00:00Can we deal with the front end and then get to further out along the curve on the two bets
00:03we
00:03were talking about? One, they've got to do more. Two, it won't work. On the first one, how much
00:08more? How much higher do two-year yields need to reprice? Because we've already got a very
00:11comfortable spread and have done for quite a while now, a very comfortable spread between the
00:15front end and the policy rate of the Fed. How much work is there left to do with the front
00:19end of the
00:19curve? You know, the market is very aggressively priced for nearly about, say, three and a half
00:25to four hikes over the next year. To me, that seems like it's a little bit much. I feel like
00:29the Fed might not actually follow through and deliver that many hikes. But the market's pushing.
00:35The market's kind of pushing the limits to seeing what actually they can price in before something
00:40breaks. And you're seeing that the equity market is still relatively resilient. You're not really
00:46seeing financial conditions tighten in any meaningful way. If you, in fact, look at the
00:51one-year, one-year OIS, which is what I look at versus where financial conditions are. Financial
00:55conditions are still relatively easy, even though the market's pricing in a very aggressive path
00:59of tightening. It sounds like you're a little bit more sceptical about pricing at the front end
01:03than you are at the long end. How much scope is there still for repricing to the upside at the
01:08long
01:08end of the curve for you and the team? You know, we could, we've already seen a pretty decent run
01:14-up
01:14in long-end yields. To us, it's a global bond market. I think that my colleagues in Europe feel like
01:22there's a little bit more room for term premiere to continue to build. You also have a little bit of
01:27sort of political unrest, if you will, because you have the midterm elections in the US. You
01:33have elections in France and Germany and Brazil. All of that could be something that is going
01:40to be a term premiere adding event. So I think you're going to see a lot more volatility in
01:46the very long end before this all ends.
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