FidelityConnects: Jurrien Timmer – The global macro view December 1, 2025

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Hello, and welcome to Fidelity Connects.

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I'm Pamela Ritchie. Markets and currencies are speaking

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up in a negative fashion this morning, chucking snow

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on hopes for a Santa Claus rally, which takes us

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back to whether we are in the midst of a cleansing

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moment in the markets or in something more indicative

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of a step downward after a truly winsome year

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for global equities.

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Could the volatility over the last few weeks be called a

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healthy pause or something more closely associated

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with the bubble trope that we keep hearing about.

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Joining us now to discuss the strong fundamentals

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currently underpinning this rather edgy market is Fidelity

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Director of Global Macro, Jurrien Timmer, live from London.

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Welcome. Great to see you.

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Yes, good morning.

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I just arrived in London.

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I was in Hamburg for a few days and before that, of course,

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in Holland where we did the show from last week.

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This is the final stop.

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I'm here for a conference tomorrow.

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Anyway, a little dishevelled but all good and we're

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ready to go.

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We're delighted that you fit us in.

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That's a busy calendar that you're holding right now.

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Actually, you've got a calendar behind there.

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I've got an advent calendar.

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You've got an advent calendar going, have some chocolate.

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Let's ask you about Bitcoin, actually, just to get going

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here. You mentioned even a couple of weeks ago that Bitcoin

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getting down to sort of 80K wouldn't be terrible,

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necessarily.

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It's on its way. What do you think?

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It reached 125,000 in October

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and it went down to 80

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and then it popped up to about 94 and now

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it's kind of getting closer to that

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80. I would say big support is around

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75, that was the previous peak.

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But, of course, you're gonna get the inevitable questions.

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All the Bitcoin

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fans, at 125 were like, well,

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it's going to 150, of course, and now

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it's substantially lower.

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I don't have the chart this week but I promise I'll have it

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next week, where when you see ...

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actually, we can pull up slide 13, you can see if you pull

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up a chart all the way from the beginning, which this

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one doesn't do, you can see that every

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advance, the slope of that advance

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gets less steep for

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every bull market, every four-year

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cycle that Bitcoin achieves.

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That makes perfect sense because the adoption curve

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flattens out. I mean, still rising at

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a pretty strong pace but the slope is flattening

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out as the adoption matures,

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as it would for any network asset.

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Now all of a sudden we're down and people are wondering,

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and you can see that uptrend line being broken there,

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whether the four-year halving cycle

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actually has been completed

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and that we now have another, I don't want to call it a

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winter because as the advances

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become less pronounced, which this one

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was, the decline should become

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less pronounced because Bitcoin is just becoming an adult,

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if you will.

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I think part of the story behind it is

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maybe the stablecoins now becoming much more

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mainstream and becoming the rails

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on which to build a lot of this blockchain

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infrastructure.

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Ethereum actually kind of is the token

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for that.

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Maybe some of the allure of Bitcoin that

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was so prevalent a few years ago is

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losing a little bit of that support just because

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we have digital money.

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I mean, we've always had digital money but there are other

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players in the room. I'm still a fan.

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I think from a store of value point of view

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Bitcoin and gold are still the two

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players that I want on the team.

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The store of value story right now is not

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as urgent as it

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has been in the past.

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I think Bitcoin just takes a back seat.

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You do see there in the bottom that the Sharpe ratio

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and the momentum curves are showing that

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it's sort of in the buy zone.

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If we go to slide 12, I've

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got the exact same chart for gold, you can see

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gold is positioned exactly on the opposite

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side of that.

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If we take it one step further and we go to slide 11,

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if you show all the

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Sharpe ratios, the 52-week return divided

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by the 52-week volatility, and obviously it's a squiggly

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mess there, it looks like a plate of spaghetti, what you'll

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see is for the 26 asset classes that I

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track the outliers are

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gold at the top and Bitcoin at the bottom.

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I don't want to have to choose, it's like choosing between

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my children, but it is interesting to see that they

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are on opposite sides right now where gold

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has corrected but it's holding 4,000

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pretty easily and Bitcoin is sort of living up to

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that reputation of Dr. Jekyll, Mr. Hyde

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where it's gold or it's digital gold but

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it's other things as well.

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One of those other things is a speculative asset,

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unfortunately.

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All the speculative corners of the markets have been

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shaken out in recent weeks, and Bitcoin certainly

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has been one of them, and maybe it continues,

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maybe it doesn't but again, I'm not in Bitcoin

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as a short term trade.

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I'm in there for the long run.

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If we do get towards that 75 I'm gonna

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be taking a pretty hard look to maybe add some

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exposure.

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It's interesting. Does Bitcoin become the bonds of

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digital assets?

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Bitcoin's trying to be money, right? I think by now it's

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won that battle that it is money.

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Money is a unit of account, it's a medium of exchange,

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it's a store of value.

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Obviously, the dollar, as long as you

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use it in a productive way, meaning it's earning interest,

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that's a store of value, it's a medium of exchange, it's a

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unit of account. Gold is all of those things as well,

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although no one's really using it as a medium of exchange,

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and Bitcoin, I think, has become like

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gold in that sense.

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Before stablecoins were really a thing, or all

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you had was Tether which is a little bit, you know,

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nobody exactly really knows what it is, Bitcoin

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really had a use case as if you wanted digital

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money and you needed to have it in far-flung

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places around the world Bitcoin was your thing.

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Now you can really just do that with stablecoin.

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You're owning dollars but you're owning them digitally.

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If you're in a country that has a weak currency,

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Bitcoin, yes, stablecoin, what's

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the difference at that point? I think there's

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a little bit of sort of

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an identity, not a crisis

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but an identity moment there that Bitcoin's dealing

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with.

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It's fascinating and it's a little bit maybe of a ...

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I was gonna ask you a question about your breadth

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discussion and equities and if, in fact, there's a

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little bit of a potential for a changing of leadership

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rather than a crash of markets, if that's

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one of the options out there.

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Maybe Bitcoin's going through changing

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of leadership a little bit within the digital space as

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well but it does feel like there's some changes of

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leadership that are at least floating out there as

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possibilities. Could you take us to the equity story on

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that?

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Of course. Just one final point on Bitcoin

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now that you mentioned that.

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I do think in the way that gold

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used to trade sort of as a pairs

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trade against silver, we'd look at the gold

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to silver ratio or we would look at the gold

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to the gold miners ratio,  I think Bitcoin

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has become legitimized enough that it will be

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looked at in the same way by investors,

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institutional investors, hedge funds, even

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regular end investors.

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In that sense the

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divergence between gold and Bitcoin ultimately

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will prove to be of benefit

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to Bitcoin because if someone's holding a lot of gold

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and has concluded that Bitcoin is like gold, and

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it starts to trade at what we would call a discount,

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I think you're gonna see that sort of redistribution

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there. On your point on market leadership,

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let's go to slide 4.

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Here we see the Mag 7 which is kind of in a

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holding pattern.

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Again, there's nothing wrong with holding patterns.

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Markets don't always go up and if they do go up

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too much in a row it becomes a little dangerous.

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We've seen that in recent weeks where what

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we call weak-handed longs are just getting complacent,

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they're just buying everything that goes up and then, of

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course, it doesn't.

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We're in kind of that digestion period or

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this consolidation period, which I think is good because

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shaking the tree of the high flyers

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once in a while I think prevents us from getting

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into a bubble-like situation down the road.

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What we're seeing here is the breadth in the bottom.

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These are percentage of stocks in the SP above

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their 50-day moving average.

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That's had a pretty good flip there.

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It had been quite weak, became a very narrow

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market but it's now flipped from 32% to 60%

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in just a few weeks.

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That bodes well.

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If you look at slide 2, which is the MSCI All

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Country World Index, that still looks pretty

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good. The market is correcting, not the end

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of the world, markets are correcting 30 to 40%

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of the time, but the breadth numbers, still pretty

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good. I'm not concerned

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in particular about the market.

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The SP 500 equal-weighted index has

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actually recovered very, very nicely,

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as has the cap-weighted index.

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I think overall the market is just going through

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some indigestion.

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If we pull up slide one you can see

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not only the SP but all the cats and dogs, and you see

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gold miners which are not cats and dogs, of course, but

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they are still up ahead.

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That's good for Canada, of course.

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The Bitcoin miners have come back quite nicely.

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That's become a little bit of a hyperscaler play.

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The markets are doing their thing and what

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we can do as long term investors is to

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make sure our thesis is still what we

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think it should be and then use

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volatility and adjustments in the market

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to rebalance.

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That's how I'm looking at this episode.

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Hello, investors. We'll be back to the show in just a moment.

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I wanted to share that here at Fidelity, we value your opinion.

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DialoguesFidelity podcasts available on Apple, Spotify, YouTube, or wherever

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else you get your podcasts. Now back to today's show.

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The discussion of valuations, and you've long

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said that earnings have taken over and that's over

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a year ago they've done that and they continue,

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it looks like, to have the earnings behind them

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to make the valuations believable, reasonable

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and and always you cut and slice and dice them with math,

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they're fine.

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That said, where does it get extreme?

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I guess that's the question. The valuations are not extreme

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enough, it appears, to call this a bubble

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but when do they?

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Valuations are extreme.

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Valuation is one of those things where it's like beauty's

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in the eye of the beholder.

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A bull can use one

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valuation metric to make a bullish case, while

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using the exact same price and the same earnings a bear

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can make a bearish case by using a different

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kind of P/E, like a cyclically adjusted P/E.

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There's no question if you look at slide 6, for

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instance, the P/E is high.

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The trailing 12-month

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P/E is at 28, the forward P/E

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is around 24, the

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5-year CAPE cyclically adjusted P/E

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is at 33, that's in the upper percentiles

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of historical values, so

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that is a concern, of course.

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It's not a good timing tool.

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Many investors have gone broke

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assuming that mean reversion will set it in,

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and it does eventually do so but usually

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long after that shop has been liquidated.

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For me, the most important thing in terms of the bubble

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watch is the bottom panel that shows the five-year

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change in earnings and the five-year annualized

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change in the P/E.

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Again, you look at the late 1990s

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and you saw that you had a massive run-up in earnings

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and then the earnings, they didn't fall but

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the growth rate moderated while the P/E

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side took its place.

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That created the valuation extreme that we had

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in 2000.

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This time around the earnings are skyrocketing,

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so that's good, nut the valuations, as

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we've often talked about, did lead the

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party, if you will, in 2023 and 2024,

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are no longer driving returns higher, which is

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not to say that P/Es aren't high but they're not driving

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the market anymore. They're basically flat year-on-year.

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This gives me some comfort that we're not at one of

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those extremes but then you get into the other

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question which is, okay,

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a 33 five-year P/E, what does that mean?

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That gets me into kind of the secular story.

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If we go to slide 14 I look at

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the long term trend.

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S&P goes up 10,11% per year, that's

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the pink rising trend there.

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Since '09, at least in my view, we've been in a secular

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bull market, that's the yellow line, and

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returns have been much higher than the average.

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They've been more like 15, 16% instead of 10,

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11%.

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When I look at the secular trend and I

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wonder when is it going to end, I look at the price

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movements, you got that stair-step higher, right, advance,

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correction, advance, correction.

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I don't see any reasons to be concerned from that

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perspective.

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Then you look at the P/E and it has gone

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up over the last five years.

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If we look at the discounted cash flow model, so

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let's go to slide 15, the discounted

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cash flow model, or DCF, is a fascinating

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tool because it's beautifully elegant because it

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incorporates every variable that you could you could

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think of, earnings growth, the

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payout, the risk-free rate, sentiment

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via the risk premium.

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The way the DCF works is that you look

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at what kind of earnings are priced in, or you use

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an average earnings growth of

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6, 7% which historically has been the average, and then

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you assume that the current price is correct, as

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the SP 6800, and then you solve

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for what kind of return is required

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for that price to be correct given the expectations

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for earnings.

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You get that return, for the U.S.

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using a 7% earnings

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CAGR that required return is about only 7%,

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which is very low.

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Then you subtract the bond yield, the risk-free

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rate and you get to an ERP, an equity risk

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premium of about 3%.

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That's very, very low.

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If you look at the chart, you have to really squint, that

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gets you to 2000 levels, it gets you to '68

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levels which were both secular peaks.

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To make it worse, at least for right now,

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we go to the next slide, when you

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rank the equity risk premium based on

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a 6% earnings CAGR

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we are kind of in the top

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5% or bottom 5% of ERPs historically.

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When you look at the forward five-year

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returns that they look like

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they're negative in the blue but that is against the

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average return of 10, 11%.

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What it shows is that at current levels,

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or lower, for the ERP the market

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has never outperformed its trend line

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over the next five years ever, which doesn't

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mean it goes down but it goes up maybe 7% instead

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of 11%.

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This is, of course, part of our narrative for the

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last few years, Pamela, where we've been talking

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about maybe the beta is going to be harder to get and

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maybe we need to get used to lower betas

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the next 5 or 10 years and focus more on

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alpha, which we can get by investing internationally,

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at least in my in my view.

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Now, I'm painting a negative picture and it's not

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as negative as that, and I'll explain why.

[00:18:06.480]

If we go to the next slide, this is my

[00:18:09.520]

DCF grid.

[00:18:12.880]

Again, hard to read but it shows the per

[00:18:16.080]

cent that the S&P is either undervalued

[00:18:19.680]

or overvalued based on what the market

[00:18:22.800]

is expecting from earnings and based on the

[00:18:25.960]

required return that that earnings

[00:18:29.160]

growth rate would spit out based on current

[00:18:32.120]

prices.

[00:18:34.280]

Right now the market is expecting 11 to 12%

[00:18:37.800]

earnings growth. Historically, it's been 6 to

[00:18:40.760]

7. At 6 to 7% the market is

[00:18:43.880]

very expensive because the equity risk premium is only at

[00:18:46.600]

3%. At 11 to 12% the required

[00:18:49.960]

return goes up to about 9% and

[00:18:53.080]

now the risk premium is about 4.5%,

[00:18:56.760]

which is much better and, actually, pretty close to the

[00:18:59.640]

historical average.

[00:19:01.160]

That's a very, very long way of saying

[00:19:04.120]

that if the market is correct that earnings

[00:19:07.480]

are going to grow above trend because of the AI boom

[00:19:10.680]

or the fiscal bill or whatever the reason is

[00:19:14.040]

then the market is not over its skis.

[00:19:16.920]

For that to happen this time has to be different,

[00:19:20.200]

which are very dangerous words to utter in the

[00:19:23.320]

market.

[00:19:25.880]

That's why I did this analysis just to kind of highlight

[00:19:28.360]

what do you need to believe to be bullish here

[00:19:32.040]

and what needs to be different from the overall long

[00:19:35.480]

term history?

[00:19:36.920]

I think this kind of peels that onion a little

[00:19:39.880]

bit.

[00:19:40.480]

I mean, in a so-called industrial revolution, which

[00:19:43.680]

most people think we're in, that would be

[00:19:46.640]

different this time, but I hear what you're saying.

[00:19:49.600]

There's a lot in that.

[00:19:51.400]

It would be different.

[00:19:52.760]

There have been long periods where earnings growth has

[00:19:55.720]

been above the average, I mean, by definition and there's

[00:19:58.680]

been periods where it's been below.

[00:20:00.600]

This may very well be a period where we do

[00:20:03.640]

get double-digit earnings growth.

[00:20:06.120]

In that case the market is valued okay.

[00:20:09.720]

Just to kind of then

[00:20:14.040]

turn the page to non-U.S.

[00:20:15.480]

markets, if we go to the next

[00:20:18.520]

slide, which I think is

[00:20:21.480]

18, if we look at MSCI EAFE, that's the U.S., sorry, the

previous one. Sorry, I mixed up the two slides. This

[00:20:32.040]

is EAFE. You see that it's priced

[00:20:35.320]

for about 8 1/2%

[00:20:38.440]

earnings growth and it's trading at a required return

[00:20:41.640]

of 9.2.

[00:20:43.240]

So 9.2 less the 10-year

[00:20:46.280]

yield, using the U.S.

[00:20:48.120]

one because I'm looking at this from perspective of

[00:20:51.080]

a U.S. investor buying international instead of

[00:20:54.200]

U.S., you're getting an ERP of

[00:20:57.720]

5% at an earnings growth and the market is only pricing

[00:21:01.000]

in an earnings growth of 9 as opposed to

[00:21:04.600]

11 or 12.

[00:21:05.880]

Again, to me, this is an interesting and attractive

[00:21:09.400]

opportunity set because you're getting lower expectations

[00:21:12.680]

and a higher risk premium,

[00:21:15.880]

which I think is is an attractive set-up.

[00:21:20.800]

I mean, are we calling this secular, I guess is one of the

[00:21:23.120]

questions. The international, the EAFE, maybe even

[00:21:26.080]

EM but is this ability to

[00:21:29.040]

sort of barbell yourself into

[00:21:32.000]

global stocks, does it feel secular? 'Cause,

[00:21:35.200]

you know, it's been a great year already.

[00:21:38.400]

Yeah, I think it is secular.

[00:21:41.200]

By the way, just to put icing on the cake, if you go to

[00:21:43.440]

slide 19, I gotta finish the narrative, this is EM.

[00:21:45.480]

Earnings

[00:21:50.640]

estimates are actually about 13% in EM

[00:21:53.680]

but the required return is about 11%, which

[00:21:56.960]

is typical, of course, because EM requires a higher risk

[00:22:00.080]

premium. If we go now to the next

[00:22:03.040]

slide, which is the last one of this colour

[00:22:06.160]

card spectrum, I'm just putting all three

[00:22:09.120]

regions on the U.S.

[00:22:11.120]

matrix, and you can see kind of visually

[00:22:14.160]

where the different regions are priced.

[00:22:17.040]

To your question, not only are

[00:22:20.160]

EAFE and EM attractive

[00:22:23.120]

in terms of the fact that their valuations are lower

[00:22:26.720]

and now their fundamentals are competitive.

[00:22:29.440]

We've talked in the past about the payout growth being

[00:22:32.480]

much higher, of being competitive with the U.S.

[00:22:35.520]

and the payout ratio, at least for EAFE

[00:22:38.640]

being competitive.

[00:22:40.080]

To me, this is a good set-up to also deal

[00:22:43.280]

with concentration risk in the U.S.

[00:22:45.760]

Whether the secular bull market is in the eighth

[00:22:49.040]

inning or whether it has years to go

[00:22:52.240]

that doesn't change the fact that there is a lot of

[00:22:54.640]

concentration risk in the U.S.

[00:22:56.560]

with seven stocks being almost

[00:23:00.000]

40% of the market all tied to a a

[00:23:03.040]

singular theme, which is the AI theme.

[00:23:07.080]

It's been a great theme, the stocks have done amazingly

[00:23:09.560]

well, they're up fourfold in the last three years, but

[00:23:12.920]

it is a risk. If you're taking a broad-based approach

[00:23:15.880]

to investing and you're investing in the

[00:23:18.840]

U.S. stock market and you're doing it on a cap-weighted

[00:23:22.200]

basis you are going to have concentration risk.

[00:23:25.240]

There's gonna be a time someday where those

[00:23:28.360]

seven stocks are not going to lead the market

[00:23:31.320]

and then the market is not going to show a lot of beta

[00:23:34.360]

because those seven stocks are gonna drag it down.

[00:23:37.000]

You could be the best stock picker in the world and have

[00:23:39.480]

all these great stocks but the index may not

[00:23:42.520]

give you much to show for it.

[00:23:44.440]

That's where I think this barbell approach

[00:23:47.480]

of having U.S.

[00:23:48.840]

cap-weighted where you're in the Mag 7 and

[00:23:51.960]

then ex-U.S., whether it's EAFE or

[00:23:55.000]

EM or both, now that those

[00:23:58.280]

regions are competitive in terms of fundamentals

[00:24:01.480]

while having much lower P/Es, to me that's

[00:24:04.520]

a safer bet than needing to

[00:24:07.800]

kind of tinker within the S&P

[00:24:10.840]

and going down cap or doing

[00:24:13.800]

growth versus value because then you have to make binary

[00:24:17.240]

choices where you're gonna be short the Mag 7.

[00:24:20.200]

I don't wanna be short the Mag 7 because they've been great

[00:24:23.080]

winners. Having a global perspective, maybe against

[00:24:26.120]

the global benchmark and having the assets

[00:24:29.240]

more equally distributed I think is is probably

[00:24:32.600]

as good a way that I can think of as

[00:24:35.560]

mitigating concentration risk while getting

[00:24:38.520]

alpha where it can be gotten.

[00:24:40.760]

Do you think there's some some real ...

[00:24:44.120]

if you take it to the policy side of things and look at

[00:24:46.520]

tariffs, the world becoming more competitive,

[00:24:50.280]

can you see a lot of countries perhaps needing

[00:24:53.320]

a few tariffs in a new way to protect

[00:24:56.520]

themselves from real competition around the world?

[00:24:58.920]

I mean, we're talking about it in terms of companies on

[00:25:00.760]

stock markets that are tradable globally but

[00:25:04.120]

there's sort of a reasonable argument, you would

[00:25:07.320]

think, for why you might want to be a little bit more

[00:25:10.120]

protectionist because there are lots of companies doing

[00:25:12.200]

some of the same things that you could buy on different

[00:25:14.920]

stock markets, get your grocery store somewhere else

[00:25:18.040]

rather than the U.S. and stick with the concentration

[00:25:21.000]

in the U.S. for the AI stocks.

[00:25:25.000]

Absolutely. Of course, this is why there's always been

[00:25:28.800]

tariffs. It is countries protecting their

[00:25:31.800]

own industries.

[00:25:34.560]

Europe comes to mind, of course, China comes to mind.

[00:25:39.600]

In this era that is now unfolding

[00:25:43.320]

of deglobalization and a

[00:25:46.440]

more multi-polar world where it's not just the U.S.

[00:25:49.400]

as the benevolent force in the world,

[00:25:52.520]

or maybe not so benevolent force depending on your view,

[00:25:55.600]

but where it is now multiple players, of course,

[00:25:58.800]

namely China, competing

[00:26:01.800]

for economic dominance, for geopolitical dominance,

[00:26:07.720]

it's an arms race for AI as well.

[00:26:11.360]

The U.S. is starting to play that same game.

[00:26:14.320]

The U.S. has always been about free markets,

[00:26:17.560]

although it has protected its industries in the past,

[00:26:20.920]

but we're now getting into a form of state capitalism.

[00:26:23.400]

The U.S.

[00:26:25.360]

government owns shares of Intel because it's a national

[00:26:28.920]

security, or it's deemed to be that.

[00:26:31.480]

In Holland the government took over a

[00:26:34.560]

semiconductor company that had been bought

[00:26:37.560]

by the Chinese and they were worried that there was a

[00:26:40.560]

national security risk there.

[00:26:42.760]

I think you're gonna see more and more of that and it may

[00:26:45.320]

not be in a form of tariffs, it just may be in terms

[00:26:48.520]

of the state champions getting rewarded

[00:26:52.200]

or promoted.

[00:26:54.880]

That can be very good, of course, but it can also lead to

[00:26:57.680]

misallocation of capital over time because

[00:27:01.200]

the free market system is based on the notion

[00:27:04.240]

that free markets are better at picking winners

[00:27:07.440]

and losers than governments.

[00:27:09.280]

You can just look at China at the state-owned

[00:27:12.240]

enterprises which have been terrible businesses for a

[00:27:15.280]

very long time because they were cronies of the

[00:27:18.320]

communist parties running them and they were not very

[00:27:20.800]

efficient. One could argue they were probably corrupt but

[00:27:24.320]

that is the state of of play and and the U.S.

[00:27:26.880]

has joined that. So it could be tariffs, it could

[00:27:29.840]

be some kind of capital restrictions or it

[00:27:32.800]

could just be industries that are protected and

[00:27:35.920]

promoted for security

[00:27:38.960]

reasons.

[00:27:39.960]

It's fascinating.

[00:27:41.960]

I wonder if I can ask you to close out this discussion with

[00:27:44.760]

the Fed decision in December.

[00:27:46.760]

We've actually swung around a lot here but

[00:27:49.880]

it does look directionally like rates are going down.

[00:27:51.800]

Tell us a little bit about your thoughts.

[00:27:54.680]

Slide 9. It's been a little bit of a flip-flop

[00:27:58.280]

where you look at the odds of a Fed cut

[00:28:01.320]

in December.

[00:28:02.600]

They've been going back and forth, back and forth because

[00:28:05.800]

more voices on the Fed have become

[00:28:08.840]

vocal. I do think that the Fed

[00:28:11.800]

is going to stop being the kind of monolithic

[00:28:15.400]

Fed that we're used to under Powell,

[00:28:18.520]

before that Bernanke, Yellen,

[00:28:22.360]

Greenspan, for sure.

[00:28:24.920]

I think as the Fed gets a little bit more politicized,

[00:28:28.440]

and it sounds like Hassett is going to

[00:28:31.400]

get the nod which I think the market is totally fine with.

[00:28:34.200]

He's not like a crazy for the lack

[00:28:37.240]

of a better word.

[00:28:38.680]

You're gonna have a Fed where there are gonna be board

[00:28:41.720]

members on there that are gonna be

[00:28:44.680]

sort of pro the administration and

[00:28:47.720]

then there's going to be board members on the Fed that are

[00:28:50.520]

going to be more traditional status quo, independently

[00:28:53.800]

minded Fed people.

[00:28:55.960]

You could see a Fed that really is more divided where

[00:28:58.920]

you have kind of like a Supreme Court like outcome where

[00:29:01.720]

it's whatever, nine to seven or something like

[00:29:04.840]

that. Right now market is concluding

[00:29:08.280]

based on what John Williams at the New York Fed

[00:29:11.720]

had said that a rate cut is happening.

[00:29:14.520]

If you look at this chart closely you

[00:29:17.560]

can see that there's

[00:29:20.920]

an inflation index called trueflation, which is

[00:29:23.960]

a live, real time daily index.

[00:29:27.400]

You can get it on your Bloomberg.

[00:29:29.640]

The rate of change for that inflation index is

[00:29:34.360]

2.4% year-over-year. It's been really in a sideways

[00:29:37.400]

pattern now for a number of years.

[00:29:40.680]

Between that and the jobs market

[00:29:43.800]

not quite stalling  but certainly not being robust

[00:29:47.160]

you could argue that, okay, neutral,

[00:29:50.280]

I have it kind of closer to 4, the Fed has it closer

[00:29:53.560]

to 3, kind of the Trump people at the

[00:29:56.520]

Fed have it closer to 2.

[00:29:58.360]

But you could argue the Fed can go from 3 7/8 to 3 5/8

[00:30:02.680]

and not really do any damage.

[00:30:04.600]

It's not gonna cause a bear steepening or anything like

[00:30:07.640]

that. I think the Fed, you know,

[00:30:10.680]

I don't see the urgency to do it but I don't see

[00:30:13.640]

any harm in it either.

[00:30:15.160]

I think at this point that's the going rate,

[00:30:18.120]

if you will. More importantly, I'm looking

[00:30:21.240]

for the number of dissents and

[00:30:25.000]

more vocal voices within the Fed

[00:30:28.360]

where it's no longer everyone just kind of

[00:30:31.560]

adhering to whatever the chairman says.

[00:30:34.120]

It's fascinating and changing times there certainly.

[00:30:36.440]

Jurrien Timmer, we're so grateful that on your

[00:30:39.400]

many stops around the world you're still including us.

[00:30:41.400]

Have a great week.

[00:30:43.280]

Thank you. See you back in Boston, or me back in Boston.

[00:30:47.600]

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[00:30:51.520]

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