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My name is Logan Miller, and today I will be co-hosting this podcast with my colleague Zach Griffiths, who is the head of IG and macro strategy here at Credit Sites. I'm the head of European strategy, and we're pleased to be joined by Cedric Chahab, who is our chief economist at BMI. So looking forward to the discussion, you guys. And I think today's focus is really going to be just broadly on kind of the shifting tides, both in the U.S.
and across the pond in Europe, where I'm based. So let's kind of start and kick it off with the discussion. Cedric, welcome. Glad to have you on today.
But I'd be curious just to pick your brain around where you're thinking about the growth expectations for Europe. There's been a lot of kind of renewed optimism, I would say, in terms of some of the economic forecasts that we've seen come out this year. How does that kind of align with your team's views? Hi, Logan.
All right, Zach, great to be back on the podcast. So in terms of our forecast for Europe, it's a growth of about 0.8% this year. So quite weak, I would say, relative to emerging markets and also relative to the U.S., which we see growing by about 1.5%. And it's interesting for Europe because even though we have lower interest rates and a bit more fiscal stimulus coming from the block, there are certain headwinds for the Eurozone economy, including kind of weaker global growth, more expensive Euro, which is weighing on competitiveness, and then, of course, tariffs on their exports to the U.S.
So that means that despite some kind of looser policy settings, they won't show up that much this year. I think they're going to probably be felt more next year. And you mentioned a little bit of optimism around Europe. I think we share that view, but that's more of a 2026, 2027 story, as you have four drivers that are going to support growth a little bit more than what we thought probably, you know, six months ago.
And that's a little bit more fiscal policy, particularly out of Germany, given the changes that we've seen this year. The second one is around kind of household balance sheets, which look much better than they used to. So a lot of European economies have seen the leveraging since the GFC. They have some reasonably good savings since the pandemic.
And then they're probably going to respond well to the slew of interest rate cuts that we've been seeing over the past few quarters. And the other thing from a household but also a corporate sector, we have when we expect lower energy prices. And that's in short contrast to what we saw during the pandemic and just after the pandemic where the invasion of Ukraine saw a spike in energy prices for Europe. And that really hurt kind of the manufacturing sector in Germany, for example.
That's going to reverse. And then the last thing is reform. So Mario Draghi talked a lot about European competitiveness, this big report. And so many economies are now looking to enact some reform, which should help over the long term.
Now, all of those things are positive, for sure. But, you know, we just have to remember that even though these things are much more positive, there's still structural constraints to Eurozone growth, something we've talked about before. Yeah, I think those are obviously really interesting points. I do find it quite interesting that, you know, despite some renewed optimism in Europe, European markets are sort of trading like we're in this new kind of upswing cycle.
I've seen obviously credit spreads, you know, collapsing this year in Europe and sort of outperforming on a global basis. We've obviously renewed interest from foreign investors and European-denominated corporate credit. And then if you just look at equity prices, we've seen, you know, European equities really rallying pretty sharply year to date. So I find it quite interesting that, you know, we're optimistic on the growth side, but I think markets are even more optimistic.
So it's going to be pretty interesting to see how this shakes out. Obviously, you have a number of kind of key tailwinds. I actually like to think of more right now as sort of backstops for Europe, which is obviously kind of the renewed fiscal spending impulse and, you know, some potential deregulation or cutting of red tape in Europe to help things kind of facilitate things getting done quicker. But I think it still kind of remains to be seen whether or not, you know, a lot of this optimism that's being priced into risk assets, especially in Europe, really transpires into real economic output.
But I'd be curious. So Cedric, how does this kind of marry up with, you know, the views on the U.S. side of things? Or is there anything you wanted to touch on that I just kind of mentioned?
Yeah, just on Europe, I thought there were a few things. So one is kind of French yields relative to Italy. It seems like French yields are pushing higher and that spreads narrowing, which is interesting. It's kind of those relative fundamentals between France and other economies.
So France slowly worsening. I think that's an interesting story, particularly given that you had a little bit of the kind of the budget problems or the announcement of the budget was a week or two ago, where it kind of fell flat. And it just shows, you know, some of the challenges that some European economies are facing, despite, you know, this optimism. They have still huge hurdles to go through.
The other one is, you know, despite the looser policy, I can't quite imagine corporates or households really rushing to the banks because of lower interest rates while there's a lot of trade uncertainty. So I think that's going to take a little bit longer. And then the last thing is, you know, we've been talking about the dollar, the weaker dollar, and the stronger euro. And it's just, in my mind, one thing I'm trying to square is, like, we've already seen an appreciation of the euro, quite a significant one this year, about 12% or so.
And, you know, if European growth is really strong and there's kind of this animal spirit really coming together, I would say, well, you know, there's a good bullish reason to be kind of long euro and maybe the euro pushes a lot higher because if the economy is really strong and that's what's driving the euro, then it can absorb it. But in an environment where the eurozone is still kind of growing below 1% and will just be, you know, somewhere around maybe, you know, just over 1% next year, 1.2, 1.3, it's hard to see a really bullish story for the euro without that bullishness of the euro impairing some of the export competitiveness. So I think there's lots of interesting dynamics under the hood and there's certainly reason to be more optimistic around fiscal policy, defense talks and things like that. But I just can't really square the whole euro story just yet.
I want to follow up with you there, Cedric. So you laid out that your growth forecast for Europe this year is 0.8%. That compares to about 1.5% for the U.S. Do you have a forecast for 2026 in Europe just to think about how quickly or to what magnitude some of these tailwinds come together in your economic growth projections for 2026?
Yeah, we're forecasting 1.2% growth next year for the eurozone and most of that improvement is going to be driven by Germany, right? We're just going to see a move from about 0.2% growth this year to 1.3% next year. So a lot of that kind of stimulus in Germany and the lower interest rates is going to feed through to next year because of the lagged impacts. So, you know, it's a good story but in terms of the direction of travel but, you know, we see the, in contrast, we see the U.S.
going by about 1.5% this year, 1.7% next year. So U.S. outperforming two years in a row in addition to all the outperformance that's done over the past few years. See, that's interesting to me when I think about how much spreads have tightened in Europe and seemingly how much optimism there is there.
I want to get your view on, let's say, the $500 billion infrastructure, or billion euro, I should say, the infrastructure package out of Germany and how that compares to the One Big Beautiful Bill in terms of the fiscal impulse for the two. I know going through some of the CDO dynamic soaring, a lot of the economic benefit of the One Big Beautiful Bill is expected to be front-loaded and actually offset, I believe, in terms of, let's say, the second half of the next decade. So clearly, it seems like at least sort of looking at your overall growth forecast, still the U.S. in the lead even with kind of this big new package coming out of Europe.
Yeah, I mean, there are lots of different reasons, right? There's a productivity story, there's a demographic story, and there's a fiscal impulse story. And it's funny because a few months ago, I remember seeing a chart which was U.S. growth outperforms Europe, but the U.S.
also runs much larger fiscal deficits compared to Europe on a sustained basis. So we're looking at, you know, an average fiscal deficit of 6% in the U.S. You know, if you don't get decent tax revenues from tariffs, that could be 7%. So the One Big Beautiful Bill actually translates to a continued very large surplus, actually.
And, you know, that's possibly one of the reasons why the U.S. continues to outperform. But I do think that the U.S. has some structural factors which are more pro-growth.
So, for example, a much faster pace of deregulation under Trump, particularly the banking sector, that could see credit growth pick up. You also have kind of much more interaction between kind of technology stocks and the economy and the adoption of AI, for example. And those things, I think, are pretty important for the next five years in terms of productivity growth. I guess on the U.S.
side, you could argue that, you know, Trump's migration policies or immigration policy is not good for growth, right? Because the increase in labor is much slower than previously and we need productivity and labor at the same time. So that could be a drag for sure. But it's yet to be seen how that all kind of lands.
But I still think that trend growth in the U.S. will be higher than trend growth in Europe. I don't think that's a controversial view. Totally.
And I think one of the big things that we've seen, at least in the corporate credit markets, Logan, I know you do a lot of work on this, is relative flows or demand for Eurocredit, let's say, versus U.S. or rest of the world. I know you've written on this a good bit, but could you kind of frame up for us what you're seeing in the data and how you think that that is impacting, let's say, relative spreads between the U.S. and Europe?
Yeah, I think kind of the most real-time data that we have showing sort of demand from, you could say it's a mix of kind of institutional and retail investors, but that's our kind of fund flow data that comes out on a really daily basis that tracks flows across European, U.S. dollar, EM, and even kind of international funds. But definitely we've seen, you know, very strong wave of inflows into Eurocredit. I think there's a number of reasons for this.
Obviously, one is probably the fact that we've seen interest rate cuts pretty sizable by the ECB over the last 12 months. And so with that, you know, you see your opportunity set in sort of your more shorter-duration buckets of European credit start to diminish. And so you have, you know, investors domestically that need to move out in duration. So we've seen really strong inflows into your core intermediate total return funds in Europe, as well as moving down in rating into high yield.
We've seen the last two weeks, we've seen record inflows to European high-yield funds. You know, the notional amounts doesn't sound all that incredible, but as a proportion of the market size, it's continued to sort of overwhelm, you know, the pace of issuance. And so, yeah, I mean, I think you've definitely seen from the domestic side so that move down in out duration, also down in ratings, but also from the non-U.S. side, I think a lot of foreign investors are looking at Europe as a fairly constructive place to be from a creditor standpoint.
Again, you haven't had much kind of new M&A or event risk emerging. You have, you know, probably a bit more continuity when it comes to, you know, existing policy versus more uncertainty on the U.S. side. And at the same time, you also have kind of the return chasers, or I guess the money that follows performance.
And with, you know, Euro currency up quite significantly this year, I think you have had some of that sort of chasing performance over the course of this year, which is boosting up inflows from foreign investors. So definitely so far, you know, it's been boosting, you know, on a sort of mutual fund ETF perspective, record inflows into both IG and Europe and high yield within European markets this year. Yeah, it's really interesting. I feel like it's kind of a crazy comparison, even as Cedric was taking us through his growth expectations.
Even next year, the U.S. is still better than Europe. And it feels like it almost flies in the face of sort of what we're seeing with the flows. But at the same time, everything is up.
European equities, U.S. equities, credit spreads are tight, really across the world. And I feel like in a lot of the client meetings we've had across the globe recently, it comes back to this idea that yields are attractive. And it feels like there is plenty of liquidity in the system looking for a home logo and just kind of outline moving down the credit spectrum and out into racing.
And I feel like the question is, what is it going to take to shift that market focus or shift that in terms of driving markets? And to me, it seems like maybe in the second half of this year, as the Fed continues doing quantitative tightening, treasury rebuilds, its cash balance, we could get a little bit of a gut check there. But going back to, you know, the quantitative type episode of 2017 to 2019, there's only a brief period of market sell-off in the fourth quarter of 2018. We're kind of a similar backdrop with the trade war.
Ultimately, the Fed stepped in and delivered preemptive rate cuts, I'd say, in 2019. The question now is, can they deliver those rate cuts with the current backdrop of the trade war? And that kind of brings me to what's going on in the U.S. with the dispute or all of this focus on the Fed Chair Powell from President Trump.
And Cedric, I want to bring you back in to get your views. What are your thoughts on all of the harassing, basically, of Chairman Powell at this point and kind of what it means for central bank independence, inflation expectations, and the path of the Fed going forward? Yeah, that's a good question. So I don't think it paints the U.S.
administration in very good light. And I think Scott Besant, even though he talks about kind of reviewing the Fed and everything, he has to walk back some of the more egregious comments that Trump makes. I think the word you used was harassed. I think that's a really good word because they're basically harassing him.
And I guess the point is for him to basically, once he steps down from chair, that he resigns from his position as board as well, which is actually only due up, I think, January, 2028. And Scott Besant has alluded to this in interviews. He basically said, well, if you think having a, like nominating a shadow Fed now is bad because it kind of muddies the water between the current Fed and the next Fed chair, he says, well, if you think that a shadow Fed kind of muddies the water, then why would you have someone who has been chair sit on the board of governors while you have a new Fed chair who's trying to establish themselves to kind of lead the FOMC? I don't think Powell is the type to resign.
I think were he to resign before May 2026, I think that would cast a very long shadow and question marks about the Fed's independence, which he probably wouldn't want to do. Scott Besant probably doesn't want him to do that either. But, you know, if you like to kind of stretch your imagination a little bit, which I like to do because my old boss used to say financial markets are stranger than fiction. If every time Trump attacks the Fed and chair Powell and let's say the dollar weakens, Trump wants a weaker dollar, well, you know, add one and one together and you might have him attacking the Fed on purpose just to keep downside pressure on the dollar.
I mean, it's kind of extrapolating a lot there, but I wouldn't put past Trump given that he's so unorthodox in so many different ways. So, let's keep stick with you because I think it's quite interesting and this could go in many different directions. I do want to kind of circle back because I know this is probably more impactful to sort of like the near term or even medium term growth outlook, but that's obviously the question mark around tariffs. You know, we've seen a handful of deals between U.S.
and some of its key trading partners over the last, even just overnight with sort of the U.S. locking in a deal with Japan is obviously a big one. You know, if you told me at the beginning of the year that there'd be a 15% tariff on Japanese imports to the U.S., like I would tell you that the market should be considerably lower in discounting that impact, but it seems like things are kind of all good and the market's taking this as a pretty strong positive. So, what's your sense around like this whole tariff situation?
I mean, is there anything that we're sort of like missing? You know, is this perhaps somehow, you know, being viewed as more of a positive, like long-term outcome with trade deals actually being acquired now or what's going on here? So, I think like any economic policy, they're winners and losers, right? And so, they're clear costs to tariffs because it's a tax and you would want to always reduce kind of trade barriers and the cost of doing business.
And that's what most businesses do in order to attract capital, right? So, if you're... market you attract capital by basically liberalizing your economy deregulating making a business environment attracting the capital because it's very competitive i think for the case of the united states it's very different the u.s is kind of the investment place du jour right if you have excess savings you recycle them into the u.s through reserves or fdi so the u.s doesn't have to be as competitive and so it's kind of a price maker rather than a price taker so in that sense it can set global policy potentially with less detrimental impact than a price taker for example and i'm just saying that to contextualize one aspect of the u.s economy the other one is tariffs aren't good but the alternative from the u.s administration and i think this has become much more consensus in terms of the economics field is that china and other economies have implemented quite mercantilistic policies in terms of kind of subsidizing investments repressing or suppressing wages keeping currencies undervalued at the expense of the u.s and all this reserve accumulation puts upside pressure on the dollar i don't think that's controversial anymore as a kind of theory so if the u.s administration feels that it has kind of a price maker position and it feels as if it needs to it's been kind of lost out because of this kind of unfair trade practices then tariffs are one option now the interesting things of tariffs and this is probably the most important question is who pays for them if you think that the cost is kind of born equally between exporters and importers then trump is basically taxing the world as well as the u.s consumer but he's getting kind of two dollars for every dollar that the u.s economy has hit so maybe net net under such a scenario the u.s kind of can gain because it's taxing the world economy as it trades with the u.s if the burden falls more on the u.s consumer and u.s corporates then it's worse for the u.s for sure now it's too early to tell for sure right but i think what's interesting about trump policies and it's you know diverges so much from the neoliberal economics we've all been taught and have been experiencing since kind of the 90s but what's interesting is let's just assume for a few seconds that trump's policies will work okay i mean i know it's hard so let's let's try and we don't know i think there's huge risks attached to the policies right so if for example trump is able to raise much more revenue than everybody expects for tariffs without it being such a cost to the u.s because it's worn also by exporters right then maybe that helps the fiscal story more than people think and actually that would have a on bond deals and things like that the other part of it is if you're kind of strong arming other economies to invest massively in the u.s in terms of manufacturing jobs you know whether you get that by providing a really good business environment like singapore or whether you strong arm people like if you're getting that investment that's good for the economy now of course it's better to do it in a singapore fashion than a u.s fashion so let's assume those two conditions maybe the u.s actually you know comes out okay in that regard right you got a lot of investments you kind of tax the global economy and i think the idea that the idea that trump has is basically if you tax everybody a little bit and get everybody to commit a few billion dollars here and there that all adds up and his point of view is the u.s has been ripped off which i disagree over the past few decades so he's trying to kind of tax the world now that's kind of if you say that's the optimistic scenario and it works out with no kind of big kinks the problem is that you know trump is is looking at the economy and he's raised tariffs and equity markets are near record highs the labor market hasn't cracked inflation is okay and the risk is trump is emboldened by these policies and actually what we see is higher tariffs than what we thought are kind of adjustable for the u.s and global economies and then as businesses have to rebuild their inventory at a much higher cost inflation surprises to the upside inflation expectations rise the fed panics a little bit because they need to anchor inflation expectations and then you have a situation where you have a kind of tax on the u.s consumer at the same time as maybe tighter financial conditions and tighter monetary policy or at least not easier monetary policy and i think given that we're late in the economic cycle that that could be a really bad mix for the u.s economy and then you know really bad for the global economy so it's a kind of high stakes high risk game that trump seems to be playing and so even though you can kind of make a little bit of sense of what trump is doing in terms of his policies i think it comes with significant risks there's a lot of great stuff in there cedric i think to say that trump would feel emboldened based on the market outcome so far it'd be tough to blame him i mean it's pretty incredible how resilient and frankly strong markets have been in the face of extreme geopolitical u.s fiscal uncertainty and so i think i like the way logan framed up that last question i know you've also in other conversations we've had sort of highlighted that potentially this is effectively a transfer of wealth either from u.s corporates and households to the government or perhaps foreign corporates to the u.s government which is perhaps the goal of the trump administration i think depending on how that ultimately shakes out is really going to be hugely important for the ultimate success of these policies or the assessment of success of these policies in the record books my last question for you is do you have anything that you're looking at to try to gauge how much of the tariff costs may actually be pushed back onto the foreign exporters is there any way to look at that from your perspective so i mean just in terms of the cost we can measure it a little bit it's very hard to measure the whole cost because it's absorbed by so many different parties but if you just look at the tariff revenue that trump has been able to raise i think there's 24 billion in may which on an annualized basis is like 300 billion which is one percent of gdp so that's much larger than most people were expecting and that's with an estimated tariff rate of only about nine percent now we would expect this number to rise because the effect of tariff rate is rising maybe imports fall a little bit in response to higher prices but it's still a pretty big number right i remember a few months ago we were talking about the kind of a 10 tariff leads to about a one one percent increase in revenue and it seems like those numbers are looking roughly good in terms of how we assess it it could change a little bit of course because the data is so volatile but in terms of the other costs how to measure that well we've seen some data which suggests that exports of certain kind of countries and automakers for example their volumes are up with their prices well their volumes are much higher than their value which means that they're taking a hit on their margins right so they're eating the tariff basically and it's a transfer of wealth from as you said the foreign corporate to the u.s government so that's one way of looking at it but i think there's a limit to how much any single sector can eat the tariff right at some point they're going to be faced with much thinner margins and maybe their stock is going to underperform they're going to start incurring losses i don't know depending on the company but that's not sustainable right so you have to divide it and you know you could say as an exercise you could say well if the exporter gets absorbs a little bit the importer absorbs a little bit and the end consumer absorbs a little bit of it maybe it's not the end of the world for everybody but it's very hard to kind of distribute things evenly depending on the product and then you know these you know a tariff is a tax which is essentially a distortion and that creates a wealth distribution in ways which are not predictable as well and so sometimes you might have another company which for example is not facing a tariff but because prices of their competitor product maybe which is tariff rate is higher then they also raise prices so that's kind of a negative consequence as well so you know whenever you impose these types of taxes or tariffs you get some wonky results as well that you just can't predict yeah there's no free lunch so i guess you can't have this be a policy that benefits the u.s and ultimately the world so okay so before we wrap up i just wanted to get some of your thoughts on the banking sector some of the reforms coming through and how that fits into your overall view going forward so i actually i've been thinking about this a lot because i think we're seeing a few things coming together which are quite interesting and you don't see them quite often right so trump trump is basically looking at banking sector reform so reforming the supplementary leverage ratio also looking at kind of reducing payments by the gsips and the interesting thing that the administration saying and bowman on the fed who's kind of leading this effort is that it's causing you know kind of friction in the treasury market not to function well because of how they have to account for how they hold the assets and they basically say you know it'll be better for the function of the treasury market which i interpreted as banks can hold on to more treasuries if they want to without kind of getting such a kind of cost to that and then that's good for the demand for treasuries at a time when your supply is very high as we spoke about in terms of the wide-fiscal deficit so i think that's quite interesting but if you look at the capital ratios for banks you know they're very well capitalized but what's interesting is if you look at kind of bank lending to the economy and to the private sector you can see that it shares much lower than it used to be after the gfc and so in a way maybe these capital rules have constrained the banks from lending as much as they would have otherwise now that might be a good thing if you think the banks are reckless right but actually the banks are very well capitalized they haven't been particularly reckless in the past years svb probably slightly different story but basically you know banks have to a degree maybe been disintermediated by kind of private credit and my other novel forms of credit right and so maybe this is a way to get the banks lending again to the household sector so i think this banking regulation is really interesting because it doesn't happen often these are kind of i think regulation cycles within the banking sector typically are much longer than the normal cycle so i think you know in the clinton administration a little bit before we saw some deregulation then during the gfc we saw some massive regulation and now almost 20 years later we're seeing kind of deregulation again and so i think this could potentially lead to a pickup in maybe credit growth for the private sector and the household sector and don't forget if you have a combination of kind of lower interest rates and strong balance sheets which we do on the household sector plus banks more willing to lend you can see household debt grow and if i'm not mistaken household debt fell from about 100 percent of gdp just around the gfc in the u.s to around 70s so currently so that's quite a big leveraging right so potentially there's room for that credit growth to pick up the other the other area i think is quite interesting is the regulation around cryptocurrency now i'm not an expert on this but the genius act is quite interesting because it ties cryptocurrencies and stable coins to u.s treasuries and the u.s dollar and i think there are a few implications here so the first one is as you regulate the industry you can create wider spread use and allow the u.s to be kind of the epicenter of attracting these capital flows because europe you know has less liquidity less kind of deep capital markets china very kind of regulated system capital control still so the u.s could really be that free market which attracts all that money right the second thing is which i think is interesting is we're starting to see more kind of cryptocurrencies being used as collateral for loans and it goes back to that idea that you know maybe younger people they don't hold the same type of traditional assets that we would have at their age they have more cryptocurrency if that can be used for collateral then that's great for kind of long and stuff like that so we see more than the other thing which i think is very interesting is if you're tying stable coins to the dollar and treasuries that essentially means two things one is it creates demand for treasuries which could help with the kind of absorbing that supply story which i mentioned and then the other thing which is quite interesting is if you're if you have a system of kind of stable coins payments which are immediate right they're on kind of modern digital payment infrastructure which is lower cost and faster than your traditional infrastructure right and at the same time you have that stability against the dollar maybe you have loads of you know millions of kind of retailers and people around the world emerging markets using stable coins in the future and if they're on board on the digital infrastructure you know and it's funny because you know the younger generation you know they call you know we started our lives off you know we didn't have computers then when we're teenagers we had those kind of big kind of desktop computers and now you know everybody's mobile first for example right you know if you have a whole generation of the next 10 years being digital kind of crypto or digital banks rather than traditional banking sector and they migrate towards the more modern infrastructure stable coins etc then that could potentially create huge demand for dollars which kind of flies in the face of that kind of declining u.s exceptionalism and the end of the dollar things like that so i think for all of these these reasons i think this is something which i think is not talked about enough and that's why it's kind of become a little bit of an interest of mine over the past few weeks well maybe it's not talked about enough but it's priced into markets if we have a credit boom coming in the u.s alongside stable coins and tariffs financing our deficit maybe everything is awesome after all i don't know yeah coals and what else well the other thing which is quite interesting is have you heard of this kind of i think it's bitcoin treasury or treasury bitcoin it's basically companies borrowing money to invest in bitcoin which sounds like a terrible idea yeah no risk involved there exactly exactly so there are more and more companies which are doing that now um so they started as far as i can tell i don't know if they started it but they're definitely the leaders in it there are more and more companies doing this and actually it's funny because i hadn't heard much about it but then in the past few weeks i was talking to a friend of mine about this and then all of a sudden i heard it on bloomberg and then trump media announces that it's fine and i'm like has this is just blowing up is like is everybody you know issuing debt to buy cryptocurrency because that seems like if you remember the gfc like one of the telltale signs that well that maybe the economy was in in the bubble was that a lot of companies were were making money not from their normal operations but from financial kind of engineering and this kind of reminds me a little bit about it well cedric i was just gonna i was just trying to end it when everything's awesome and you're gonna do an analog to the gfc i don't know i'm just saying that when you know you're borrowing money to invest in a very speculative asset i mean look who knows where bitcoin goes maybe it goes to you know the moon before it goes back to earth but i just find it interesting this whole you know because you mentioned the crypto universe and how things are going up i think this is an interesting thing maybe interest rates aren't high enough maybe so i guess where we're headed from here is somewhere between our bull case scenario and the gfc i didn't say that i feel like that's a wide enough confidence interval well the gfc was very different i mean you had a massive kind of private sector debt cycle that had to be unwound and deflation and balance sheet recessions that's not where the households are that's not where the private sector is now plus we're seeing a massive productivity boom over the next five years probably with ai robotics and the digitization since the pandemic so like the gfc's you know i'll say that's a stretch but but you know big volatility in markets i think so all right i think that's a perfect way to end it gfc is off the table probably more volatility to come so cedric logan i want to thank you so much for coming back on the podcast i think we have plenty of other topics that we touched on at the end here that we can dive into in more detail in future podcasts so we hope you'll join us again soon thanks for that and thank you all for tuning in we'll catch you next time on no more risk better credit sites is not providing investment legal accounting or tax advice is not providing research or making any recommendations nor is credit sites offering or soliciting any transaction with respect to the purchase or sale of any security the receipt by this listener of this podcast is not giving advice by credit sites or its affiliates