RUSH TRANSCRIPT Charles so ░░░░░░░░ s face it Modeling ░░░░░░░░ markets has been challenging ░░░░░░░░ that s an understatement ░░░░░░░░ There is a lot ░░░░░░░░ uncertainty in all of ░░░░░░░░ have different potential outcomes ░░░░░░░░ this about this Modeling ░░░░░░░░ economy is even harder ░░░░░░░░ the Philly fed report ░░░░░░░░ at the end of ░░░░░░░░ chart folks That precipitous ░░░░░░░░ A disaster right We ░░░░░░░░ talking current and future ░░░░░░░░ plummeting and it s ░░░░░░░░ the latest in this ░░░░░░░░ called soft data The ░░░░░░░░ data continues to completely ░░░░░░░░ off a cliff and ░░░░░░░░ data is holding up ░░░░░░░░ look at this gap ░░░░░░░░ yellow is your soft ░░░░░░░░ the blue is hard ░░░░░░░░ and it s just ░░░░░░░░ don t know if ░░░░░░░░ ever been this wide ░░░░░░░░ but Goldman put together ░░░░░░░░ intriguing chart suggesting as ░░░░░░░░ go into a recession ░░░░░░░░ will get in the ░░░░░░░░ line light blue line ░░░░░░░░ soft data going down ░░░░░░░░ and that red line ░░░░░░░░ hard data stays resilient ░░░░░░░░ a moment and then ░░░░░░░░ starts to crack and ░░░░░░░░ is what a big ░░░░░░░░ Will this crack enough ░░░░░░░░ maybe you know actually ░░░░░░░░ us into a recession ░░░░░░░░ s the question I ░░░░░░░░ to bring in now ░░░░░░░░ research CEO Danielle DiMartino ░░░░░░░░ And I mean so ░░░░░░░░ where are you right ░░░░░░░░ reading the tea leaves ░░░░░░░░ recession Charles I think ░░░░░░░░ re going to discover ░░░░░░░░ shortly that the us ░░░░░░░░ has been in recession ░░░░░░░░ know 65 of the ░░░░░░░░ that have reported thus ░░░░░░░░ this earnings season have ░░░░░░░░ on the top line ░░░░░░░░ Charles you know very ░░░░░░░░ because you follow earnings ░░░░░░░░ closely as anybody else ░░░░░░░░ it s easy enough ░░░░░░░░ fudge the bottom line ░░░░░░░░ to do this and ░░░░░░░░ with profits but you ░░░░░░░░ t fake revenues You ░░░░░░░░ t fake sales and ░░░░░░░░ see so many companies ░░░░░░░░ on that top line ░░░░░░░░ indicative of a slowing ░░░░░░░░ We just heard similar ░░░░░░░░ come out of the ░░░░░░░░ Reserve s own beige ░░░░░░░░ Charles by the way ░░░░░░░░ late great Jack well ░░░░░░░░ fantastic at that maneuvering ░░░░░░░░ bottom line but to ░░░░░░░░ point here s the ░░░░░░░░ A lot of smart ░░░░░░░░ so you ve got ░░░░░░░░ camp but the stagflation ░░░░░░░░ is building also This ░░░░░░░░ from apollo and essentially ░░░░░░░░ ve seen the market ░░░░░░░░ down and rates going ░░░░░░░░ Everyone is kind of ░░░░░░░░ in this like no ░░░░░░░░ re in stagflation right ░░░░░░░░ Do you agree Or ░░░░░░░░ we getting there Charles ░░░░░░░░ think we re in ░░░░░░░░ compression right now and ░░░░░░░░ fact in the Fed ░░░░░░░░ beige book it did ░░░░░░░░ that while many districts ░░░░░░░░ to increase prices as ░░░░░░░░ know hope is not ░░░░░░░░ best strategy but a ░░░░░░░░ of other districts were ░░░░░░░░ reporting an inability to ░░░░░░░░ through those higher input ░░░░░░░░ which are absolutely undeniably ░░░░░░░░ shouldered by firms but ░░░░░░░░ inability to pass them ░░░░░░░░ to consumers I think ░░░░░░░░ that s where we ░░░░░░░░ really going to see ░░░░░░░░ lot of tension between ░░░░░░░░ power or lack thereof ░░░░░░░░ there s declining purchasing ░░░░░░░░ Charles I m not ░░░░░░░░ economist but I said ░░░░░░░░ was going to be ░░░░░░░░ problem and that s ░░░░░░░░ I thought the inflation ░░░░░░░░ of the tariff thing ░░░░░░░░ overblown in the recession ░░░░░░░░ was probably the thing ░░░░░░░░ we still the misery ░░░░░░░░ is a de facto ░░░░░░░░ index because you have ░░░░░░░░ and inflation the unemployment ░░░░░░░░ hasn t ticked up ░░░░░░░░ yet The misery part ░░░░░░░░ misery index is really ░░░░░░░░ right now so is ░░░░░░░░ job market going to ░░░░░░░░ in there or do ░░░░░░░░ expect that to start ░░░░░░░░ crumbles Charles one company ░░░░░░░░ another during this earnings ░░░░░░░░ is quietly announcing layoffs ░░░░░░░░ had a colleague of ░░░░░░░░ in the healthcare industry ░░░░░░░░ that right after liberation ░░░░░░░░ that every healthcare company ░░░░░░░░ America quietly let off ░░░░░░░░ 4 of their workforce ░░░░░░░░ we had a big ░░░░░░░░ out of intel last ░░░░░░░░ laying off another 20 ░░░░░░░░ but we re definitely ░░░░░░░░ to see in this ░░░░░░░░ April payrolls report due ░░░░░░░░ a week from Friday ░░░░░░░░ effects at the very ░░░░░░░░ of the federal layoffs ░░░░░░░░ let s talk about ░░░░░░░░ dollar and the end ░░░░░░░░ American exceptionalism I ve ░░░░░░░░ a longer term chart ░░░░░░░░ listen There s the ░░░░░░░░ a lot of dollar ░░░░░░░░ The dxy might be ░░░░░░░░ vulnerable but hasn t ░░░░░░░░ down to points where ░░░░░░░░ should be waving the ░░░░░░░░ flag Is it going ░░░░░░░░ get there Charles that ░░░░░░░░ to be seen We ░░░░░░░░ similar episodes in 2008 ░░░░░░░░ 2020 and we had ░░░░░░░░ similar amount of nervousness ░░░░░░░░ hyperbole and the dollar ░░░░░░░░ back Until and unless ░░░░░░░░ majority of global debt ░░░░░░░░ no longer denominated in ░░░░░░░░ I think that these ░░░░░░░░ of discussions tend to ░░░░░░░░ premature Charles so then ░░░░░░░░ are we heading Because ░░░░░░░░ you look at data ░░░░░░░░ one of the reasons ░░░░░░░░ the best right I ░░░░░░░░ you re the best ░░░░░░░░ you do so much ░░░░░░░░ that is later on ░░░░░░░░ particularly in the data ░░░░░░░░ the Fed uses and ░░░░░░░░ makes you wonder is ░░░░░░░░ Fed I know that ░░░░░░░░ s a sort of ░░░░░░░░ truce now between the ░░░░░░░░ House Powell and Trump ░░░░░░░░ is the Fed making ░░░░░░░░ mistake do you believe ░░░░░░░░ there should be reasons ░░░░░░░░ all of us to ░░░░░░░░ frustrated with Jay Powell ░░░░░░░░ the Fed I do ░░░░░░░░ that the Fed is ░░░░░░░░ a policy error if ░░░░░░░░ do not lower interest ░░░░░░░░ at this upcoming may ░░░░░░░░ Echoing not doing so ░░░░░░░░ July and having to ░░░░░░░░ forward in September with ░░░░░░░░ 50 basis point half ░░░░░░░░ percentage point cut to ░░░░░░░░ rates because they are ░░░░░░░░ a game of catch ░░░░░░░░ The evidence is absolutely ░░░░░░░░ in the Federal Reserve ░░░░░░░░ own surveys Yes they ░░░░░░░░ be soft survey data ░░░░░░░░ it began this segment ░░░░░░░░ but the hard data ░░░░░░░░ catch up and that ░░░░░░░░ exactly what one district ░░░░░░░░ another has said with ░░░░░░░░ the way business investment ░░░░░░░░ the declines and business ░░░░░░░░ Charles has always led ░░░░░░░░ U S economy into ░░░░░░░░ out of recession Charles ░░░░░░░░ great stuff appreciate you ░░░░░░░░ you Thank you Charles ░░░░░░░░ talk soon.