Yes.

There's certainly some unconventional policy out of the Treasury last week, but I think the market gave its feedback on that policy very quickly.

The Treasury's had a stated goal of keeping long-term rates down since the start of the Trump administration.

Clearly hasn't been very successful in terms of feedback.

The market's been pushing yields up on concerns about fiscal sustainability over the past year and a half.

We saw a quick reaction in Treasury's favor, where 30 yields came down.

Twenty-four hours later, they were back up at the same level.

Do you think that the market is still overly optimistic about the geopolitical environment as we talk about, you know, the concentration risk and the need to diversify outside of the U.S.? How does geopolitics play a role there?

There's others like myself who said, why do anything at the moment just based on some of this uncertainty? But, you know, so what's your call there? And do you think Kevin Morse will actually have any kind of meaningful early impact on the Fed Reserve policymaking?

These are all the considerations you just elegantly rattled off are exactly the reasons that I made the point earlier that the fence job is as hard as it's been in my lifetime, because they are being pulled in opposite directions in a very meaningful way.

You mentioned demand destruction.

From all my talk about inflation, you might think that I think they just need to hike, hike, hike right away.

But because it's a supply-driven inflation, I am very worried about the feedback to demand destruction that would result in lower growth and perhaps call for easier policy overall.

In my own judgment, the balance of risks here, given the magnitude of supply constraints against the backdrop of a robust American consumer and robust American corporate sector, is the policy should be a little more restrictive to try to tone down some of that demand in the face of these big supply constraints that would otherwise have a very significant impact on the cost-facing American families and American investors.

That said, it's by no means a clear call given the risk to demand that we're going to see in the near hand.

an approach that I have a lot

Given how structurally impaired EM at the index level has been for the last decade and more, would you be overweight or underweight emerging markets for the next 10 years?

I'd be overweight on a three-year horizon.

I'd be overweight on a 10-year horizon.

And it's a big part of what we're thinking through at Lazard in terms of how we map these supply-driven macroeconomic and geopolitical developments.

into global asset allocation.

What I'd say first is I think the era in markets where we can talk about EM is one cohesive thing.

Yeah, that era is ending very quickly.

Yeah,

So-

...

so as the chief investment officer in an asset management business, h- what's the conversation you're having with, with your portfolio managers these days? So what we're looking at is the disconnect between where, where economic fundamentals are telling us that oil's gonna go, that companies that are linked to the oil price, the companies that are linked to other non-oil imports coming out of the Strait are gonna go, and what markets are saying.

And we're still concerned that markets are much too sanguine about these shocks, much too sanguine about inflation in general, in an environment where the fundamentals on the ground don't seem like this is wrapping up any time soon.

How do you approach that, that big, big theme?

Well, look, at Lazard, we're very optimistic about the reality that AI is gonna meaningfully change not just our working lives but our investing lives for the rest of our professional careers.

It's easy to look at valuations of AI names today and say they're too expensive, you gotta just back off, but I still think investors, um, you know, w- white collar employees up and down the income stretch from across and across industries haven't really found the transformative nature of the technology still, even a couple years-

Alexis doesn't agree with you, but that's different.

[laughs] I think the sharpest investors are the ones who are willing to change their minds when the facts on the ground change, and what we've seen over the last seven days is a pretty dramatic rethinking of the global supply picture for energy in particular.

We've seen a staggering surge in the price of oil as traffic in the Strait of Hormuz has slowed down as dramatically as it has, but I still think markets are thinking of it like a short-term disruption.

I think there's still a little bit of recency bias from the 2025 Iran episode, which is fundamentally very different from this one, and I still don't think markets have fully appreciated the cost to global growth, to global supply chains, and to domestic inflation here in the United States from a persistent disruption of the Straits.

Yeah.

The way consumers spend, it's really driven by the top of the income distribution.

The way businesses invest, it's all concentrated in AI data centers.

We have a very concentrated set of demand factors on both the consumption side and the investment side of the US, and that's contributed to strong overall growth, but it's also more fragile than this level of economic growth normally is.