Yeah. Just help us understand and you're thinking as it pertains to this timeline. I mean the markets are hoping that the Fed
might turn. Is it the right time to wait to have that sort of hope.
I think it's quite likely that inflation will peak sometime this quarter and we could see a peak in the Fed hawkishness in Q4.
Meanwhile traders didn't want a high quality rate actually 75 basis points in this meeting. And by the end of the year I think
trade rates could be between 2.5 percent or two point seventy five percent. So we had to get toward this timeline and only
then we could think about cutting rates next year. So that could mean growth is going to slow down in the next few quarters. But
having said that I still think that the risk of recession is low because it's sort of a second Mr. recovering Soviet banking on
the recovery in service economy to offset the slowdown in the goods demand and maintain the economy in a float.
So how do you position around this meeting when it comes to stocks or thumbs the bonds around or even around the dollar or
crash. So we are sitting on equities because I think a lot of the bad news is only doing the price.
And as so the inflation peaks. You should start to see a recovery in the equity market because the Fed commentary
incrementally and become less hawkish going forward. So that should help equities and bridging the equity market.
I think it's time to start looking at tech stocks because we have already seen a large easing over the last six months. Most
of these names are down 25 30 per cent. Nasdaq is down 25 percent plus. So a lot of it bad news is only beating the price
now of a year from stocks. I think makes has to look an equity market has spent it's a better non market. It's down more than
25 percent in the last 18 months. And the policy is becoming more supportive. We know that China will be the one economy
which will expand its fiscal policy and will also keep policy accommodative. So DAX should support the economy and the equity
market. OK. The rest is to lay out what you just told us though if ever
it is the time to start looking at stocks or me and stocks. But you just told us it's going to take at least six months for us
to figure out if inflation has peaked and if the Fed will in fact take that information and then start turning it. I'm just
wondering whether it's get to your point. Is it too early or should we just wait for that to be really really really really
visible for investors. Well markets old Christine Su Keenan six months in Venezuela
inflation Big Ben the Fed be Kokesh next week big place. So I think the rally is going to be in the squad car and fed be
cautious could take place in Q4. So I think this would be a time to start looking at equities specificly. The broker now names
Joel Weber. Those would be tech stocks and John Equities. Yeah but my point here and I'm not pushing back but my point here is
the Fed doesn't know when inflation is peaking. How do we know when inflation is peaking. How can we make that call.
Well if you look at some of the inflation expectations for next five year they came down from two point one per cent to 2.8
percent last month. And the key driver for inflation has been the commodity prices. And we have seen 15 or 20 percent slump
across the board. But it is equity commodities metals or oil prices. So given the slump in commodity prices I think it's
quite likely that inflation is starting to come down in the next few months.
How are you looking at the bond market right now. It seems like they've lost that defensive start of play. But but you know
there's a lot of questions about you know with liquidity tightening what does it mean for credit risk out there as well.
How do you see things right now. So we are selectively dipping into the bond market. We like investment grade bonds because now
we are really close to 4.5 percent. That's the highest in that you've seen in the last 10 years. And
if we do indeed see a recession it's quite likely that the pressure is will come down and your couple in the investment
grade bonds may be protected. So if investors can buy and hold those bonds I think it can generate 4.5 percent kind of returns
in the next one year for risky investors. I think they can look at the mushy market hot currency sovereign bonds these bonds
yielding more than 8 percent. There is a lot of risk definitely but given the very high yield it makes sense to allocate some
capital to that part of the bond market desperate. So these are the two spaces that you're looking at within fixed income.