The bond market in Kevin Warsh. Good job, bad job so far, you know, it's only been, what's he been? two months or three months he's been in that position?

Give me your sense. I I like Kevin Warsh. Give me your sense of what you think.

Yeah, I like him too. I think I think it's decent. I think the reality is we will as far as rates are concerned, I think we'll probably remain unchanged for the rest rest of the year.

Um, I think it's interesting that money markets now after you take out taxes, the net return is not beating inflation. Right?

Right? So, I think that for that reason investors are well served in trying to lock in high yields by going for bonds. So, I think I think overall it's a decent job. Fed will probably stay put for the rest of the year.

Is now the time to fall in love with bonds?

I don't know fall in love with them right now, partly because I think globally there is this spending going on as people do defense spending, energy spending, the hyperscalers. So I I think there's a overall pressure on yields. So I think it's going to be difficult to see the long-dated bonds come screaming tighter.

On the other hand, I think you're getting paid for some of that. I think you're getting paid for some of the spread risk you're taking in those. I actually like uh GPZ which is or GPZ, I guess, um which is a um ETF that has a bunch of the alternative asset managers on the equity side. It got hammered pretty badly when everyone was scared about private credit. I think that could come back.

And having said all this, I think the single most important thing Wars has done so far is create this data task force. And so I'll even challenge the one thing that you said is when you said it's not being inflation. depends what metric of inflation you're looking at. If you look at truelation,

it's doing better than Tru. So I think we are stuck looking at CPI. I think CPI has all sorts of issues with how it's done, how it's calculated. Owner's equivalent rent might be the dumbest thing ever. Cuz at one point, yes, people rented single-handedly homes, but we pull 1/10th of them and we guess what someone would rent my home for. That seems no way when you got Zillow real time. I think they're going to find alternative sources and what they will show almost everything that I look at that I trust,

2020 and 2021, the official CPI and BLS data, heavily understated inflation, and now it's overstating as it's catching up. So I think we have an affordability problem more than an inflation. and a big part of that is our data did not work well. We're making bad decisions based on bad data. I think Wars is going to get people to start thinking about inflation differently, looking at real-time rents, looking at these things. and guess what, the story is nowhere near as scary. and that actually matches my personal experience.

2020, you know, when we were saying we were at 6%, everything was going up 20%. Now they're saying it's up 3%. I don't see that. So I think we're mismeasuring and making decisions based on that and Wars is going to change that.

I I think, sorry, I think I think one thing that which I agree with Boris on is that AI productivity is going to bring prices down. Right? That is going to be deflationary and we spoke about John Deere, right? So these are the things that we'll probably see which will actually be helpful. and it takes a little bit of time for those things to play out, right? It's it's it's the second and the third phase. and that'll be interesting to see how that plays

out.

And inflation was coming down, coming into the start of the war, started coming back down the second we had the MOU in place. I think it starts coming down again. It's the economy's away from the AI spend, it's just not that robust and I think we're priced in the AI spend. So I think there's this ability to see some deflation.

Well, yes, far less inflation. Yes.

But if energy, if this geopolitical situation in the Middle East continues and energy shoots higher from here, then that's going to be kind of, you know, that's going to be the black swan, right? That's going to be the one that gets in the way of that argument.

Right. That's the one that gets in the way of everything, I think.