Mike Wilson

So we deemed it the rolling recovery in April.

And we're now seeing that like these areas of the market are not everything's going to recover at once because it's an unorthodox recession.

It's not like everything flushed at once and everything recovers at once.

So it is going to be staged.

And we've seen that in the market.

We're still narrow.

Quite frankly, AI, CapEx, is still is kind of one of early recoveries here.

Semiconductors being an early cycle group.

But we're not seeing the other quote unquote early cycle groups recover the way they typically do in a new economic cycle.

Why?

Because the Fed is behind the curve.

The Fed is way behind the curve on rates.

They need rates much lower.

If you really want to get the private economy moving, rates are too high.

Let's just start with the two-year treasury yield.

Okay, so my barometer is always the Fed is behind the curve if Fed funds is above two-year treasury yields.

And in order to stimulate the private economy, I would say they need to be well below that.

So that's 50 basis points just to get to neutral and maybe another 100 plus to get to something that's more stimulative for the average company and the average consumer.

Absolutely.

Think about the trickle-down effect of this capital spending.