Questions the downside surprise in jobs report, asking if one-offs make it look worse than it is.
John Ferro
Kevin Hassett
Attributes weak jobs number to crazy February weather, West Coast strikes (30-40k jobs), and a new volatile BLS birth-death model. Calls it a 'wash number' and advises averaging months.
Asks if next month's jobs report will tell a better story, given strong ISM and claims data.
John Ferro
Kevin Hassett
Acknowledges data variability will cause anxiety but believes the jobs number is an outlier, as every other indicator points to very strong GDP growth.
Asks for assessment of Middle East supply disruption and its impact on energy prices and consumer spending.
John Ferro
Kevin Hassett
Long-term view: Expects more stable Venezuela and Iran with high energy output, which will be positive for global markets and risk premia.
Kevin Hassett
Near-term disruption will be resolved by the military 'quite soon'.
Notes production hits and storage breaches, asks what remedies the White House has beyond telling people to wait.
John Ferro
Kevin Hassett
Sanctions waiver is one of many tools ready; has a flowchart of options. Optimistic near-term problem will be resolved quickly.
Asks if there's SPR capacity left to deploy to lower prices.
John Ferro
Kevin Hassett
No conversation to dip into SPR yet; has ~400M barrels ready if needed. Expects Iran effort is 'way ahead of schedule'.
Asks for assurance the disruption won't last for months, noting Iran is not Venezuela.
John Ferro
Kevin Hassett
Explicitly states: 'This is something that will go on for weeks.'
Asks about naval escorts and insurance to get tankers through Strait of Hormuz, given traffic halt.
John Ferro
Kevin Hassett
Military is studying the matter closely; expects progress on a plan for naval escorts, insurance, and destroying Iranian assault capability.
Asks if financial conditions are tightening in unseen ways in private credit markets, and how it's tracked.
John Ferro
Kevin Hassett
Tracking liquid and illiquid markets closely. Sees a very well-functioning market under 'a tiny little bit of stress.' Most firms in good shape aside from one with a significant issue.
Asks how they track, if in touch with big firms, and if certain behaviors (like radical shorting) are concerning.
John Ferro
Kevin Hassett
Radical shorting of distressed assets is a concerning behavior, but they are seeing nothing like the 2008 financial crisis.
Asks if 'dumb things' done in markets pose a systemic risk.
John Ferro
Kevin Hassett
People made bets that didn't pay off, but there's so much security in the private credit space that it can handle the current stress.