Who is Wronger?

[00:00:02] Speaker A: That wasn't quite fast enough. Good to see you, man. Welcome back to intelligent investment live. July 18, 2025. I just asked you what the date. [00:00:14] Speaker B: Was because I needed to put it. [00:00:15] Speaker A: In the video there and I thought it was July 13th. So it has been a heck of a week apparently, but I have lost track of like five days. But good to see you again, man. [00:00:22] Speaker C: I think you asked me and I said it was the 19th, so you did. [00:00:25] Speaker A: You were wrong. I assumed we were both wrong, so I went ahead and cross checked the calendar to make sure because I happen to notice our last video was, let's say that would be the 11th. And I realized that unless one of them was a Thursday or today was Saturday, it was not the 19th. So anyway, good to see you again. Sorry, my background is, is not working. This, this could be a very technically challenging show. It's one of those things where I've got a maintenance person coming by and they give you like a four hour window and you never know when it's going to be. So I may have somebody pop in mid show. My background's not working. This could be a total disaster. So buckle up and let's have fun. [00:01:03] Speaker C: We can't even get the day right, much less try to help people figure out what the economy and markets are going to do. [00:01:08] Speaker A: That's not a good start if we don't even know what day it is. I don't know how much credibility we have around here, but you know what? We have a little data, a little knowledge and a whole lot of objective optimism so we can figure out how to make something of that from there. So you asked the question before we went live there, I tried my best to hit. You were, you were doing your hair and I was trying my best to get the live button working so we could catch capture that, but didn't get there fast enough. But you posed the question, who do you think is right and who do you think is wrong between Fed Chair Powell and President Trump? And I have a feeling you have an interesting answer to that question. [00:01:50] Speaker C: I haven't thought about it at all. I haven't. [00:01:54] Speaker A: That sounds about right. [00:01:54] Speaker C: Yeah, well, let's, I mean, let's, let's, let's define what each one of them's position is. [00:02:00] Speaker D: Okay. [00:02:01] Speaker C: Before we say who's right and who's wrong, Powell is taking a very, let's just put it, say it nicely, controlled approach to this whole thing. Waiting for more clarity on tariffs, waiting for more clarity on inflation caused by tariffs. Waiting, waiting, waiting and waiting. And Waiting for more clarity or more data, for more signal before they feel like they can make a move, an adjustment to policy rate, because there's just too much uncertainty. [00:02:34] Speaker D: Okay? [00:02:36] Speaker C: Now, Trump says the. The rate. The policy rate should be down 3% from where it is, 3%. So we have an upper bound of 4.5. Right now. He believes it should be 1.5. That's what he said. [00:02:51] Speaker D: Okay? [00:02:52] Speaker C: Now, if you look at the inflationary numbers, the signal, if you take the last five months. Five months, and you annualize them out, it's 1.6% what it is, it's really low. [00:03:02] Speaker D: Okay? [00:03:03] Speaker C: So the math works in Trump's favor based on the last five months annualized out. And to be fair to him, to Trump, Hal has said on multiple occasions that they take signal from three months of this directionally the same data. [00:03:19] Speaker D: Okay? [00:03:20] Speaker C: So we have five months of directionally the same data. Yet we're still waiting. Okay, now, why is Powell wrong or why is Trump wrong? Who is wrong? Okay, well, that's. That's a matter of, I think of opinion, okay? Which I guess that's what we do here, is we provide opinion, okay? So our opinion is they're both wrong, okay? But in our opinion. [00:03:46] Speaker A: In our opinion, since it's our show, is the right one. That was a Steve Harvey quote. Did you ever hear that one time? [00:03:52] Speaker C: No. [00:03:53] Speaker A: Steve Harvey had a. When he had his talk show, he was having a conversation with someone, he said, oh, no, no, this is just my opinion, but my opinion is the right one because I have a show and you don't. When somebody asks for your opinion on your own show, you can have yours can be right, but on my show, it's always right. So our opinion. [00:04:08] Speaker C: Our opinion. Our opinion on this show is the right. Is the right opinion, right? So now who's. Who's righter and who's wronger? I would. [00:04:19] Speaker A: We do math here, not English. We are good at math, not English. [00:04:22] Speaker C: Who's. Who's righter and who's wronger? [00:04:24] Speaker D: Okay? [00:04:25] Speaker C: I think Trump is righter and Powell is wronger, okay? To be fair. So who's less wrong? I believe it to be Trump, okay? Because directionally, he is correct. [00:04:38] Speaker D: Okay? [00:04:38] Speaker C: And Powell, I believe, is starting to get dangerously close to the shores of Lake Uncredible, okay? Like, he's there. Like he's. He's dipping his toe in the water and he's putting his little wetsuit on, and he's gonna go for a swim really quick, okay? Because what did we hear all through 2021, inflation's transitory. Inflation's trans. Story. Inflation's transitory when it kept going up and up and up and up and up. And then they had to, in case of emergency, break glass and start raising rates at the fastest pace in history. We've been through this now what are we hearing? It's a different word, but it's the same. It's the same inflection. Uncertainty around tariffs, uncertainty around tariffs, uncertainty around tariffs, uncertainty around tariffs. Well, that's been in the lexicon now for effectively six months. [00:05:30] Speaker D: Okay. [00:05:31] Speaker C: They have been applied now for effectively three months. [00:05:34] Speaker D: Okay. [00:05:35] Speaker C: There's no inflation. There's not. [00:05:37] Speaker D: Okay. [00:05:38] Speaker C: Core inflation came in month over month at 0.23. [00:05:41] Speaker D: Okay, guess. [00:05:43] Speaker C: But we know that PPI, which is your producer price index, which is, I think, where we would see tariff inflation really manifest itself first. Right. It's nowhere that came out the day after at absolutely zero. No inflation month over month, which tells us there's not going. There shouldn't be any inflation. True inflation in CPI coming about in the next following subsequent months. Unless you're getting greedflation, which is companies saying, oh well, people are scared of inflation, so they're already ready, have prices be higher. So we're just going to raise prices even though we didn't pay more for. Okay, so outside of that, outside, that. [00:06:26] Speaker A: Seems to be what happened 2021, 2022. That wasn't so much that. Because, I mean, margins were fantastic at that time for companies because their prices weren't going up, but they sure were jacking up the prices on consumer. [00:06:39] Speaker C: Right, exactly. So we haven't seen it. We haven't seen it. It's nowhere. Chris Waller came out today again and is making the case that we need to start cutting rates now because we have a. There's a window. There's a window to get this rate down before it starts causing pain. [00:06:59] Speaker D: Okay. [00:07:00] Speaker C: And you fix the roof when the sun is shining. [00:07:03] Speaker D: Okay, but. [00:07:04] Speaker C: And at some point, I guess cutting policy rate is like having a baby. When is it ever a good time to have a baby? When is it ever a good time to cut policy rate? I don't know. You're never going to get. Claire. There's never going to be clarity. There's never going to be no uncertainty. There's always going to be uncertainties. That's why we have the Fed. That's why we have the data. And you infer from that data and you make your best choice. And the other thing is the Fed has the ability, is empowered to change. They can change their mind. They can lower policy rate. They can take the next three meetings and lower policy rate 50 basis points at a whack. Get it down half of what Trump's saying, get it down to 3% on the upper, which I think is probably where it should be. Okay? And then let it, let it go. See what happens. Give it, give it six months. If we start to see inflation creeping back in because policy rates too low, housing starts, pops, commodities start to inflate, okay, well, they can start gradually increasing. There's, there's, there's, there's no right or wrong to this. It's just, what do we have now? What set of ingredients do we have now? So what cake are we going to try to bake? [00:08:16] Speaker D: Right. [00:08:16] Speaker C: What they're trying to do is they're trying to, they're trying to create a, they're, they're looking for a very specific scenario in which to do a very specific thing. And it's, it shouldn't be like that there. It's just the economy and prices are moving. It's a fluid thing, and they need to be more fluid. They need to understand, and I'm sure they do at some level, that they're not going to get that ultimate clarity that they're looking for. I mean, think, I would think after five months, after all of the tariff talk and all of the tariff application, there's still no inflation, that they, that they should be able to lower rates by 25. We're talking 25 basis points. Okay, 25 basis points. Is that going to really affect anything? No, it's not going to affect anything. 25 basis points. If they cut 50 basis points, it really wouldn't affect anything. Okay, so that's where I think, that's where I think Powell is wronger, because he's not willing, he's not willing to take his own advice. [00:09:20] Speaker D: Right? [00:09:20] Speaker C: You've got signal, you've got, by your own definition, almost two full quarters of signal. [00:09:28] Speaker D: Okay? [00:09:28] Speaker C: But you're only requiring one. And there you go. And you're still not willing to cut rates. So, so what, what new goalpost is there that you have to get through to get this policy rate down? Now, let's talk about why. Talk about why. Trump is wrong, but I believe less wrong. [00:09:45] Speaker D: Okay? [00:09:47] Speaker C: He's, and I'm only saying this, I'm not saying directionally he's correct. Trump's magnitude, I think, is too far. [00:09:54] Speaker A: He's right or he's not. He's, he's not right, but he's right. He's right, er, to use your, your English, he's right of the pal. [00:10:03] Speaker C: He's, he's less, he's less wronger. [00:10:05] Speaker A: He's right. [00:10:07] Speaker C: He's less wrong. [00:10:08] Speaker A: You just use a triple negative. [00:10:10] Speaker C: Yeah, he's, he's way more or less wronger. He's super duper. Way more or less wronger. [00:10:17] Speaker D: So. [00:10:20] Speaker C: At his 3, the rate needs to be down by 3%. Okay. And to be. Mathematically, if you look at where inflation is, that's about the right number. However, I am a proponent of the Fed having bullets in the chamber. [00:10:35] Speaker D: Okay. [00:10:36] Speaker C: So if we cut that rate to one and a half, let's just say, bam, it's one and a half. And we have, we start seeing slowing the economy, we start seeing banks not wanting to lend, we start seeing demand issues here and there. Okay, well, now we don't have the monetary tools that we would have at call it 3% on a policy rate. We have a lot, we have a lot more Runway to ease monetary policy and accommodate and do economic accommodation at 3 to 3 and a half percent than we do at 1% or 1 and a half percent. Right. Yeah. You can do QE and you can go back into the bond market, start buying bonds, buying mortgage bonds, buying. I think in Covid, they were actually buying commercial bonds. They're buying corporate bonds. [00:11:21] Speaker D: Okay. [00:11:22] Speaker C: There are those tools as well, but I am. But I think it's important that the Fed maintains, you know, arrows in the quiver when they need it. So Trump is correct. Rate needs to come down by 3%, actually is probably a good number if you look at just the inflation number. But there is a level of uncertainty surrounding tariffs, surrounding deregulation, surrounding what's happening with a growing economy. We want to make sure that we're not stimulating it too much too fast. [00:11:58] Speaker A: You said rates should be down. You said by 3% or to 3%? 2. [00:12:04] Speaker C: 3%. [00:12:05] Speaker A: They need to get down to 3%. And so you're still. I'm looking at the count here. So Fed, the Fed meeting is the 30th of the month, is that right? [00:12:14] Speaker C: 30Th. Correct. So we get to next. [00:12:16] Speaker A: So what are you. I mean, I don't have to ask. Do you, do you think they should cut, but has. What do you think the likelihood is that they cut? Because you don't sound, you don't seem to think that they get it. [00:12:31] Speaker C: You know, you're right, I don't. And I'm willing to, I'm willing to eat a little crow on that one. Because as you know, I've been a big, A big fan of this Fed. I thought they did. Although I believe they were part and parcel to creating the inflation problem because they were transitory, Transitory, transitory, transitory, till we were all blue in the face and then they had to, you know, raise interest rates that keep us from, you know, paying $17 for a, you know, a Q tip. [00:12:59] Speaker A: They did a great job of cleaning up their mess, though. That's basically what you're saying. Yeah, they did. [00:13:05] Speaker C: And, and of course, I went into it with. Well, they've likely learned their lesson now. They've likely learned their lesson. When you wait, you, if you're too late to the game, you'll cause a much bigger problem and you'll cause a lot more economic and stock market indigestion than needs to be. Than there needs to be. [00:13:24] Speaker A: You thought someone in government learned their lesson. That might be the dumbest thing I have ever heard anyone on this show say. [00:13:31] Speaker D: Probably. [00:13:32] Speaker C: That's probably the dumbest thing. You know, I mean, I was telling the, I was telling the team the other day, I was like, you know, they got 400 PhDs there. 400 PhDs, okay? I would think they would know that all these people going through all this schooling for all these years and all this, you know, scientific approaches that, you know, getting it wrong is part of the process. It's part of the scientific process, okay? But they're, they're dealing with something that is as much of an art as it is a science. And I think they're looking at it as the. Well, we're scientists and we believe, you know, X plus Y equals Z, and that's how the economy works. It doesn't work like that, you know, because who participates in the economy? Dopes like me, right? And sometimes I make decisions that don't make sense, but that affects the economy. And there's a bunch of idiots out there just like me doing the same stupid things, okay? So it's hard to quantify that, okay? That's why you have to. That's why you have to look at the data that you have, not the data that you want or the data that you think you're going to have, okay? I'm okay with them inferring on future data. [00:14:38] Speaker D: Okay? [00:14:39] Speaker C: But directionally, when you've got five months of directional data one way, okay? And the consensus is also that way. Okay? Now what are we waiting for? Okay, Are you. What does clarity mean? How much more clarity do you need? How much more clarity do you need? Okay? So if they wait too long. If they wait too long now we start getting into something. What could go wrong? What could go wrong? Right. Well, if they wait too long and we start to see cracks in labor, we start to see cracks in demand, we start to see actual slowing of the economy in a foundational way, a structural way, because people aren't buying new homes and renovating their homes and doing these things, and they're not buying cars like they should because the cost of capital is so high. Well, then you're starting to start to see layoffs. [00:15:38] Speaker D: Okay. [00:15:39] Speaker C: And then now, all of a sudden, now we get to the other scenario where it's this time next year, the unemployment has gone from 4.1 to 5.1, and they're sitting at 4% on the upper balance. You know, they've cut it to, you know, two times. Maybe that's it. And they're. So we need more clarity because, you know, inflation's at, coming in at 0.1 and 0.2% a month. Okay, well then all of a sudden, okay, now we have to do something quick. Now we have a new. A Fed chair in. Maybe it's going to be Kevin Harsh, maybe it's going to be Kevin Hasset, maybe it's going to be Chris Waller. [00:16:10] Speaker D: Okay. [00:16:11] Speaker C: And then now they start cutting rates at a dramatic fashion, which I think would stimulate the markets, by the way. Okay. But in the meantime, it would just be a lot of ingestion. And the other thing is, is, is the fact that Trump is having to put pressure on. And here's the thing is, I don't think Trump is. I don't think he's putting a lot of pressure on the Fed, and they're bringing the independence of the Fed into question because of the pressure that's being put. But I don't think Trump wants to do that. I think he wants an independent Fed. He doesn't want to have to put pressure on this Fed, but he feels like he has to because they're so out to lunch. They are so out to lunch, he's having to do these things. And he knows the repercussions of, of the pressure he's putting on and then losing the air of independence. Right. [00:16:59] Speaker D: Okay. [00:17:00] Speaker C: It's, it's, it's. You're really seeing in the longer end of the curve right now you're looking at 30s. They're deal. They've been over five. I think they actually might be over five today. [00:17:07] Speaker D: Okay. [00:17:07] Speaker C: That's getting into the sort of, that, that sovereign risk type of well, you know, the, the US Is the world's biggest and best store of value today and has ever been. And part of that equation is the independence of the, of monetary policy. The independence of monetary policy against fiscal policy has created these two equal branches, I guess, of monetary fiscal policy. Right. Of dollar governance, I guess you might say. Okay, so the fact that that's now being questioned at some level, even at a small level, because Trump is putting pressure on the Fed to do something even though they're supposed to be independent, is. I think Trump understands the risk that he's taking, but he feels like he has to do it because they are so far out there and they're. And they're not. They're not. And I got to tell you, if you listen to Powell, they're almost not acknowledging in any way, any way that there should be a rate cut when literally Waller came out today, and he's come out several times over the last few weeks saying we need to cut now. So now we're having this massive delta between actual Fed members. [00:18:20] Speaker D: Okay? [00:18:21] Speaker C: So now the Fed itself is starting to. And that's where again, Powell is really starting to put on his little swimming suit and swim in the lake of, you know, not credible. Because now we're starting to see these big, these big gaps in Fed members and what their opinions are. Right? So what happens, so what then happens if things, and God forbid, we actually have a real tariff war? So let's say these tariffs, because we still don't have a real deal with China, okay? And this whole thing expires August 1st. Okay? This pause starts, stops August. The pause goes away August 1st. Let's just say this tariff starts to reinflate, starts to escalate again, turns out into an. And it escalates all the way out into a full on full scale trade war with China, with Canada, maybe with Mexico, the Euro, who knows? [00:19:13] Speaker D: Okay. [00:19:14] Speaker C: It's at this point, I think it's not likely. Okay, but it's not zero. I would probably say it's 30%. Okay, but that's high enough, right? So if that, if that takes place now, what happens? Okay, that creates a whole other scenario that if we get, if we get a trade war of that level that now brings the supply chains into question, right? Now we start losing supply chains from Canada, we start losing supply chains from Mexico, we started losing supply chains from China, okay? Because these terrorists, maybe there's like, you know what? We're not gonna. You want it. We're not, we're not paying your tariffs. We're just not going to import, we're just not gonna. And it could get there. [00:19:52] Speaker D: Okay? [00:19:53] Speaker C: Now we have supply chain issues, but we have demand in our economy. Now what do we have? We have low supply, high, high demand. Prices shoot up in real terms. Not tariff, not tariff inflation. That's not real inflation. That's just price increases on a tariff, on a tax. This is actual a supply demand imbalance that shoots, that shoots prices up in a material way. Now all of a sudden we've got the shorter end of the curve spiking, okay? And we have an economy that's really starting to cool off. So we start to get the middle to the middle or the longer end of the curve. Your five sevens, tens and twenties, those bonds just crater, okay? People start running those and you get this massive inversion specifically to the three month and the ten year note. Right now the banks, they're not wanting to lend at all because they're not making anything on these loans, right? And the only people they're going to loan to are the people with the utmost credit quality. And then so now we start to get financial, massive financial deleveraging and now we have a huge problem and that could send the market, you know, down 40%. [00:20:58] Speaker D: Okay? [00:20:59] Speaker C: So that's, that is certainly not our base case. I would call that a very, very, very unlikely scenario. But the ingredients to create a massive trade war and spike inflation are there. So there is, there, there is a lot there that can be avoided right now, both on a monetary side and on a trade side. [00:21:29] Speaker A: Going back to, I want to revisit The Matthew Dahl ARPG Tariff Hypothesis 2025 of back around January or so. December, January, you were talking about tariffs and how you thought the market was maybe misinterpreting what they were, what they were going to, the impact they were going to have in the economy. I don't recall it verbatim, but I think it went something to the tune of it wasn't going to be as inflationary as everyone thought it would be and it would actually be healthy for the economy. So now I'm, correct me if I'm wrong on that part, but I'm looking at this now and saying, okay, tariff talk kind of went away for a little bit. I guess that was May when they did the 90 day. And you've been seeing now this train coming down the tracks, as Johnny Cash would say, and you're seeing that the economic data is slowing faster than the Fed is seeing it. And now we also have tariff, you said the tariff deal expires August 1st and the Fed meeting is July 30th. So within the course of two days, we have two sort of big events happening there. It almost sounds like an unlikely scenario, but almost a perfect storm of you could hit a, you know, you could get hit with a 1, 2 punch here of the Fed not moving and that kind of scaring the economy a little bit. And then you also get tariff escalation that compounds that. Would they, Am I, am I seeing, am I saying that correctly? And that they would fuel each other and make things worse? Or is there any element at all where they can offset each other at all? Or could the Fed act because of tariffs, or could tariffs not have the impact because of interest rate? I mean, how does, how do those. [00:23:15] Speaker B: Two interact, is what I'm asking? [00:23:18] Speaker C: Oh, no, I mean, that's like, I mean, that's like using a funnel to drink tequila. I mean, it's, it's a, it's a bad idea with a bad idea. Okay, so if, I mean, if we have, if we have tariff problems, right? If we have real trade problems and we have a slowing economy and the Fed doesn't cut, I mean, we're talking about, you know, an economic nuclear bomb here, right? And, you know, I, I, but that's not the data that we have. Remember the race car stuff, right? Trust your, we trust the data that we don't look at. You know, I don't, I don't take the data that I'm looking at and go, it doesn't mean that. No, that's exactly what it means. That's what we have it for. That's why we, that's why we spend billions and billions of dollars on all these different bureaucracies, you know, the Bureau of Labor Statistics, the Census Bureau, all across the board, the Bureau of Labor, the Labor Department, all across the board to, to gather this data and have these great mathematicians figure it out and put it out there. [00:24:19] Speaker D: Okay? [00:24:20] Speaker C: That's what it is. That's what the data means. We have the best economic, the cleanest economic data in the world by a, by a country mile. Trust your data. So that's not what, so the data is not saying. The data is not saying keep rates high, keep rates high. The data saying, okay, the economy is good. And here's another stupid thing I hear. Well, you know, retail sales came in strong. They did. Retail sales came in headline. Retail sales came in at 0.6 month over month on a 0.2 consensus course. Retail sales, which is X Car X Auto parts, came in at 0.4 on a 0.2 consensus bank earnings, they're coming in great. Okay, Citi came in with an 18.4% upside. Surprise. $96 a share. Goldman came in. 13, beat their, beat their estimate by 13. $10.90 a share. [00:25:12] Speaker D: Okay. [00:25:13] Speaker C: JP Morgan beat their estimate by 17%. Economy's good. Okay, so the economy is good. Why do we need to cut rates so the economy doesn't become bad? You fix the roof when the sun is shining. We have low inflation. The supply chains are, are starting to really ramp up, which will hold inflation down. Okay, we have good bank earnings. Banks are lending. Banks are healthy. Retail sales are healthy. Okay, this is not the time you want to shut this down. This is like, okay, it's 10:30 and the party's getting going. Everyone's having a great time now and the cops walk in. [00:25:51] Speaker D: Okay? [00:25:52] Speaker C: So no, we don't need to shut this thing down. What we need to do is start, you know, bring a dj, right? Bring another bowl of chips. [00:26:02] Speaker D: Okay. [00:26:03] Speaker C: Start lowering that rate a little bit. Ease it out a little bit. Get it to a. I'm not saying go full, full neutral to me. Full neutral to me is 2%. If they added, if they, if they had it anywhere between 175 and 250. Okay, that's neutral. Okay, so 3%, three and a quarter percent were still restriction. We're still restrictive. So pulling a little bit of restriction away from a very restrictive position. Right, but yet keeping it somewhat restrictive until, again, I guess there's more clarity then, is exactly what the party needs to keep it going. And that's what we need to do. Because the labor market, you know, there's some underpinnings. I mean, the, the unemployment number is at 4.1%. But you know, anecdotally it's harder for people to find jobs now, especially good paying jobs. So there's only a certain period of time where we were, where we have this window to make sure, you know, we keep the lights on. [00:27:10] Speaker A: So what Trying to think how I want to word this. I'm not trying to sound doomy by any means. We really have got to work on our vocabulary. I don't even think doomy is a word. We've invented about seven different words today between you and I. But you like inventing words. [00:27:27] Speaker C: It's a very We're a word rific show. [00:27:32] Speaker A: I love it. There could be so many different possible choices for this. [00:27:37] Speaker C: That's why we can't get any sponsors for our show. [00:27:39] Speaker A: That's Right. Yeah, because we use. [00:27:41] Speaker C: We, we don't use words that exist. [00:27:43] Speaker A: Yeah, we don't, we don't talk. Good. Anyway, so if we have tariff mageddon plus Fed not reacting to, you know, and keeping, keeping policy rate where it's at, it would be a really gloomy scenario, it sounds like. [00:28:02] Speaker C: Yeah. [00:28:02] Speaker A: But I guess my question is, you said what can, what can go wrong? What can happen to keep that scenario from playing out? Either Powell gets it or Trump gets a tariff deal done and gets this all taken care of. If either of those two things were going to happen, they could have already happened. So why have they not happened? And how do we know that they're going to happen? You get all. [00:28:32] Speaker C: I think, I think that's a. But I mean, that's a good question. Why haven't they already happened? [00:28:39] Speaker D: Okay. [00:28:40] Speaker C: And I wish I had the best answer in the world for. But my guess is Trump is, I think he's in a lot of ways a patient person okay with this, but I think his patients are going to come to an end. In fact, one of my advisors asked me today what happens on August 1st if he just kicks it to September 1st, you know. Pauses another I said, I don't think he's going to do that because if he does that now, he's going to lose credibility. We're going into 2026 is, I'm sorry, yeah, 2026 is a midterm year. [00:29:09] Speaker D: Okay. [00:29:10] Speaker C: And those, those Republican congressmen and senators and governors, they're going to want to go into 2026 with, you know, a good economy, a good labor market, a good stock market and a leader with credibility. And if they, and if he does the taco thing again, what they call the taco, the Trump always chickens out. Okay, well then that's, I think that, that, that is one of the, the legs of the four legged stool because he's, he starts to lose credibility as a leader. So I don't think he's going to do that. [00:29:40] Speaker D: Okay. [00:29:42] Speaker C: So my guess is there will be, there will be a little bit of indigestion from August 1st through middle of October like there always is. I think that's probably the perfect catalyst for it. I think if we don't get a cut in July, there will be a tremendous amount of dovish talking points. The other thing is, is we're going to get a nom, a new, nominate a new person nominated for the Fed chair role probably within the next 90 days. So what's going to happen is the bond market is going to like they always do, they're going to get ahead of this thing and they're going to start pricing in a very dovish fed spring of 2026 and that's just about, about nine months before. So you'll start to see that, you'll start to see that middle shorter of the curve really start to come down, which I think is another leg for this market. And that's, that's where I think we don't get to 6,900 into this year without 375 on the 10 year. Those, half, those, those go together or, or even 350. [00:30:42] Speaker D: Okay. [00:30:43] Speaker C: So I don't, we don't get to 6900 with a higher, with high yield with 440, 450, 430, you know, even 425. [00:30:50] Speaker D: Okay. [00:30:51] Speaker C: So it's the bond market getting ahead of this, getting ahead of the new Fed chairman pricing in a dovish Federal Reserve in 2026, bringing yields down which I think will of course lower the discount rate, obviously increasing yields. And I think next year we're going to see a 24 x s P500. I think 2026 we'll see a 24 times earnings. [00:31:15] Speaker A: Wow. [00:31:16] Speaker C: 24, 24 and a half. [00:31:18] Speaker D: Yeah. [00:31:19] Speaker C: Because again I don't look at this, I don't look at this market as expensive right now. I know, I know it is expensive on historical, you know, metrics. But again we've got, we've got the equal weighted S p trading at 17 times earnings right now. 17.05. And that's hardly expensive. In November of 2023 it was 17 point. I'm sorry, November of 2019 it was 17.4. On an equal weighted basis the market ex Tech is, you know, 18 and a half times earnings growing at 12 and a half percent. X tech. The tech sector is 26 times earnings growing at 18. So the entire thing across the board is a one and a half peg ratio across both on, on tech as an independent and then and the cap weighted X Tech, they're both identical. [00:32:09] Speaker D: Okay. [00:32:10] Speaker C: And then we have, and then we have the, the 17 times on the equal side. So what I think you're going to get is you're going to get this, this, this spreading out of the market and, and that's going to lift the entire multiple up a little bit and that's where we get to 6900. [00:32:25] Speaker A: Well Matt, as, as always appreciate your thoughts and opinions. I will remind everyone that even though our opinions are the right ones, they are still strictly our opinions and nothing that we say on the show is intended to be investment advice or financial advice of any kind. If you would like to speak with Matt and his team and actually get some advice and have them take a look at your portfolio and make suggestions, you can give them a call at 702-655-8300 or visit intelligent investment.com and. Or just, you know, and also encourage you to go back and check out some of our previous episodes because that'll make some. I like that you're willing to take a stand and when you've made stand, when you've taken a stand, you get. You've missed a couple here and there, but you've been pretty accurate along the way. So I encourage viewers and listeners to go check out some of the previous episodes because they have played out pretty accurately for the most part. We might not be able to talk the way we should and sound intelligent, but the data, the objectively optimistic data, has not failed us yet. [00:33:31] Speaker C: No, but our wordification is terrible. [00:33:34] Speaker A: It is. Yeah. We don't grammar. [00:33:37] Speaker C: We don't wordify good at all. [00:33:39] Speaker A: We don't grammar fy at all very well. Well, I'm going to try to think of some new words for next week and look forward to chatting with you as always. How long do we have before our button up show? Two weeks or one week? We can't make up words on that one. [00:33:53] Speaker C: I believe it is not next week. [00:33:55] Speaker A: I think it's the week after next two weeks out. So yeah, we don't need to. We try not to invent words in that show. I don't think actually maybe should. [00:34:05] Speaker C: We'll just keep it for two weeks. I don't feel like doing it next week. [00:34:11] Speaker A: All right, man. Well, enjoyed it as always. Have a great weekend. See you next time, buddy. [00:34:16] Speaker D: Okay. [00:34:16] Speaker B: Discussions in the intelligent Investment show are for educational purposes only. The information presented should not be considered specific investment advice or a recommendation to take any particular course of action. Always consult with a financial professional regarding your personal situation before making investment or financial decisions. The views and opinions expressed are based on current economic and market conditions and are subject to change. There is no guarantee that any statements of future expectations will come to fruition. All investing involves risk, including the potential for loss of principal. Securities offered through United Planners Financial Services member FINRA Advisory Services offered through American Retirement Planning Group. ARPG and United Planners are independent companies. Garrett Lille and Wealth Partners are not affiliated with ARPG or United Planners. Any endorsement that I may have given during this recording, it is important to note that I am not a client of arpg. The views expressed should not be considered representative in any way of my past, present or future experience with MAT or arpg. No incentives have been provided to me in connection with any endorsements I may have given on the Intelligent Investment Show. Investing involves risks and there is no guarantee of any future results, performance or success.