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Right now Francis Stacy joins US Optimal Capital Director of Strategy. We got Scott Redler, the T3 Trading Chief Strategist. Welcome to both of you. Thank you for coming. Scott, your thoughts on what the markets are panicking about that that rate cuts are delayed, maybe denied this entire year. What do you think? Well, I wouldn't quite say panicking. You know, we're down about 1 to 2% off the highs in the S&P after a 10% move for the first quarter and December, the market said we were gonna have five rate cuts. So this might be just profit taking. Might be a natural bump, nothing to panic over. Well, it just, you know right now inflation is sticky and every time they try to ignore the data that's been coming out, they've been doing a good job. But maybe this time it might be a little tough as we're now in the second quarter, you know, like I just said, we're up 10%, the street said four to five rate cuts and now they're talking maybe 1:00 to 2:00. So it would be actually healthy if we do pull in two, 3% off the highs to refuel the actual move that maybe we could see later this year. But if there are no cuts, Francis this year? No cuts, OK, I'm. I'm officially predicting the end of the world. No. OK. Let me try to just put some common sense into this discussion. OK. Number one, you've got the money supply, You've got liquidity in the economy against goods and services. This is a ratio. This ratio determines inflation versus stagflation versus deflation, right. And the Fed is supposed to control the money supply and bring the money supply down juxtaposed to goods and services, and that's supposed to bring prices down. What has happened is despite the Fed tightening, you know, raising rates at a record rate and also rolling off. The balance sheet is you've had fiscal spending that's come in and re liquefy the economy. Banks stopped lending last year but you had private credit that came in and so that nothing defaulted which would typically occur in a fed tightening cycle. They've done way more hard landings than anything else. I think there was only a soft landing once in history and then you had people who would normally use their savings and incomes to buy groceries. 60% of the populace living paycheck to paycheck putting this on credit cards. OK when you put it on a. Credit card that brings new money into the system. So the Fed is reducing and all of these other things are shoving the money supply harder, which puts the Fed in a horrific position. And Powell quintessentially has a fork in the road. He either preemptively cuts because of the long and variable lags of monetary policy and the fact that we do have meaningful inflections and foreclosures, bankruptcies and credit card defaults, or he waits until we hit the wall. So that's that is is damned if he does damned if he doesn't right So so if he if he does cut in an environment where people are looking at some of these latest is sticky inflation data as you alluded that would look like you know he's he's dropping the ball if he hikes or keeps rates where there are for a while that further fuels the argument we're disappointed that you're not cutting in other words he can't win well he he's doubted dependent and I think he's going to go meeting by meeting which he said so we'll see. The environment, we'll see how high does oil get we'll see but he must be fearing over over doing it right that if you don't cut that and I understand the reasons why didn't he say inflation was transitory? Right, exactly. But I I think that he's he's in a tricky spot but he's trying to thread the needle. I'm still kind of in the in the soft landing camp. I think we might need some bumps and I think that if we do see a correction in the S&P like right now we're down 1.2%. If we could go down to three 4% through the summer. I'm still about 10% on the year, right. So exactly. So it'll it'll give him actually a little fuel that he can, he can cut, he can cut when the S&P is making all time highs, he can cut you know when you have inflation the way it's going, this sticky data points that we've seen. So at this point you know I think we we have some time to let things sift through and there's still great equity rotation. You still seeing you know the XL perform. We tech sector still hasn't corrected after an enormous move, it's in a channel we still have leadership. So the market. Rates are backing up and then the over which the Fed has no control, I mean it can try to talk them up and down and all but but the market rates are still going higher. The mortgage rates will be going to 7 1/2% likely next week if this holds where these 10 year is. So there's your inflation there too, right? Absolutely. The thing is, is that the markets are not reacting to rates anymore because the markets have gotten it wrong so much. The bond market, I've gotten it wrong. I have a few scars. You're definitely more positive than I because you didn't listen to Larry Summers earlier saying there might be a rate hike on the table in the stock market could crash. His words, not mine. Well, didn't didn't like two years ago everyone said we're gonna be in a recession. Yeah. And that there are a lot of, you know, analysts that came out and they were talking about major corrections and we've been up 29% since the October low. You sound still very bullish. You sound. Much more cautious. I think that you know I'm with Scott in the sense that nothing is gonna break this momentum until it does. Markets are not having a healthy normal correlation to or uncorrelated to rates. And so they're counting on these other anomalies that kind of made rates not matter as much. And one of those shoes drops, Neil, either the fiscal spending falls off of a Cliff because we have no demand in the treasury markets which is why gold is going through the roof or you have you know. Some wall with commercial real estate or you have credit card consumers falling off that, you know, new liquidity coming into the system that's counterbalancing. the Fed tightening is no longer there than I think rates will matter again. So this is just a bump for the time being or the sign of you know, correction or worse might clarify a little bit because it all depends on your time frame. You know, if you're an individual in a job or you have a 41K, a lot of this doesn't matter to you. You put your money in every single month, you Max it out over time. You cost averaging. You'll do just fine. You you survived the financial crisis, the pandemic. But if you trade for a living for P&L or quarterly, you better be on your toes. I do think in the next week or two we're at this crucial time period where the S&P cash, we were talking off offline about it saying 5150 in the S&P cash. If that doesn't hold within the next multiple sessions, all bets are off. You could see not all but like 49148 hundred in the S&P cash which again wouldn't be the end of the world after the size of the movie that we just seen. But if you trade for a living and you get caught. And you're not hedged or you're not in some decent amounts of cash. You know, all of a sudden you could be behind your high watermark and then it gets complicated for you real quickly. Ken Fisher here with us not long ago, the billionaire investor, he says he's very bullish on the remainder of this year. Yeah, kind of unpredictable about next year, but what do you think? Well, the whole thing about Fed tightening in the hard landing would be a credit event, right? And he's very bullish because all of these liquidity sources look like they're going to continue. And the liquidity sources, presidential election year. And then there's that. Yeah, boy, lucky pal he's got. Those optics to consider. Again, he cannot win or lose for the job. Alright guys, thank you both very much. They're very well explain.