00:00 Speaker A
Treasuries that are sold a bit today, because the last job report requires the case for the FED to keep the rates stable. But the labor market shows signs of gradual moderation, when can we expect to see those cuts of the Fed? Brian Jacobson, the most important economist of Brian Jacobson, annexe economist of Wealth Management. We also have strategist, Omar Aguilar. He is CEO of Schwab Asset Management and CIO. Thank you for being here with us this morning. Brian, I want to start with you. Talk to me about your read about the labor data and how you are currently in your kind of prediction for the economy for the economy and where we are.
00:52 Brian Jacobson
Certainly. Yes. Thank you for having me. So here at Annex in our investment committee, when we look at the data, we really think that it really supports the idea that the economy is resilient enough to in fact bypass a recession this year. We have delayed a little in wage growth earlier this week. There was a little more fear because of the contents of the beige book, the ISM production and service indices, the ADP numbers. All those point to a kind of almost just like kind of gap of the labor market, but it is not bad enough where it seems like we are going to match a recession. So from the perspective of Big Macro, we think it supports the idea that we will experience some delay, but not stop the overall economy, and that should be a bullish indicator for income based on income.
02:10 Speaker A
Omar, do you want to get your take and your lecture, your chance of recession and what that translates into a portfolio strategy?
02:22 Omar Aguilar
Yes. Well, the recession risk, you know, has come down considerably since April. I think we, we, were at the high level of risk voltage of recession at that time mainly because of the reflection of the uncertainty and and the numbers we saw in terms of potential inflation implications. Eh I find it interesting to see only the figures of the labor market today, because it knows, you know that the growth on the labor market is delayed. You know that having said, you know, we also see a significant reduction in the UH in the size of the labor market. Only much of that reflective immigration policy, you know, that came with around 600,000. UM so the general rate has fallen. So what that translates is, you know, it is probably neutral for the Fed in the field of decision -making. And what that means is, you know, we probably still think at the beginning of September as the earliest for them to make the first reduction, because this Labor report reports, although it does show signs of softening, you know, it does not necessarily translate a reduction in inflation numbers.
