Matt Lozetti

Yeah, I think in the very near term, it's that the labor market dynamic, which is this fragile equilibrium with low hiring and low firing, breaks to the downside.

They begin to see layoffs pick up.

I really don't think we see that evidence as of yet, but it's a real risk over the next several months.

Do you agree?

I think over the course of 2026, I think there's some risks to the upside here.

As Bob mentioned, on the fiscal side, the stimulus checks that have been floated, not part of our baseline, but would be a very real upside risk.

And then I think we just can't put aside these risks around Fed independence.

And, you know, we heard Treasury Secretary Besson talking about regional Fed presidents, and we have to go through those votes.

And you have a Supreme Court case for Lisa Cook coming up early next year.

So there, I think that there are a lot of risks associated with it from a Fed independence perspective, inflation risk potentially to come, long end of the bond market also at risk potentially from that.

Yeah, I think it's a little bit around the language that they introduced into the labor market and into the statement.

How are we to think about that?

Is that clearly sending a signal that there's a much higher bar in the near term?

I also would ask him, are you internalizing what could be a very weak jobs report next week?

in today's decision.

I think that's a really important thing for the market.

I think the Fed would probably want to take out some of the sensitivity to next week's data.

I think one of the reasons that Chair Powell wanted to push this rate cut through was an expectation you could see some weakness there.

My expectation is next week's data is going to be volatile.

They are really putting more weight on the December jobs report in early January and the data we're going to get early next year in that assessment.