So what's driven that shift? And like, how serious is France's fiscal problem? What exactly is going wrong in France?

Yeah.

So Fra- France has, has obviously been in the headlines the last few weeks, um, and it's in the headlines for a variety of different reasons.

But I would probably keep it simple and say, uh, the market is getting increasingly concerned around the trajectory of France's deficit and high level of borrowing.

And then mixed in with that, early next year in April, we have some presidential elections, and the two leading candidates at the moment are quite polarizing.

So the bond market, particularly European bond market, is starting to differentiate French sovereign risk.

Now, this is not the first time.

Well, what do we think the ECB's posture is? How are they viewing this? Uh, what, what, what kinds of triggers might cause them to take action? And if they did so, what kind of action could they take?

Tell me a little bit about how the backdrop, which we've heard about from Kieran and also which David was talking about, how does that inform your thinking when we're looking at the Fed and trying to second guess Fed policy direction, for example?

Well, in a way, AI has been having quite a big impact in fixed income markets or rates as well, because as David just touched on, the amount of CapEx has surpassed everyone's expectations over the last two years, and it has had a meaningful impact on particularly U.S. growth and in other economies as well, where there are big investment projects underway.

So for the Fed and monetary policy, clearly growth is an important factor in their policy deliberations.

But then at the same time, We've been dealing with elevated inflation for the last five years.

There's obviously been a number of different drivers keeping inflation elevated.

In the beginning, it was obviously pandemic effects, maybe too loose monetary policy.

And then As things have progressed, we've had tariffs.

What do you make of that, Fred?

Um, perhaps you could talk us through some of what's been driving that, and what do you think about the outlook, um, both for the level of yields from here, but also the shape of the yield curve?

Yeah, sure.

Thanks Kieran.

Uh, and thanks for having me on today.

Um, so look, as, as Andrew touched on, um, you know, growth inflation, central bank policy is, and always has been the, the primary driver of long-term interest rates.

And expectations around the future path of central bank policy is obviously incredibly important.

But in the last few weeks, uh, life has got pretty exciting for us bond nerds because, as Andrew also said, um, you know, there hasn't been a lot of change in central bank expectations, particularly for the Fed.

Um, does that change how investors should think about investing in fixed income, uh, over the longer term?