The three-month average payrolls at 68,000 is a pretty strong number. The momentum in the economy is really quite strong.

There is a lot of momentum because of AI spending, the industrial renaissance, and the one big beautiful bill [tax cuts]. Consumer spending should continue to see strong tailwinds.

Tax refunds will be around $4,000 this year on average, up from $3,000, because the tax cuts are retroactive.

If you look at the incoming data... there is no sign of demand destruction. If anything, this is pointing more towards overheating. The risk is that we will continue to see inflation stay higher for longer, and because of that rates are likely to also stay higher for longer.

We have the background that core goods ex-autos are going up, immigration restrictions put upward pressure on wage inflation, and now you have an oil shock and a strong economy.

The first Fed cut is now in October of 2027. The market is not expecting rates to come down anytime soon.