Moody's Talks - Inside Economics - A Booming Economy and Bubbles

Episode Date: April 2, 2021

Mark Zandi and team discuss the recent jobs report, bubbles and other aspects of the economy. Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi, I'm Mark Sandy. Welcome to Inside Economics. Welcome to our inaugural podcast. I'm joined with a couple of colleagues today. Chris Duretis. Chris, can you just say a few words about yourself? Who are you? Sure. Hi, Mark. Yeah, that's an existential question. I'm Chris DeRitis. I'm one of the economists at Moody's. I've been with Moody's about 12 years, and I focus on housing and consumer credit issues as well as just the broader macro-macanact. economic outlook. And Chris is more than an economist. He's the, he's going to take my job when I, when I leave. But little does he know I'm never leaving. So he's got, he's got a bit of a problem. I figured out. Yeah, right. And also, Ryan Sweet. Ryan, you want to say a few words about yourself? Thanks, Mark. I'm Ryan Sweet. I've been with Moody's for about 16 years and I'm also an economist. And I focus on the U.S. macro economy and monetary policy. And Ryan is the single best forecaster of real-time economic data in the world.

Well, although you came in second place, I think, last year, didn't you, in terms of forecast accuracy? Or, oh, you did. Second or third. Yeah. Oh, third. What the heck? There's a pandemic. Oh, yeah.

That's right. That's the ultimate curve. Yeah, yeah, yeah, yeah. I forgot about it. There's a little luck involved with that. So this is the team that you'll be listening to every week when we do this podcast. I do think we're going to have guests, though. We'll bring in outside speakers as well.

We've got a lot of folks out there that we'd like to hear from and we'll contribute to this. The way this is organized, at least we're going to start this way. It may evolve and probably will over time, is we're each going to talk about an economic or financial market indicator that we think is most emblematic of what happened over the past week or what the most important indicator in the coming week, you know, what you should be looking forward to. Then we're going to tackle in part two of the conversation a topic. We'll call it the big topic.

Lots of subject matter there to discuss. And today we're going to talk about bubbles, bubbles in asset markets, in the stock market, and in the real estate markets, crypto, commodities, that kind of thing. And then we'll end. I'll give a bit of a monologue, not too long, but give you my three cents about things, just whatever is on top of mind during that particular week. So that's the frame. That's the conversation. Second, 2021. So we just got the employment report for the month of March. And given that Ryan, I think you nailed this, didn't you, Ryan, in terms of the job number? Or you know me, we're off a little bit.

It wasn't spot on. We were close. Wait, wait. Wait for the revisions, right? Yeah. Well, no, come on. What was the number? It was up in 9-16. And what was your expectation?

960. 960. I'd say that's pretty good. Consensus was what? 6.650. So give us a sense of the, I'm assuming this is the number you want to highlight, right? I'm just making, I'm just, I'm not sure, is that right? Is this the number you want to look at?

I think we have to. Oh, we have to. I mean, it's close to a million jobs created in March. And if you look at some of the details, it suggests that weather played a big factor in March. So if you recall February, we got, you know, all these winter storms across the country. And that really reduced employment and leisure hospitality and construction. And that's where we saw a lot of strength in March. and other private services employment

was actually a little bit softer than I was anticipating. So I think we got some big numbers coming far away from an employment perspective in April and in May. Yeah, Chris, did you notice anything in the report that kind of surprised you? Other than the strength, I mean, it was pretty,

look like to me across the board's strength in the labor market. Yeah, really across the board. I was impressed by the construction numbers, but to Ryan's point, perhaps a little bit used by the weather, but still, it's over 100, thousand jobs added. That's pretty impressive. Yeah, I guess the reopenings also played a role.

It looked like business reopenings, obviously, as the pandemic seems to be winding down here, and also school reopenings, right? Ryan, there was some big increases in employment, educational employment. Did I get that right? That's exactly right. It was both in private and in public. But going back to Chris's point about construction, this is also encouraging for the housing market because we really can't build more homes unless we kind of reduce some of these labor supply constraints that builders have been grumbling about for a while. Right. And I guess the ARP, the American Rescue Plan, that's the $1.9 trillion fiscal rescue package. I don't think that played much of a role here, no? No, I don't think so. I think you start to see that effect

over the next few months. But in March, I think it was more of weather-related payback, a reopening, and schools getting opened again. I think that was the bigger. I mean, the ARP was passed kind of at the beginning of the month, but this BLS number is based on a survey

that's conducted during the week that includes the 12th of the month. And since that was kind of earlier in the month, the ARP didn't really have an effect. that's going to show up in the April data when we get that a month from now. It might have had some psychological effect, right? If I know that check is coming and stimulus is on the way, might induce things up.

Yeah, that's true. Maybe on the margin. You did see a modest gain in retail. Yeah, right. And what about the unemployment numbers? Tell us about that. There seemed like a lot of strength there as well. Yeah, I mean, the unemployment fell for the right reason, the labor force rose.

but I mean we dropped from an unemployment rate of 6.2% in February to 6% in March. And the BLS still has this misclassification error where they're saying people are unemployed but at work. And rather than saying that they're temporarily unemployed, so if you adjust for that, the unemployment rate, the actual unemployment rate in March was 6.4%. Yeah. Okay. And Labor Force participation increased as well. But despite it all, I mean, obviously a great number, a great report, we still have a big hole to dig out of, right? We're still eight and a half million jobs down from the pre-pandemic employment peak. In unemployment, just to remind everyone prior to the pandemic, was 3.5%. So we got a long way there.

And in Labor Force participation pre-pandemic was 63%, I believe. So we're at 61.5 as of March. So long way to go before we're back anywhere close to full employment. Do you think the best measure of the unemployment or the employment gap is, you know, where we were pre-pandemic or where we would have been if the pandemic didn't occur? So another way, think about it, if trend job growth pre-pandemic was 200,000. If you extend that out to where we are now, you know, the whole is really, you know, 11.4, 11.3 million. So that's, that's enormous. Yeah, that's a great point.

So that means if you got 900K per month on average going forward. it still take us well over a year to get back to where we should have been if the pandemic had not occurred. So, well, you have a long way to go. But, you know, the thing that struck me in the report was there was, I don't think was there, usually in these reports, you know, if they're strong or they're weak, there's, you know, there's a, you know, there's a something that doesn't look congruous. You know, something, if in a strong report, well, there's some element of the report that's soft. I didn't see that here. Everything looked strong. Did I miss anything?

If we got a nitpick, I would say those that, the number of people that were unemployed for 27 weeks or longer actually increased. Is that right? And the number of people that said their permanent job losers was unchanged, you know, between February and March. And it's still, it's elevated. It's nowhere near what we saw during the peak of the Great Recession. But those are two numbers that I'm kind of watching to see. hopefully they start coming down quickly over the next few months. Yeah, great.

Hey, Chris, what's your favorite most important statistic of the week? What would you highlight? I wouldn't say it's a favorite, but it's one that I think is most important. And that's just COVID-19 statistics in general and the infections as kind of the shorthand. So my number I'm watching is 65,574. That's the seven-day moving average of COVID-19. infections and that is rising, unfortunately, over the last couple of weeks. Not a whole lot,

right? Still well below the 260K that we had at the peak back in January, but certainly the direction is concerning. Something I want to keep an eye on. The vaccination programs are rolling out. That's great. And that's really helping. But I'm worried that we jumped the gun and we start to see these infection rates rise, certainly with the variance, and that could put some cold water on this recovery, right? Confidence could turn on a dime here. People could get scared once again.

So something I'm watchful of. I don't think that's the case. I don't think we're going to go into lockdowns and see a large impact on the economy, but certainly it's a number to watch until we really get herd immunity and the numbers come down dramatically. Right.

But that's more of a risk as opposed to your baseline, right? I mean, or is it? Yeah. I mean, you don't think this is going to certainly not derail things or even ding things, right? I mean, or are you? No, not unless it really starts to get out of control, right? Right. But I guess some point of reference, right?

We're at 65,000 plus cases on average now back in last July, which was the peak of the second wave, when we thought the world was, you know, under a lot of stress, we were at 66,000, right? So just some of that perspective is needed, right? Yeah. Things could change very, very rapidly if we're not careful here. Right. Hey, if you hear my dog yapping in the back here, I'm sorry. There's absolutely zero I can do about that.

So, you know, I know Ryan has a baby that it will show up at some point in these conversations. Chris, though, Chris, all three my kids will make an appearance. I'll make an appearance. So I'm sure the listeners will forgive us for that. Hey, let's move on to the big topic, and that is asset bubbles. And in my mind, a bubble occurs when there is speculation in a market. And what I mean by speculation is that investors are buying the asset with the sole intent of selling that asset quickly. or in the real estate markets, you could say flipping the home quickly with the intent of making a quick buck.

That, you know, they're not buying it for any other reason. There's no fundamental reason. It's not like this is going to be a great investment over the next year or five years or 10 years. It's simply I can make a quick buck here. You know, I can find a kind of the greater fool theory. I can find another fool to buy this asset for me at a higher price. and I'm going to make money. That's a bubble.

Now, that's speculation. And a bubble occurs when you have a period of extended period of speculation. I mean, if it's a short period of time, bubbles take time to develop. We, the speculation has to take on, has to occur for a period of time. So here's my question. And obviously, markets are high. I don't have to say that. I mean, stock prices, I think they just hit a record high yesterday on Thursday, April 1.

Crypto, I was just looking at the price of Ethereum that hit. It's funny because my son was saying, I think we should buy Ethereum. I go, really? So I went on the, took a look, Ethereum was trading at about $2,000 yesterday. And it was trading, I think, at less than $200 a year ago. I go, it's up 10 times. That feels parabolic to me. Commodity prices, you know, they're up very strongly.

Obviously, single family housing prices up a lot. So it goes out without saying asset prices are up a lot. So the question is, let me pose this to you guys, is this a, are we in a bubble? Are there bubbles here? What do you think? Well, how are you thinking about this? Either one of you, what do you think? Yeah, I guess, so the short answer is there are some bubbles.

I would certainly say around that. don't think everything's in a bubble. I would add to your definition, though, of what is a bubble or some of the conditions, right? So it's, it is departure from the fundamentals. Another condition I would add is just lots of new entrants, right? Lots of people chasing the, uh, chasing the euphoria or, or the news. And so when it comes to crypto, I classify that as a bubble solely because I have friends, family, neighbors, relatives, all asking me about it. People who have no connection, or typically aren't investing. So that's, that is one signal that makes me fearful of a bubbling in crypto that this

might be a short-lived period of time here. So you don't own any crypto, Chris? I don't own any crypto. Have you ever owned any crypto, Chris? I have never owned any crypto. Ryan, do you believe that? No, not all. That's my view.

He seems like he's one of these closet crypto guys. He acts like it. He acts very wealthy. Look how he's dressed. I know people can't see it, but he's like wearing this red. What is that exactly that you're wearing? What are you talking about? You're wearing a t-shirt.

I know, but I'm like a gray. You're like a flashy red. What the hell? So, Ryan, so are we in a bubble, Ryan? I would agree with Chris. Yeah, I think there are bubbles in certain asset markets. And, you know, the way I kind of approach this question and topic is not trying to figure out, you know, how big the bubble is, but what are the economic costs when they burst? Because as we all know,

no, no, no, no. I'm not going there yet. You're not, I'm the moderator. I guide the discussion. You got to answer the questions. If you can't answer the questions, you can get back to the bubble. Okay. I don't think we're in a bubble, you know, because, you know, crypto. Oh, crypto. Crypto may be a bubble. But because it's not only, and I'll like what you added. It's not only the speculation. It's not only I'm buying for the for the sole purpose of selling quickly. But it's persistence. This has to go on for a bit of time for that bubble to actually develop for prices to get high enough that you'd say, okay, this is a bubble. But I also like your twist that, and it's not more than a twist, your ad, that you have to,

it has to be broad base. It's got to, it can't be a few investors. It's got to feel like. like there's a lot of investors that are out there doing the same thing. They're all kind of, and you can feel it, right? You say, I got friends and family that are doing this. And you can feel in the real estate markets when you see on TV, you know, ads saying, hey, I can teach you how to flip a home, you know, that kind of thing. Kind of what you saw back in the, you know, pre financial crisis period. Yeah. But outside of crypto, no, I'd say markets are overvalued. And by the way, they should be highly valued, right? Because interest rates are low, right?

And when you have low interest rates, the value of any asset should be higher, right? Because at the end of the day, the value of the asset is equal to the present value of the returns on that asset. So for a stock, that's corporate earnings. So, you know, the earnings, the value of those earnings are higher if interest rates are very low. You just do the present value calculation. In real estate, same deal.

you know, you get rents. So the value of the real estate is ultimately tied to the rents, but the value of that stream of future rents is higher if interest rates are low. The discount rate is low. The cap rate is low. Crypto, that kind of calculation is very hard to do because I'm not sure there's nothing. You know, it's more like a, that's more like a media, you know, if it had value would be like a, you know, like a medium of exchange or a store of value like a currency. So that feels more like a bubble. But in real estate, in equity prices, it doesn't, you know, valuations should be high. And I think valuations are higher than you would expect given where interest rates are, but doesn't feel quite like a bubble yet to me. But you would, now, given what I just said, have you changed your

mind? Do you got these guys, they never changed their mind. But are you thinking about changing your mind after what I think we're in, we're in the early stages of a bubble? Okay. It's not an enormous bubble, but I think it's starting to show signs of bubble characteristics. Bubble characteristics, okay. Here's a provocative question for you. All right. Can you have a bubble? Is leverage a necessary condition for a bubble? No. I'd say no. I'd say leverage, leverage meaning debt that I'm going to go out.

I'm an investor. I go out and borrow money to buy that asset to flip it. That is, in my view, not a necessary condition for a bubble. I mean, we can have a bubble in the equity market and people aren't using margin debt to, you know, finance their purchases. And clearly in the housing market, single-family housing market, you don't see, you know, mortgage borrowing is up, but you don't see strong growth in mortgage debt. You're not seeing that. And of course, lenders aren't going to allow that to happen post-financial crisis. But I would say, and this gets to where Ryan wanted to go, and maybe we go there now, is I think for a bubble to be a existential threat to the economy and say to the financial system,

like back in the financial crisis, the bubble has to be fueled by leverage. That if you have a bubble that's fueled by leverage, that is a bubble that is a, existential threat to the to the economy it's not you know it's not again to answer your question directly it's not a necessary condition for a bubble but i would say it's a necessary condition under most circumstances for it you see how i i gave myself a little bit of an out there that we can explore if you want to but as usual it's a it's a necessary condition for it to be an existential essential threat to the economy. So how did you,

what do you think of that answer? Do you, yeah, no, I'd agree. That's my, that's my take as well. Right. So it also helps to classify which of these bubbles we really care about, right? So non-fundable tokens, right? That's the hot. I can't even call it.

Yeah, exactly. What is that exactly? Yeah, the hot topic. Yeah, hot investment these days. Okay. To my mind, that is a bubble. It says all the signs of a bubble we're bidding up prices on these things that have no intrinsic value. Well, at least not to me.

But so what, right? So maybe it's a few billionaires competing with each other for the rights to these little videos. Okay. Yeah, interesting, but doesn't have economic consequences. Suddenly that market implodes, right? So I think your point about leverage and broad-based leverage and particular. Those are the conditions for me that identify which bubbles we really should be paying attention to versus others that are kind of on the side, just interesting tidbits, if you will.

Yeah, Ryan, any pushback on any of that? What's your perspective on that part of the conversation? Because you want to bring that up. You agree? Okay. Yeah, I agree with Chris. I mean, I was going to ask, do we even, you know, worry as much about the stock market, a correction, you know, a 10% decline. Does that have as much of an economic impact as it did in the past? So our rule of thumb was typically a 10% decline, sheaves half a point off GDP Grove, you know, a 15 to 20% decline,

shaves off, you know, a little bit more than a full percentage point. But given that the economy's going to be growing five, six, maybe seven percent this year, you know, the garden variety correction in the stock market may not pack as much of an economic punch. Throw on top of all that, you know, earlier a trillion dollars in excess savings. Yeah, I agree. I agree. I mean, I, before the pandemic, I would have said, you know, a decline in the stock market, a sustained decline, a significant

decline, you know, a correction of 10% or a bare market of 20% would have a significant, meaningful consequence on the economy through these so-called negative wealth effects, you know, because, you know, particularly boomers in their 50s, 60s and 70s that weren't prepared for retirement, you know, they got nailed by the declining stock values. And by the way, they were hanging out in the stock market to a much greater degree than their parents did because they, that was the only game in town to make any kind of money, that the negative wealth effects would be very significant and serious. Now, it weirdly, it sounds weird, but I know it's ironic, I think is the right word, that the pandemic has changed all that because high-income households,

you know, folks in the top quintile of the income distribution, obviously particularly top-decile of the income distribution, have saved a boatload of cash during the pandemic. I mean, we're estimating the excess savings, you know, savings above which would have happened if the pandemic had not occurred of about $2 trillion. And of that, three-quarters goes to the folks in the top. quintile of the distribution. That's one and a half trillion dollars. That's cash. That's savings. That's in cash. It's in checking accounts, savings accounts. That's going into housing. That's going into the equity market. So my sense is if the stock market, if it is overvalued or if it's a bubble and

let's say it corrects, I don't think it's going to have the same negative. It'll have a negative consequence, but it's more on the margin. It's not that big a deal that as big a deal as it was before. I agree with him. You agree, yeah. So, you know, the way I think about it is, and I think, you know, one of the biggest risks to our kind of baseline outlook for the economy is we see a major correction in asset markets because markets are overvalued and debatably bubble-like.

But I don't think that's existential to the recovery, given everything that's going on and given all this excess saving that's out there and all the other sources of growth that, you know, will support the economy. So it's a risk, but it's not an existential threat. It's more it'll just change the contours of the outlook for the economy, the growth rates for the economy going forward. What about the housing market? I mean, if you look at Chris's map of the overvalued, undervalued by metro area,

it's starting to, you know, some red is creeping in there, which is a little bit concerning. I'd say, Ryan, your house is overvalued, but mine is definitely undervalued. Yeah, definitely. I don't know, Chris, you're the housing expert. What do you think about that? My house is definitely on track, appropriately valued. Well, given that you're a crypto investor, you probably have like three houses out there by now for us.

I'm looking at some farmland, though, because. Oh, are you really? Oh, I've got to talk to you about that. Before you move on, before you ask that question, do you guys, have you guys, are you given what you just said, are you reducing your stock holdings at all or not? Or you just look through this. I mean, how does it change your behavior?

Or has it changed your behavior at all? Are you putting it, really put it this way? Are you putting your money where your mouth is, is my question? No. No. No. Okay. All right.

I got a plan for colleges that, you know, this is 15, 16, 17 years down the road. So I can ride the wave. You're looking through it. Okay. You're looking through it too? Yeah, same here. Same here. Okay.

Because he has all his money in Bitcoin. I know. I know he doesn't worry about anything. He doesn't worry about anything. Yeah. All right. What about housing? Very quickly. What about housing? Single family. I think, yeah, certainly there's some risks there. But you look at our forecast and our national overvaluation under valuation. Currently, we peg it at about 7% overvalued, which sounds about right to me, right, relative to trend, relative to long-term income growth. Yeah, we're at where we are. A bit high, certainly, and I think there will be some correction, but I'm not expecting any type of immediate crash, particularly because of the leverage, right? Yeah. It's very different than the last time around. So I think nationally, I don't see really a bubble definition being being bantied about, but certainly certain markets, you could be a little bit more concerned about the very aggressive

growth and some of the behavior that went on during the pandemic, does that change? We go back to our old ways and suddenly, right, you don't have as much demand out there. Yeah, but I would say if we have another year like the past year where house prices grew at a double-digit pace, we may be singing a different tune because things do feel like they're getting pretty frothy, right? I mean, I think you're the one who told me there are now more real estate agents than there are home sales. Did someone?

Yeah, yeah, that's right. It's from the Wall Street Journal. You got some other signs out there too, right? You look at just a number of vacation homes, second homes. That's the latest statistic, right? Those are at a very elevated level as well. It looks like you have people who are maybe buyers. They're buying a home that they want to buy,

but they're not selling their own home because they're expecting the appreciation to continue. So some of that speculation. My expectation, though, is that we get a little bit higher interest rates towards the end of the year. We get the foreclosure moratorium expiring. we get more supply on the market. Some of these vacation homes, second homes, right, will translate into additional sales, and that's going to cool things off.

So I think there's risk, certainly, but I'm not overly concerned. Yeah. I think we'll have some questions. If I told you, though, house prices rose, another 10 to 15% over the next year. Then you're worried. Yeah.

Okay. Yeah. This just feels like a very unhealthy housing market. Really? Unhealthy housing market? be the house price gains. Because a lot of it's being driven by, you know, the exceptionally low inventory.

I mean, we're less than a million existing homes on the market. And they're selling 20 days each of the last two months. If you look back at pre-pandemic for January and February, they'd be selling 44 days. Yeah. Things are just flying off the shelf. The one thing that gives me a little bit of soulless,

it goes, you know, because it's a corollary to your inventory point that they're low. is that supply is very constrained, right? The vacancy rate across the housing stock for sale and for rent is now as low as it's been in, I don't know, 30, 35, 40 years. And it's still falling. I mean, the level, new construction is picked up, but the level of new construction

is still below, you know, the underlying demand for housing. And so that vacancy rate is low and still headed south. So it's a very, it feels like a very different market to me than the market. market, you know, people want to draw correlaries with the bubble, the housing bubble, and that was a bubble before the financial crisis a little over a decade ago. And lots of differences, one is around mortgage debt and mortgage products, but the other is just the physical supply, you know, back before the financial crisis, the vacancy rate was at a record high. You know, overbuilding everywhere. And here, that's not the case. Certainly not the case for low and mid-priced homes. Maybe at the high-end,

you know, high-end luxury apartments maybe, and I'd be a little bit nervous about a lot high-end luxury apartments in big urban centers that might get hurt by work from anywhere, dynamics, that kind of thing. But, you know, that gives me a little bit of soul is that, you know, if we see any kind of correction in the housing market, it should be relatively modest, at least at this point. I don't know what you think about that. I'd agree with that. Yeah.

Okay. Yeah. So on the, any final words of wisdom on. On the bubble question, I mean, we can go on and on and on. I'd say on the crypto, I'm with you. I, you know, it feels, I don't know. You know, I don't think it's a currency, right? I mean, a currency is either a store of value or a medium of exchange.

And that only works if the value of that currency is stable relative to everything else, right? Because then people don't, if it's going up and down and all around in value, no one's going to put their money in there as they're not going to save in crypto they're not going to use it as a medium of exchange not going to use it to buy and sell things because they're worried that the value of it's going to change you know literally overnight and because of the way crypto operates I mean the supply of the crypto is kind of on autopilot you know determined by a computer program and the demand fluctuates it's I just don't see how you get stable prices you know stable values If you don't have stable values, again, you don't get the store of value, you don't get the medium of exchange, you don't get a currency. So maybe the technology shifts here, and my guess is it probably will over time.

But at this point, I just don't see it displacing any kind of the dollar or any kind of fiat currency. I don't know how you guys think about that, but that's kind of my perspective. Yeah, I'd agree with that. I also think it's been flying under the radar to some extent from a government. perspective, but the fiscal authorities around the globe, I think they're going to take a closer look and clamp down if it's leading to evasion or, you know, trading illicit goods, what have you. So I think there's that risk out there as well, that suddenly there's some clamp down from government authorities. You have central banks also exploring their own crypto-like currency,

so a dollar coin, if you will, backed by U.S. dollar. So that, I think, could satisfy the second requirement there in terms of facilitating transactions. So we might see some elements of crypto. It's good technology. It's going to get distributed to other parts of the economy. But in its current form, I don't see how these coins last for very long. Yeah. Well, I mean, I find it odd that you're bad-mouthing, the thing that has made you so wealthy.

I just can't figure that out. I was going to say that next time we have to dig deeper into Chris buying farmland. That we are definitely going to explore. Do you think he made that up or do you think he's actually out there buying farmland? I don't know. I'm thinking about it. Chris doesn't joke around, actually. No, Chris is very serious.

Oh, my jokes are on a whole other level. I'm sure that's true. I'm sure that that's definitely true. All right, well, thanks, guys. Hey, I just, I just want to kind of wrap it up here. Thanks for the conversation. And I do think the bottom line, based on the conversation, is that the economy is often running. It feels really good. I think the words I've been using is rip-roaring. I think we're going to have a rip-roaring economy here, at least over the next six, probably the next 12, and maybe over the next 18 months, you know, there's a backside to the American Rescue Plan where things are going to be going to. slow up later in 2022. But that's, we'll see. There's a lot of script to be, uh, written here. And I'd say if I had to put my finger on the one thing that could, I don't think it's going to undermine the recovery. That's going to be pretty tough to do. But the thing that could change the contours of our forecast, you know, our outlook, which is, you know, obviously very upbeat and

positive, is a correction in asset markets, you know, interest rates are going to rise. And as interest rates rise. You know, that's going to put downward pressure on stock prices and single family housing values and CRE prices, commercial real estate values, maybe even crypto, commodities. And, you know, we could see a bigger correction than, I think, you know, we're counting on anticipating. And that could do some damage to the economy. By the way, you know, that's kind of sort of what happened back after the financial crisis. Remember 2013, the taper tantrum? You know, that's when the chair, then Fed Chair Bernanke, kind of didn't prepare the markets for the end of quantitative easing. Interest rates jumped, and that did do some damage to the economy.

Didn't push us back into recession, but it did cause the economy to slow up a lot. And that's the risk here, I think, you know, going forward that we see something like that. But, you know, I think that's on the margin. And I think there's a lot of other good fiscal policy coming. The president unveiled last week, the American Jobs Plan, that's his infrastructure plan, feels pretty good. We did some analysis on that. Maybe we can talk about that in our next podcast or one of the ones that are coming up. But very much enjoyed the conversation. Thanks. Chris, you know, easy on the spending here. You know, take it easy. Thank you for joining us in our inaugural

podcast. Hope you, you join us in our future ones. We're really looking forward to it. Thank you.