Downtown Josh Brown

But when you sort of quartile out the oil like advances that you see over time, 10 percent, 20 percent, all the way up to 60 percent, you say, is there a pattern between what has happened to oil over six months and what the Federal Reserve will do over the next 12 months?

There's a negative pattern.

The bigger the shock in oil, the lower the probability that the Fed hike.

25% is not zero.

But even when oil is up 60, what you see is only a 25% chance that the Federal Reserve hikes.

Why?

Because most of the time since the 1980s, you don't see a pass through to core inflation.

And by most, I mean 48%.

Let me quote you.

Yes.

Yeah, growth.

Growth is the clear pattern.

And the funny thing is, like when you look at, I wrote a lot about the manufacturing recovery earlier on in the year, durable goods orders are actually in the top quartile of their range.

Yeah, so that's chart 14.

And then you do see this pattern, right, between core capital goods, right?

So the strongest core capital goods, that's the quartile we're in.

You see that relationship, you know, that monotonic relationship between the higher the growth is in terms of durable goods orders, the more likely the Fed is to hike.

We're in the top quartile of capital goods, yeah.

I don't know.

I mean, it increases your odds to 65%.