Asks Rieder to interpret the weak jobs report and reconcile strong GDP with lack of job growth.
Matt
Rick Rieder
The economy is doing fine, growing 2.5-3% in Q1, but the labor market is weak outside healthcare. Last nine months show negative job growth excluding healthcare.
Notes the contradiction: jobs are not the economy, which is concerning for Main Street.
Matt
Rick Rieder
Affirms the bifurcation problem. Policy initiatives on affordability and getting mortgage rates down are needed to help labor mobility and housing.
Asks about the move in real yields versus breakevens.
Matt
Rick Rieder
Real rates are attractive. Productivity will bring down wage pressure and inflation after the energy shock. We are moving to a different place with lower nominal and real rates.
Asks how we can have strong GDP growth without adding jobs, referencing 'ghost GDP'.
Matt
Rick Rieder
Productivity enhancements from AI and capex are unequivocal. Labor-intensive initiatives in real estate, manufacturing, and chip development must happen to stabilize conditions for workers.
Asks about the impact of rising oil prices on US growth, referencing Bruce Richards' thresholds.
Matt
Rick Rieder
A supply shock unambiguously slows growth. We are a service economy, so the impact is less severe than in the past. The Fed should cut rates, not raise them, to combat this stagflationary shock, but they will likely wait.
Asks how Rieder is positioning his fixed income portfolio given the shock and uncertainty.
Matt
Rick Rieder
Pulling down higher beta income, reducing credit and interest rate exposure, hunkering down. Looking for opportunities in securitization and EM markets on the other side, but being patient and tactical.