Asks for GDP expectations and reasoning for 2.6% forecast (below consensus).
Diane
Joe Brusuelas
Q4 GDP forecast of 2.6% factors in a 1.5% drag from the government shutdown. Warns of risk of a much weaker print below the long-term trend.
Joe Brusuelas
Expects core PCE at 2.9% with risk of 3% or greater. A huge tax cut will bolster GDP in H1, but inflation numbers are key.
Asks what a 3% inflation floor means.
Diane
Joe Brusuelas
If 3% is the floor, interest rates will need to go higher. Cites Fed Governor walking back calls for lower rates.
Asks for the message from the bond market (10-year yield at ~4.05%).
Diane
Joe Brusuelas
Bond market message has been one of risk-aversion due to the structural transformation driven by AI, which will disrupt sectors like insurance, wealth management, and software.
Asks if consumer or business investment will provide heavy lifting for GDP.
Diane
Joe Brusuelas
Expects strong holiday consumption and another strong quarter for AI-driven CapEx (software, equipment, intellectual capital), offset by a drag from government sector.