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Speaker 1: Let's get to our guest, Carol Schlife is with us.

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Speaker 1: She is the Deputy c i O at b m

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Speaker 1: O Family Office. She's on the line from Minneapolis. Always

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Speaker 1: a pleasure, Carol, thanks for making time for us. I'm

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Speaker 1: looking at the chart, and normally when we do a

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Speaker 1: radio program, charts are not really useful. It's a theater

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Speaker 1: of the mind. I get that. Let me use the

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Speaker 1: image of a helium balloon. So we've hit the ceiling

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Speaker 1: right now. That balloon has hit the ceiling at the

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Speaker 1: two hundred day moving average for the last couple of

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Speaker 1: days right now, so we've we've met with a little

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Speaker 1: bit of resistance. And I'm wondering whether you think that

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Speaker 1: the equity market is overbought right now. I'm not sure

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Speaker 1: it's necessarily overbought, but we do feel like we're range

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Speaker 1: found in here because there's a lot of a lot

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Speaker 1: of conflicting data from earnings, from economics, from a lot

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Speaker 1: of other things going on. There's just we see little

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Speaker 1: compelling evidence to argue for a breakout to the upside

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Speaker 1: or the downside. And really do feel like we're range bound,

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Speaker 1: especially as we continue to go through and watch the

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Speaker 1: day to come in between now and when the FED

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Speaker 1: next meets in September. Yeah, even those five minutes seemed

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Speaker 1: like a long exercise and cautious equivitation. Do you expect

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Speaker 1: to hear anything concrete about the path of right and

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Speaker 1: increases when we get to Jackson Hall next week? I

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Speaker 1: think we possibly could. And we do tend to think

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Speaker 1: that the markets are making light, if you will, of

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Speaker 1: FED speak, because if that, it has been pretty unequivocal

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Speaker 1: actually in in taking its hawkish tone from when it

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Speaker 1: shifted in January, and they were very vociferous about shifting

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Speaker 1: from getting the economy back to full employment to saying

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Speaker 1: inflation is is the watch word, if you will, And

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Speaker 1: the fact that they've invoked Boker many times would also

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Speaker 1: give your indication that they're not going to back away

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Speaker 1: from from trying to get inflation back down towards their

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Speaker 1: very long term goal of two percent. And so for

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Speaker 1: them to back down when inflation is still running at

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Speaker 1: eight and a half percent, I think is is um

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Speaker 1: not too wise to focus on that that too much.

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Speaker 1: So we do think that you'll get some indication or

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Speaker 1: some reiteration of that hawkish policy most likely, So, Carol,

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Speaker 1: do we dismiss the notion of the possibility of a

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Speaker 1: soft landing and just resign ourselves to recession. I mean,

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Speaker 1: that's what the bond market is saying. Do we buy

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Speaker 1: into that. I don't necessarily think so, because I think

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Speaker 1: you've got enough strength coming out of the labor market.

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Speaker 1: So I think it's really important to watch those unemployment

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Speaker 1: clamps and the fact that they came in right at

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Speaker 1: the two fifty level this week seems to be pretty positive.

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Speaker 1: And we don't think that the FET is necessarily going

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Speaker 1: to back off unless they start seeing those claims rise

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Speaker 1: that they're willing to take a little bit of pain.

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Speaker 1: We suspect in the housing market and and the rest

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Speaker 1: of the economy because we do have to slope things up.

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Speaker 1: We have to pull it off the rapid boil and

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Speaker 1: maybe move it to a simmer. But as long as

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Speaker 1: the employment levels stay pretty healthy, we the FED has

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Speaker 1: a chance of sticking a soft landing in here. How

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Speaker 1: long do you think it will be before we get

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Speaker 1: to that inflation target? We went up pretty fast. How

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Speaker 1: long does it take to come down? We did go

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Speaker 1: up pretty fast, and I don't think the Federals stay

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Speaker 1: wedded to that. It has to be two percent before

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Speaker 1: they stopped raising, but they want to see some leveling

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Speaker 1: in it. And the signs are positive in terms of

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Speaker 1: if you can keep employment pretty healthy, and you are,

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Speaker 1: you do have signs in in that market that even

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Speaker 1: the boil is off in the employment market. Is a

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Speaker 1: number of employers are saying that they've frozen open requisitions,

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Speaker 1: they're taking a little more time to hire, their being cautious,

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Speaker 1: and certain industries are laying off. And Carol, I just

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Speaker 1: want to get your thoughts on the p w C

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Speaker 1: survey that's just not just a some arise a pulsive

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Speaker 1: and under dus executives. Half of the respondents say they're

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Speaker 1: going to reduce headcount or planning to, and half of

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Speaker 1: also implemented hiring freezes. Are we seeing the peak of

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Speaker 1: the jobs market? Is this as time as it gets? Yeah,

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Speaker 1: I definitely think there were some nuggets in that survey

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Speaker 1: and some of the other things that you've seen where

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Speaker 1: people are talking about removing hiring bonuses and so again

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Speaker 1: to use enough to I did earlier, it's like we're

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Speaker 1: off the rapid boil and maybe down to a simmer

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Speaker 1: and the economy and and that's exactly what the FED

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Speaker 1: hoping for is just to bring the cool things down

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Speaker 1: a bit so we can let that inflation level often

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Speaker 1: and some of the price decreases work their way through

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Speaker 1: the system. Although price decreases the wrong word, because a

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Speaker 1: lot of this stuff is yendemic. It's going to be

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Speaker 1: tough to get it out of the system now that

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Speaker 1: it's there. We're not going to pull wages back, We're

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Speaker 1: not going to pull rents back for a while. So

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Speaker 1: there's there's some level that's going to be really stick key.

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Speaker 1: But it helps at the margin not having that frenzy

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Speaker 1: to you know that you had in the housing market,

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Speaker 1: not having the frenzy quite as much that you had

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Speaker 1: in in the employment market, and that will cause a

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Speaker 1: little more caution among consumers as well, which you're already

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Speaker 1: seeing in from So when you passed through the earnings

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Speaker 1: reports of some of the specific retailers there, there was

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Speaker 1: definite indication of consumer angst. Yeah, and maybe some mismanagement

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Speaker 1: on the buy side for some of those retailers, right,

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Speaker 1: I mean, maybe they didn't really anticipate the pivot on

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Speaker 1: the part of the American consumer supply chains seemed to

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Speaker 1: be relaxing a little bit. I mean, I don't think

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Speaker 1: there's as much concern these days. This is anecdotal when

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Speaker 1: it comes to the semiconductor story, and crude oil has

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Speaker 1: come down, so that should in and of itself provide

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Speaker 1: a little bit of relief. Where are you right now, Carol,

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Speaker 1: with putting money to work in Asia, particularly China, We're

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Speaker 1: actually focusing more domestically, if you will, because we do

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Speaker 1: think there is potential, especially when you look at what's

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Speaker 1: going on with Taiwan and China and all of the

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Speaker 1: angst and the in the ocean around there, and some

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Speaker 1: of the supply chain issues going on that they've relaxed

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Speaker 1: some and supplies are getting through, but there there's a

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Speaker 1: tenuous nature to it, if you will, and that there's

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Speaker 1: the potential for disrupt continued disruption, but from a different angle,

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Speaker 1: if you will. So we're continuing to focus on UM

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Speaker 1: basically in overall neutral weight on equities with the focus

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Speaker 1: on the United States still just given a lot of

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Speaker 1: the global issues going on, we were not non weighted.

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Speaker 1: We've got underweights to both emerging markets and developed markets

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Speaker 1: up by the US. Do I have to take the

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Speaker 1: sense of risk aversion as your preference for safety right now. Yeah,

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Speaker 1: I think our preferences for good diversification and some assets

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Speaker 1: that are counter correlated. We do have some real estate

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Speaker 1: and commodities and portfolios. We're looking at things like structured

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Speaker 1: notes and um, just a variety of other ways to

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Speaker 1: be not super defensive. But we're in the business of

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Speaker 1: protecting capital. We've got a lot of clients that have

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Speaker 1: spent a lifetime building or many lifetimes building businesses, and

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Speaker 1: we're in the business of making sure that that capital

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Speaker 1: stays as secure as possible in pretty volatile times. UM.

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Speaker 1: We we do have two holds there, just because you

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Speaker 1: don't know when enough of its priced in. But we're

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Speaker 1: just not sure that enough of it is priced in

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Speaker 1: at this point. So you're in Minneapolis, you're not that

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Speaker 1: far away from the farm belt. Tomorrow, we're going to

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Speaker 1: hear from Deer in Company, and I think there's an

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Speaker 1: eagerness to see how well Dear, which happens to be

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Speaker 1: the biggest maker of agricultural machinery, is managing this environment

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Speaker 1: rising cost, supply chain issues. Where are you with a

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Speaker 1: company like Deer very quickly in about thirty seconds. Well,

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Speaker 1: I can't maintain specific companies, but We're the home to

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Speaker 1: many of the largest retailer's food companies were hotbed up

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Speaker 1: here for a lot of different things. But we think,

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Speaker 1: you know, the farm farm belt has has some issues,

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Speaker 1: particularly from weather, but a lot of the retailers, the

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Speaker 1: medical products things, things are doing pretty decently over overall.

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Speaker 1: But it is really company specific and it's hard to

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Speaker 1: pick a whole entire industry al right, Carol Shlife, Dept.

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Speaker 1: C i O at BMO Family Office, Thanks so much

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Speaker 1: for joining us on bloom Big Daybreak Asia