Asks about 2026 outlook given unusual 2025 where both equities and bonds performed well, questioning if 'all clear' for 2026.
speaker1
Priya Misra
2026 will be more about labor market than 2025 narratives; Fed's easy rate cuts done, now need to understand labor market dynamics - if firing picks up, Fed cuts more; if low hiring continues, focus shifts to inflation.
Notes garbage data due to government shutdown means flying blind.
speaker1
Priya Misra
Take recent data with pinch of salt due to seasonal adjustments, shutdown, and trade changes. Next Friday's labor report is key first clean read - need to adjust for Powell's 60-70k lower estimate.
Asks about Fed committee friction near neutral rate and what happens to longer end of curve even with two more cuts.
speaker3
Priya Misra
Fed only controls front end; long end about deficit. Don't expect additional fiscal spending. Curve has steepened but don't expect much more steepening.