katrina are interest rates going to drive higher i think weve already got the indication from powell but we have got at least another two rate hikes coming before the end of the year so i think that you really need to trust the fed youve talked about how smart the people in the room there are and i think we agree with that that if theyre indicating that this was just a pause and it was a pause that was done on the margin youve got another two rate hikes coming what do you make katrina of the fact that bonds have priced in the idea of a more hawkish fed hawkish central banks stocks perhaps seemed to just be waking up to that reality whats your view well have a look whats driving the stock market here its been this a trend which is really a deflationary trend if you think about it because it is replacing you a certain amount of functionality that was done by humans often with technology so i think that youve got a deflationary trend thats being recognized in the equity markets and the performance youve had in the equity markets whereas on the bond side youve got a lot of fear here because the fed continues to hike their hiking as you say because we keep seeing these very high inflation points so i think that the equity market is actually being very rational yes youve weve seen in the last couple of days that sell off but i think that selloff is just reflecting a little bit of the interest rate pressures towards the back end of the tech companies earnings so you dont think it necessarily has legs and you might even lean into this idea that certain sectors of the equity market act as a haven now given that they have different factors that are underpinning some of the rally is that correct i think if you take a look at what is driving it we dont have a lot of breath in the s  p rally at the moment youve seen a really big move in the ise stocks but then if i look over at different markets you look over at japan you look at the european equity market the european equity markets theyre still facing the same rate hike cycle but you dont have that lack of breadth in the markets still they are holding up well i think that we need to say that the economys just not as interest rate sensitive today as it is has been in the past we also need to think about it in terms of what the absolute right right you absolute rates are i think a lot of people focused on the rate of change but the level of interest rates that were talking is at a level that is manageable for companies and thats what we need to focus on manageable interest rates that are on a trend that people can predict the trend heres the key katrina i would suggest theres a trend of states healing maybe a little price up yield down what are some cut the other way what happens for example with the bloomberg total return index global us whatever where price gives way what would be their behavior response if we get price down yield up i think if we take a look at whats happening with yields we are really using yields in all of the central banks to fight inflation so weve got to keep and weve got to see some abating of that inflation you showed the chart earlier were starting to see a little tick up in the initial jobless claims and thats the other factor that the fed is very much watching here but everybody that we talk to particularly around the manufacturing economy which is the engine of this economy it is the engine of what is being restored reissued here in the united states is holding onto their labor theyre almost like looking at this new i need to train the next generation so i think as long as we continue to have that labor market strong the fed can keep raising rates in order to fly and fight inflation without causing a significant deep recession maybe we have a small correction but i dont think were looking at having a deep recession here