and I'd say that a repo facility

or FEMA is a sibling.

I was going to say a cousin, but I think it's more like a sibling of the swap line.

The history of swap lines is that they were used to fund foreign exchange interventions.

during the 1960s and 1970s.

And then when foreign exchange intervention fell out of favor, they kind of fell into disuse.

And then around the time of the GFC, and you can debate exactly when, there maybe were some roots in this, the 9-1-1 facility that the Fed signed with the ECB.

What's your take on what the BOJ is trying to do there, but also what signal is coming from the long end of the JGP curve?

Where is Citigroup on that call?

Well, uh, uh, I think at the moment, uh, our forecast is a little bit softer.

But, uh, my, my feeling, my instinct here is, uh, we're continuing to see a lot of resilience.

And as you say, the global economy is chugging on.

Now, part of that reality is, yes, a flexible, adaptable economy, and we're responding to this oil shock a bit better than I would've expected, but at the same time, this structural, uh, secular support from, uh, the unveiling of, uh, of AI and the massive investment that's happening is another, uh, key driver of that resilience that we're seeing.

How much of a concern is that?

Oil, uh, we're, we're, we're watching it closely.

Certainly, higher oil prices pass through into higher headline inflation.

Do you think that's correct?

I was very concerned about how the long end of the- the- the curve was gonna respond, uh, to signals of Fed, uh, cuts.

And, uh, as you say, the long end of the curve has responded very well, uh, as the Fed has shifted more in the direction of an easier monetary policy.

And of course, the- the equity market is thrilled, uh, about, uh, an easier Fed.

So at least so far, it very much seems that the markets are with the Fed.

And they also, uh, at least, uh, the preponderance of investors are more worried about the labor market.

One other angle on this that's helpful is that in the Fed's view, and I'm persuaded they're right, they see, uh, the stance of policy as still being restrictive.

Do you think that story's going to change?

Which goes to the question of weakness, and if there is some sort of downturn in the United States, what is the fiscal impulse and the ability for the United States to borrow into weakness at a time where we have near-record deficits as a per- percentage of GDP and you have this structural shift going on?

If we have a downturn, and that is a very reasonable, plausible scenario, many people have that as their baseline forecast.

If we have a downturn in the United States, uh, the implications for, for the US fiscal deficit are grim.

We could be, again, easily knocking on the door of 10%, uh, fiscal deficits.

And in that environment, do I think the Treasury can issue? I do, but again, at what price? What do those yields look like? What are the risk premiums? And I think that's the question we're gonna be struggling with in the years ahead, is where is this risk premium going?

Do you think that it is this bond market that is putting pressure up against this administration to come out and tweak and change policy?

I think the bond market has been front and center in this.

I think it's the financial markets more broadly, but I also think it's the discussion with, uh, with, uh, CEOs and what he's hearing, and I think it's political realities.