Steve Saretsky

So we can clearly go up 100 basis points or 1% incredibly quickly.

And it would happen everywhere at the same time.

And then that's going to cause money, what I would call a slide down the curve.

So you want to reduce your exposure to long-term rates and go lower.

So then they have to buy, say, the two-year, Steve.

which means you can have short-term rates, could actually see an experience with a trade down through what the Fed rate is or what the Bank of Canada rate is or what the Brits and the Europeans are doing.

And this is my point I'm trying to make here is that

I can easily see a scenario, because we talked about the bond market last week, where the market is going to trade through what central banks are telling you overnight rates should be, and then they're going to be forced to react on it themselves.

So regardless of what they're using as their preferred new measurement for inflation, I don't think it's going to affect the average person that much.

It's going to affect people that are running

You know, various kinds of funds, you know, they're focused on SOFR rates and things like that.

Obviously, they're keyed in on it.

But for the average person wondering what's going to happen with, you know, their mortgage rate coming up, or if they have a bond fund with a seven, eight year duration, which they're going to get absolutely smoked with.

Right, Rich?

Yeah, I mean, I would focus less on what the Bank of Canada and the Federal Reserve are telling us and focus more on what you're looking at, Steve, all the time, you know, like the five-year rate.

Because I think these rates can just explode higher.

And people will disagree because of different...

Maybe I think, well, demand is not going to be as strong as it was before, or inflation is actually not as strong as what, you know, I can see that argument.

But, you know, again, we are coming out of this long cycle where no one has experienced rising rates before.

No one has experienced a world without QE and inflation.