Yeah.

Um, and you know, we're not seeing, uh, any substantive cuts in public expenditure.

We're not seeing, uh, any substantive increase in fiscal revenues.

Um, so, you know, if you ask the question, is the budget deficit in 2027 probably going to stay close to 6%? And, you know, frankly, it's a, it's a pretty irrelevant debate as to whether it's 6.2 or 5.9.

The fact of the matter is, um, a rapid decline in the budget deficit is extremely unlikely, and that's particularly the case, um, when, you know, two of the drivers of the US economy in 2026, which is the energy sector and also the tech sector, um, which have been r- real powerhouses of driving economic growth in 2026.

In 2027, I think inevitably we are going to see, just because of base effects, some slowdown in the tech sector, and you see that in the corporate earnings pro- um, projections.

Um, and yes, oil prices are high today, but don't forget that the IEA is forecasting an 8, um, um, million barrels per day increase in global supply in oil in 2027, assuming that the Middle East calms down.

"Look at France."

So if I have to say in sort of one line, it seems to me the surprise is not that the markets climbed sort of a wall of worry, but it is the fact that many of the shock absorbers that we have been discussing have been actually working pretty well in the first six months of the year, and I hope it will continue.

I think, let me just start off with actually a very serious point, which is that Max, myself and all our colleagues in the asset management industry spend all our lives analysing the global economy, global capital markets, And part of that analysis is not where markets are going or not necessarily where there is value, but where the risks are, where are the surprises? And your question, Anita, was what has surprised us the most? Well, one of my answers to that is.

is actually we are paid and we work not to be surprised our job is to try and work out where are the surprises going to be and you know to help our clients and to invest accordingly to avoid those surprises and that that's what we do all day long um having said that i think just a few themes to add to max's comments on the first half of the year or so far this year, is that, first of all, we have seen a very clear uptrend in government bond yields.

So, you know, if we look year to date until early August, you know, 10-year US Treasury yields are up 50 basis points, 10-year JGB yields are up 80 basis points in Europe.

The increases are less pronounced, so Bund yields are up about 30 basis points.

But I think one theme, and this is partly linked to geopolitics, partly linked to the inflation outlook, but I think more importantly, and it's an interesting and slightly worrying question for the rest of this year and going into 2027, is our investors starting to become much more concerned about government deficits, particularly when the American budget deficit is over 6.5%, when the German budget deficit next year and the following year will be over 4%.

And in Europe, we shouldn't forget the problems and the challenges that the French government have with a budget deficit over 5%.

So if I can put this in a sort of one sentence, I would say that markets, so many investors are not asking what happened at the next meeting of the Fed, but they are actually asking what happened, whether their portfolio will work in the next regime of the global economy.

I stop here and I would like to hear definitely the view of Bob on these points.

Max, just to follow up on a few of the comments that you have made there.

First of all, on geopolitics, I think just to emphasise that what we have seen since the end of February, obviously has been the impact of the Middle East conflict on energy markets.

And that actually has really just down to one factor, which has been the flow of oil and gas through Hormuz.

And, you know, prior to the war with Iran, on average, there were 150 boats or tankers going through Hormuz.

And, you know, in March, that went down to less than five.

So it wasn't surprising that we saw North Sea Brent prices move above $100 at one stage.

With regards to the US interest rate, what are the expectations about the next move of the Fed? Over to you.