What is the adjustment that is needed From these Equity markets to the higher Rate scenario that's coming through from The ECB have Equity markets properly Adjusted to this new reality well what's Been so interesting about the European Market reaction is actually a lot of the Movers come in the terms of of nominal Yields and not so much real yields so a Lot of it is is inflation compensations Rising and so that's not necessarily Super negative for European equities so Until we see the real yield picture Start to change European equities can Maybe hang in there We've seen the real yield picture change Here at least that's what Jerome Powell Points to when he says financial Conditions has tightened of course the Rest of the Wall Street is like what Financial conditions are really very Loose by our measures what do you think Of the fed's path to beating inflation And are they going to have similar Problems Well what's really key to me about the FED at this juncture is that they're Committed to sticking with 25 basis Point hikes and that's a huge shift from Last year when they were going in 50 and 75 basis in point increments so if you See a little bit of a re-acceleration And activity here even if you're still The view that a recession is coming in
The second half of the year which we are If the Fed is not going to lean against That acceleration and activity that can I think help risk stay supported for the Next little while here very different Story in the second half if we see the Growth environment start to turn Negative but for right now we can be a Little more constructive in the risk Environment
