rates. And really, what it does is it says: look, we just have more work to do That's obvious at this point, but with some of the hot reports that we've gotten, there is this concern that the Federal Reserve is potentially going to come out with some form of 50 BP hike or some kind of rug pull Basically, and I'd like to point to Mr Barkin from the Federal Reserve who was quoted over here in a Nick T article that circulated pretty much right after Loretta Mester and right after Mr Bullard suggested oh, you know we were actually Four 50 basis point hikes pretty much right after that, Nick T ends up sharing this article of the Wall Street Journal. It's an article that he wrote unbark and stance on it. Now, one of the reasons this is so important is because Nick T is generally deemed to be sort of the mouthpiece of the Federal Reserve kind of where.

We don't know this, but we can sort of suspect that Jerome will probably text Nick T and says hey, you know what can you massage the messaging like this today. It kind of feeds into the idea that the media is sort of just the mouthpiece of the government anyway. But uh. anyway, so we don't want to go tin foil out here.

so uh, anyway, let's keep going. So what do we have? uh in this? uh, in this piece? over here, let me fix the storm cable over here. Uh, what we have is basically Barkin suggesting that uh, he's a big fan of continuing with 25 basis point hikes and getting rates above to really that five percent range. We know we unanimously move to about 4.5 percent.

But what is interesting that Nikki T shared this piece where Barkin suggests he likes the 25 basis point path because it gives us the flexibility to respond to the economy. Basically, it lets you just say hey, we'll just keep hiking for longer, but we're not going to go with more aggressive sort of 50 basis point hikes I think that's basically priced in I think we had some fear-mongering of this 50 BP hikes I Personally don't see that happening I think this Nick T article re-confirms that, especially as potentially a mouthpiece of the fed and uh, Barkin suggested that regarding the January reports and this is actually really powerful Also, not just reiterating 25 BP hikes, but also because hey, what's the FED saying about these January reports? Well, what's fascinating is this section right here where Mr Barkin said economic figures over the last two weeks have shown surprising resilience and spending and hiring. But and here's the big one. This is a big but but he added he wasn't ready to substantially revise his Outlook because the potential for unusual seasonal volatility including a longer holiday spending season in the fourth quarter, warmer weather, and changes in how employers are managing the size of their Workforce Given recent difficulties in hiring, now, this is really it interesting.

I Mean, think about this for a moment. This winter has been bizarre. We had a colder December but we had a warmer January you almost had as many are saying a spring like January And what's interesting about that is in the last. CPI Report For example, we saw this big boom.

All of a sudden, an apparel spending. Apparel has been one of those good sectors that has been plummeting from an inflation point of view. Why all of a sudden is it up essentially 9.2 percent ish on an annualized basis Or sorry. I Think it was 9.6 because it was 0.8 month over month that annualizes out to 9.6 percent annualized inflation? That's insane.

Why would apparel be moving so hot? Well, some were arguing it's because since January was hotter, you ended up having people buy potentially spring clothing in January. Now, what's interesting about buying spring clothing in January You might think, come on, like, who cares, Like if you buy it in March versus January What's the difference? Well, the difference is the same thing that happens with winter clothing at the end of the winter season is the opposite of what happens with spring clothing in Winter. Let me explain that for a moment. and I think the easiest way to do that is graphically because I Think that might have sounded a little confusing.

but if let's say your winter season, your winter selling season is October to January Your merchandise for the winter season is going to be most expensive in October It's probably going to be most full price in October and it's probably going to be at the lowest cost uh in uh in January February or it's most discounted. That's because at the beginning of the Season people go by their winter clothes and at the end of the season, they don't really need any more winter clothing. So the apparel companies discount the winter clothing. But when would spring clothing generally be the most expensive? Well, probably around January Because it's the beginning of the spring era.

It's the beginning of the spring shopping era. So there is this potential idea that a warm or January could have actually led to a spike in apparel costs and that really, maybe what uh, Mr bark in here was saying is hey, look, this was a weird winter. It's also a unique era coming off of massive seasonal adjustments, where not only are we no longer using two years of data because of the pandemic for weightings, we're only using 2021, which is the first time we've only done one year uh, in in recent history and now we have substantially higher weighting to certain categories, especially like housing which we already know we're running hot in the transitory sort of. or maybe I shouldn't say the trans story, but the disinflation hasn't actually started occurring in those sectors.

So you do have this this potentially bullish look through argument that's happening at the Federal Reserve Now that puts quite a bit of weight on the next CPI reports, right? obviously on March 20th, Uh, sorry, on March 22nd, you're going to have the next Federal Open Market Committee meeting uh, end. and then you'll have the J-pal press conference. But obviously the next CPI and the next jobs report are probably going to be more critical than what we actually had in January. Now that's wild, but because of the seasonal adjustments, you're actually putting more weight on these next reports.

The next CPI report, by the way, is March 14th because if we end up seeing something like a spike in January and then a correction sort of back to Trend uh in in February, then maybe the Federal Reserve would be inclined to actually look through the hot data of January that we got if we ended up getting two strong reports in a row. Oh, we could end up seeing that March Fomc meeting and the Summary of Economic Projections revised. Uh, in other words, the terminal Fed funds rate. What if we start seeing something like a 5.75 or even a six handle What If The Fed thinks GDP is going to be higher for longer and therefore they might have to hike more, right? These are all things to obviously consider.

Now The Economist gives us a little bit of color into how successful the Federal Reserve has been when it comes to Landing a soft Landing. They actually suggest that a soft Landing originally came from this idea of the Apollo 11 mission, where the goal was basically to take some heat off the engine so to speak and softly land the Lunar lander without crashing it right. Unfortunately, in the last time we tried it, well, the last major time we tried to do this in the 70s, Paul Volcker ended up pushing us into as they say here, major and successive recessions as well as the worst joblessness since World War II. And so when we look at hey, are we going to have a soft Landing or not, it's somewhat worth looking at.

Well, how successful has the FED been and The Economist gives us some insight into that. They say if history is any guide, fears of missing the soft Landing are likely to return. It's not that soft Landings are impossible. Since the 1970s, Fed policy makers have managed them twice.

We had soft Landings in 1984 in 1995.. America's stock market began to Rally just as interest rates reached their Peak and investors who bought early were rewarded with sustained multi-year bull markets. Obviously, if you're heavily invested in stocks right now, you're hoping for a soft Landing Which a soft Landing could be no recession. or it could be a very, very minor recession without a meaningful increase in unemployment.

And that could happen if it's sustained by inflation essentially plummeting unsticky or sticky. Rather, inflation becoming unsticky and going away. and hopefully, hopefully, hopefully, hopefully, you know, a company earning cycle over the next, uh, year and a half here that doesn't end up substantially below estimates that end up leading to some sort of yeah, you know, earnings per share crash in markets. But anyway, there have been six other tightening Cycles in the last 50 years, and all of the other six, unfortunately were followed by a recession.

And the lesson for the or from The Economist here is that if out of eight times, you were only able to land a soft Landing twice, you have about a 25 chance of sticking a soft Landing Just based on history's guide, that means you have a 75 percent reason of believing the soft Landing is just a myth that perpetuates a sort of bear Market rally. Now, a lot of January's bear Market rally was really driven by One retail retail plowing over a billion dollars a day into the stock market in January and number two short covering institutions caught offsides thinking Shorts would continue to protect them in 2023, only to get squeezed. This squeeze has been squozed. Now we'll have to see how markets react to this data or you're going to end up getting a trend.

But what else has the economist tell us? Well, for soft Landings Js Generally, once the Federal Reserve began to cut rates in soft Landings the bad news ended. Once the FED cut rates and soft Landings bull markets ensued and you had multi-years of positive returns, whereas in Hard Landings you actually still had the worst worst. Parts Essentially, to come, weaker employment, weaker housing, weaker earnings per share it at companies now one of the things to consider because it always comes up. Even though I've made a plethora of videos about the darn fed Reserve pivot.

It's important to remember that when the Federal Reserve ends up pivoting in this cycle, they are doing so because they realize they have achieved, or at least they believe they have achieved fighting inflation right. This cycle, the FED only pivots when inflation is convincingly falling or gone towards two percent, right? So when you get a Fed pivot in this cycle, you're actually expecting probably the most bullishness from markets, even though some folks like to point to charts that are very misleading suggesting that oh, If the Fed pivots and reduces rates, the worst is yet to come. That would really imply that the Federal Reserve pivoting on inflation is not why the markets are rotating down. Markets are generally pretty concerned about the Federal Reserve in its fight against inflation, though we could also see the markets manifest fear thanks to an earnings Crush right? Uh, you know we could end up having a Fed pivot and inflation ends up being gone.

But how bad that things get from the Fed's uh, lagging policy rate increases And that's where the question is: is the stock market pricing in, uh, an EPS crush? or is this this stock market more concerned with the odds of inflation staying around sticky and for longer and essentially inviting a new Volcker era? My personal belief obviously we've said this pretty regularly on the channel is that we're likely over 2023 to have a lot of noisy data, ups and downs, and volatility. But I am a big believer in the Nike Swoosh recovery, where we, probably, although it's obviously not certain I have probably recognized some form of bottom behind us, and this Nike Swoosh recovery is probably going to look quite volatile on the up and down. But it really reiterates the idea of essentially by the dip in 2023, which was not the 2022 strategy 2022 strategy where if you really wanted Alpha in 2022, Sure, the shorting was the way to get Alpha in 2022. That's probably a lot more risky in 2023, but we'll see The Economist takes a little bit of a bearish point of view though, and that's in contrast to my point of view.

They suggest that the stock market is really a bad guide for suggesting if you're going to be in a situation where the stock market has bottomed and will continue to go. In fact, what's more of a guide in their opinion is the the history of previous Fed tightening cycles and how soft Landings that have occurred were generally preceded by relatively low inflation accompanied by looser Bank lending. While Unfortunately today we have exactly the opposite. we have high inflation and actually tightening lending standards and the fear is that those are going to lead to job losses and crushes and earnings.

Of course, this is where I respond and look at well leading data. Whether that's in hiring or the supply of labor actually suggests that we shouldn't be seeing a labor induced inflationary regime continuing any any more than maybe the first few months of this year as we've talked about many times before on the channel. whether that's the excess Supply we have of drivers for Uber Lyft the excess availability of people in Tech at Starbucks at Chipotle look at Cloudflare's earnings call, look at what Procter Gamble and Tyson and Johnson are saying All of them are saying look, there's some Embers of inflation, but we're at a limit in terms of how many, how much more we could really raise in prices. Maybe we're on our last cycle of price increases and that's it.

Then then we're then our margin is getting squeezed if if costs continue to go up. However, we're starting to see that light at the end of the tunnel in the second half might start looking more disinflationary. Or at least you'll see a pause of inflation. So that's that's an idea.

You've got insights on both sides saying look, inflation could continue to drive us into an earnings recession, especially if it stays around stickier for longer. But I'm of the mindset that as long as inflation can get conquered, the entire reason we need tighter rates is not structural. it's solely inflation based, which is the result of us printing as much money as we did during the covet cycle. So we'll see some say Hey You know, a recession is exactly what we need.

We need a recession. We need to force a recession so we can actually make sure we get rid of inflation. Maybe it's entirely possible that we have to slightly force a recession. And this is where some folks say, you know what if there is no recession, you could actually end up having a worse outcome? Here's a piece.

Uh, from Stephen Blitz Who suggests that the data we're seeing now is pointing us to a recession? Whether you look at the inversion of yield curves or you look at retail data, uh, hey, this? Yes. January We had a nice little pop on retail. Could be based on some of the seasonal factors that I've explained earlier, but oh, there goes. Siri Go away.

Siri There we go. Uh, but take a listen to this quote right here. Employment is a lagging indicator until it is coincident with the start of a recession. Nevertheless, activity is slowing.

real policy rates are positive, the curve is inverted, inverted, and still sticking. When we are still sticking with the mid-year recession call as a base case. If there is no recession, outcomes will be worse. Suggest Stephen Blitz Here and I Think the reason he suggests that is because it'll without an actual slight recession, you keep inflation higher for longer.

You don't want inflation higher for longer. You want that inflation going away. Fortunately, from at least what I'm seeing in company earnings calls and reports is that inflation should be continuing to go away. Especially once we get that housing data showing a decline in owner's equivalent rents.

and then Services maybe leveling out thanks to finally less wage pressures. Maybe maybe by the end of 2023, we don't end up having sort of a double dip surge of inflation. We can get rid of inflation, we'll see. Uh, but this idea about uh, about no recession potentially being bad because it keeps inflation ignited is something to consider to where.

Maybe that's just what we need as a healthy part of the cycle. You go through a shallow recession and that's what it takes. Uh, this individual suggests that the economy slide towards a contraction is looking normal. In other words, it's looking like that is exactly the path we're on.

However, by threatening to hike by 50 basis points Financial conditions have become less easy and ultimately you could end up seeing more pain in the stock market here in the short term, as well as dragging down discretionary income. So in other words, while all of these these indicators that Mr Blitz is looking at such as the inverted yield curve, real positive rates, and the lagging effects of a hiked monetary policy Mr Blitz thinks hey, you don't want to get too hawkish here because then you could really push us into more pain. So you've got a lot of of these sort of perspectives on where the markets could go. And it's kind of frustrating because sometimes it feels like they're all pointing in different directions.

but I think they're actually not I Actually think they're pretty clear I Think it's very clear that yes, the economy is trending towards a recession. Yes, the odds of no recession and that Goldilocks sort of soft Landing is only 25. that is, according to the economist. as we already reviewed all of that, indicating we are trending towards a recession.

Yeah, we had retail sales spikes and some data spikes in January, but we think those are mostly seasonal until we get confirmation that they're not, especially a January sort of adjustment cycle. It's too soon to say that. Oh, that's it. Here's the second wave of inflation, especially with leading indicators suggesting that from companies.

hey, it's getting easier to hire. there's more availability of Labor and more availability of Labor Kind of suggests that eventually the unemployment rate will probably rise just like the FED is looking for. That would also suggest trending towards that recession. But all of these down arrows also suggest just inflation goes away, right? you? As long as we're trending towards a recession, we should see inflation go away.

And since inflation expectations are anchored, we really hope that we don't end up seeing a second wave of inflation. And this is where the FED really has to guide us dangerously close to that recessionary line where yep, maybe we end up having to dip slightly below before we come out, but there's very little at this point. at least that suggests hey, look, we're definitely not trending to a recession I Don't think there's anything that says oh, everything's up. We're definitely not trending to a recession.

Yes, you could point to Temporary retail sales data, but I think that's more of this floating Arrow here where you're still on a trend towards a recession. but yes, you're maybe slightly above that recessionary lane I Don't think there's anything glaring that's like we're definitely not going to a recession. Uh, then. Although that would be the most ironic right if we end up not having a recession because this has been such a predictive recession.

Uh, so I don't think you necessarily have data that suggests, okay, definitely no recession. Well, at the same time. I Also, don't think you have data that suggests oh, we're definitely in Hell over here. In terms of the data's so terrible, right, consumers still have substantially more savings.

Uh, and sure, while the excess savings rate has declined and a lot of people are in my opinion using that as uh, there is a uh, clickbait uh, it's the excess savings rate you can Google the excess savings rate. But I'll go ahead and pull up the chart for it and the personal savings rate has fallen substantially even below prior levels of before the pandemic. You can see that on the chart here. Actually, let me remove myself so you can see that a little bit better.

We're at one of the lowest personal savings rates that we've seen. Uh, really. since about the Uh, the the Uh 2005 era where the personal savings rate fell to around levels where it is now. But look at pre-pandemic you have the personal savings rate substantially higher than where we sit today.

And historically the personal savings rate has been a lot higher. So certainly people are not saving like they used to. And if we zoom in to just maybe the last 10 years here, you can see we're certainly at the lowest levels of a personal savings rate and that is starting to slightly tick up you saw it slightly take up in December. However, it's very, very low.

The way to offset this idea though that this is definitely bad news that this is definitely this giant arrow to. the downside is by remembering and I've mentioned this a few times over the past few days, so forgive me for sounding redundant I Just think it's so important remembering that the average checking account of somebody who had two and a half thousand dollars to five thousand dollars in the era before the pandemic. So like 2019 now sits at an average of 12.8 thousand dollars of excess savings. That's different from that personal savings rate.

Yeah, the personal savings rate might be low, but if you're sitting at two and a half to four times as many savings, maybe you don't actually need to continue saving that much and you're still able to spend in markets and in the economy. So point out of all of this this entire segment is. yeah, you got to join me on those programs on building your wealth envelope, obviously. But really, the big bottom line out of all of this is when I try to reconcile all the noise I'm not seeing things that are so terribly bad that I believe I need to be completely out of the market I Did feel that in January of 2022 I Do not feel that here in February of 2023 I Also, don't feel like things are So Glorious in the economy that we're definitely going to avoid a recession.

and then we're definitely going to the moon. So that to me says I don't want to be all cash and I don't want to be heavily in margin and that's where I think the easiest way to sort of reconcile all of these perspectives is probably and of course you've got to personally come up with your own allocations I can't do it for you, but I probably thinks it may I Think it makes sense to be exposed to equities And certainly, you know Bond Portfolio: Maybe a 60 40 invested portfolio to the tune of maybe 80, 80, 85 percent 90. Maybe keep that 10 15 around to psychologically help with some of the volatility that we're going to get, but that's been my my thesis for about the last three months and uh, it is. It's been pretty consistent.

uh, and so uh, hopefully that helps. uh, guide a little bit. Uh, how how all this noisy data doesn't necessarily all have to point to deep dark recession? or Moon it actually could just point towards. Okay, yeah, this is the process of a Fed managed disinflation process.

Could end up going to crap fed, could end up breaking something, but I would call that a tail event. Let me actually draw that graphically. So a tail event is really when you look at the bell curve of probability outcomes. so you look at a bell curve.

This is not necessarily the best bell curve over here, but you end up with Tails right. So you have a left tail and you have a right tail. These are sort of your lower probability events outside maybe the five percent uh range. So if you look at you know two standard deviations off of the midpoint, you're probably if I'm drawing a bell curve correctly.

Over here, you're probably at over here looking at maybe roughly two and a half percent probability and over here two and a half percent probability. Maybe it's a little greater, but I think everything everything going to hell in my opinion is probably over here on that two and a half percent chance and everything just straight. Going to the Moon without any kind of volatility you know Larry Kudlow V shape recover probably in the order of a two and a half percent chance as well. Uh, whereas I think there's much greater uh of this Yes, look volatile Nike Swoosh And that's that's at least where where I'm placing my bets.

uh, could be wrong, but we're not placing my bets and I always like to say that because I put my money where my mouth is even though I changed my mind a lot. Uh, I Do put my money where my mouth is now and then. Of course you have this question here: Why is the risk-free rate five percent? It's because your opportunity cost of sitting out the market. It's actually substantially High You know if if the if we do end up Landing a soft Landing which I think is is probably the base case which could be a shallow recession or or a very close recession.

uh, you, you're probably going to sit out on massive Equity returns or even Bond returns, right? So if you were to invest today and then a year from now, the S P 500 is is up, you know, 15 but you were all in on a five percent risk-free rate. Well, you just missed out on ten percent. Uh, and so that's uh, you know that's that's pretty important. Oh, that reminds me we didn't talk about Jomo uh, we're supposed to talk about Jomo So uh, let's touch Jomo Really quick because I Thought it was very fascinating.

Is you have this this idea uh about the joy of potentially missing out and I think this is really like a bear I hate to say it who's lost his mind? Uh, he literally writes Jomo this is the opposite of fomo fear of missing out. it's the joy of missing out and Scott has crazy or has Jomo on the crazy stock market for now while earning five percent on six month T bills. And and basically this Reiter rates this question that we just got like hey, look the risk-free rate on like like six monthers or whatever is is basically sitting at close to five percent. Why Why would you invest in equities if the average long-term return of equities is, you know, seven percent without dividends? Uh, maybe nine? Nine point One percent with dividends reinvested over the last 40 years? Why would you bother investing in equities and you really wouldn't right? You really wouldn't like the spread between the next 12 months, even of earnings per share on the S P 500 and the six month T bills is only 50 basis points? That is a very, very low spread.

It basically says why bother with the risk of the stock market right and U.S Money managers are sitting on the sidelines with six trillion dollars of money ready to invest and that actually uh is leading. A lot of people say hey, they're just gonna sit on the sidelines and milk their five percent or whatever. but there is a very big counter Trend to that which says well, if we did have a soft Landing you're gonna get caught off sides if you're sitting in your five percent T-bills because you're gonna be that person who's today going I'm making five percent risk free. Meanwhile, the stock market maybe looks back at you in two years and goes two years went by and we, well, you made your five percent per year.

We made 15 per year, right? That's possible. Of course, with that risk comes the chance also that it's actually Equity Bulls who end up sitting off sides and they end up getting screwed with another 20. Downside: Again, nobody really knows but I'm staking my uh my poll so to speak. You know with the Uh with the bulls on this one for for equities.