Data and the Fed's reaction function drive the call: labor market remains tight (unemployment unchanged year-on-year) and core PCE inflation is still materially above a year ago, so last year’s risk-management rate cuts should be reversed. Supply-driven inflationary pressures (deglobalization, near-shoring, repeated supply shocks) make underlying inflation stickier, which justifies a more hawkish Fed and higher yields. Consumer spending strength reduces downside risk to activity. Equities concentrated in AI beneficiaries can still perform even with additional hikes; fixed income should favor less duration and higher-quality credit. AI will change job tasks more than eliminate jobs outright, but transition speed matters for policy and labor markets.