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Speaker 1: Let's get to our guest and Woody Bahogana ahead of

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Speaker 1: multi asset strategy at Columbia Thread Needle Investments. UM, what

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Speaker 1: do you great to have you on the program? I

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Speaker 1: have to say, with jobs and earnings this strong, it's

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Speaker 1: getting harder to buy into the story that recession is

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Speaker 1: coming anytime soon. And we've seen a big boost in

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Speaker 1: the credit and in the equity markets as a result.

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Speaker 1: At some point here you know you're going to move

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Speaker 1: past the bear market rally story. Where is that point? Brian?

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Speaker 1: Thanks for having me, Yes, I think that's an excellent, UM,

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Speaker 1: really excellent observation. We are seeing really very strong Perrold data,

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Speaker 1: which sort of puts to better recession story at the moment,

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Speaker 1: and at the same time we're also seeing very mixed

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Speaker 1: signals in broad economic data. In other words, we're seeing

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Speaker 1: um housing getting impacted by the right hikes, We're seeing

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Speaker 1: slow down in consumer spending. So the data is really

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Speaker 1: mixed at the moment, but there is no sign of

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Speaker 1: a recession at the markets are wondering if that that

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Speaker 1: story that the first half had dominated right, that we

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Speaker 1: are inspectulation growth slowing down, inflations picking up, if we

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Speaker 1: are now beginning to see sort of the reverse of

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Speaker 1: that environment, where maybe growth won't be negative in the

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Speaker 1: second half of this year. I just want to get

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Speaker 1: a sense of let's try and map by the next

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Speaker 1: let's say eighteen months, if the FED does not reduce

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Speaker 1: rates and keeps rates relatively high, construct that portfolio for us?

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Speaker 1: What what do I need to throw in that basket?

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Speaker 1: That's an interesting question, David. Yes, markets are not thinking

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Speaker 1: that far ahead, are the UM. You know, I think

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Speaker 1: right now the signals from the board market are very different.

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Speaker 1: They're expecting rate cuts next year, right, But the language

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Speaker 1: from the Fed FMC statement at all, that all is

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Speaker 1: indicating that they are likely to stay rate keep rates high,

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Speaker 1: and you know that's having an impact on the housing market.

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Speaker 1: You know, from the perspective of the U S consumer,

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Speaker 1: though I DY would continue to see resiliency, I'm not

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Speaker 1: seeing anything that worries me too much at the moment.

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Speaker 1: The labor market is good. UM. The rates impact is

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Speaker 1: predominantly the new mortgage area. But by and large, most

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Speaker 1: of the consumers don't have adjustable rate mortgages that you know,

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Speaker 1: ninety percent of them have fixed rate mortgages. Here But

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Speaker 1: but but but the question on what The question is

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Speaker 1: what's happening in the housing market. I mean, prices haven't

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Speaker 1: come down that much, but but activity is slowed. The

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Speaker 1: question is whether or not, you know, because that's sensitive

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Speaker 1: to the FED action, whether that leads everything else down.

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Speaker 1: It's a it's a forerunner to what happens later. That's

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Speaker 1: what I'm curious about. Yeah, I think that is a

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Speaker 1: very interesting debate UM, and I don't disagree with you

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Speaker 1: that in the past two recessions or so, the housing

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Speaker 1: has been a precursor to um broader recession in the US.

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Speaker 1: This time around, though, I would say that right now

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Speaker 1: housing is not giving me a recession signal, but housing

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Speaker 1: is just telling me what is the current scenario. In

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Speaker 1: other words, I am not saying scenario. To David's point,

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Speaker 1: right eighteen months out, I think that's not out of

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Speaker 1: the question. Probability eighteen months out is very high, and

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Speaker 1: if you were constructing a portfolio for eighteen months out,

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Speaker 1: I would still be quite cautious. But cyclically, I see

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Speaker 1: a completely different environment in the second half now then

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Speaker 1: where we were in the first half. We're seeing inflation moderating,

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Speaker 1: and to your point, consumer is going to benefit hugely

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Speaker 1: from lower gas prices. Right, So those who are looking

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Speaker 1: to buy a new house, Yes, that's going to impact

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Speaker 1: their um activity, and that will slow down. And you know,

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Speaker 1: house prices base all over in the next eighteen months.

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Speaker 1: But that would be a good thing. They were too high,

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Speaker 1: that would be a good thing. Yes, yes, yes, yes,

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Speaker 1: and and and and you know, constructing a portfolio for

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Speaker 1: eighteen months, I would be cautious. But if I'm constructing

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Speaker 1: a portfolio for the next six months, I think environment

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Speaker 1: quite right for taking some risk, right, Okay, Now, well

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Speaker 1: I guess under that assumption then, assuming things basically don't

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Speaker 1: go off a cliff, I think let's let's let's describe

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Speaker 1: things that way. You know, long long dated yields at

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Speaker 1: three credit investment grade at five to eight percent, those

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Speaker 1: are great yields. What do you think, Yes, those are

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Speaker 1: all that I would load up on the on those

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Speaker 1: days if you were going to hold onto them for

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Speaker 1: a few years and not um trade in and out

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Speaker 1: of them. That's great environment for credit. It's a great

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Speaker 1: environment for how yield, it's a great environment for even treasury.

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Speaker 1: And what do I gotta ask you about Turkey? I mean,

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Speaker 1: this is really kind of shocking. What the experiment that

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Speaker 1: that the president is doing there is sort of taking

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Speaker 1: over the central bank and UM to do this, I

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Speaker 1: mean the currency is getting really hit hard. It's down

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Speaker 1: by a quarter. Does this spread to other e m

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Speaker 1: uh Brian, I think Turkey is its own unique case.

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Speaker 1: That is extremely unusual what they did, given where inflation

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Speaker 1: readings are, so I can imagine why the currency markets

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Speaker 1: are reacting the way they are. UM. I don't see

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Speaker 1: the spreading to the rest of the e M. They

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Speaker 1: are their own unique caves. M. David, Yeah, well, and

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Speaker 1: wit be very very quickly ten seconds or so dollar

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Speaker 1: next six months up or down? I would say, down.

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Speaker 1: All right, Well, great stuff for us in e M here, rightie,

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Speaker 1: thank you so much for joining us. Fantastic insights. We

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Speaker 1: got a lot uh in there and withy Behogan and

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Speaker 1: they're out of Colombia. Thread Needle Investments