Lack of near-term labor data doesn't change Fed calculus much; they are on an extended pause. Markets not pricing rate cuts until mid-year.

US economy defined by resilience: tax rebates will bolster consumer spending, AI capex added 0.5% to growth last year and will contribute similarly this year. Economy running above potential, adding upside inflation risk, but still in a sweet spot supporting risk sentiment.

AI spend funded through operating cash flow, not debt. Leverage increasing but from profitable companies. Earnings disappointments would lead to idiosyncratic price action, but tech leadership in earnings expected to persist, though advantage will narrow, leading to broadening bull market.

Constructive global backdrop supports diversification. Attractive opportunities in EM debt, with sentiment picking up and $6B+ inflows YTD supported by attractive carry and constructive growth.

Markets saw reprieve with Warsh appointment, but ambiguity remains given his historical hawkish tilt versus recent dovish alignment. Leaning into curve steepening on potential balance sheet restraint and fiscal dynamics.