In This Article:
DWS Group head of fixed income and head of trading George Catrambone speaks with Brad Smith and Madison Mills on the headwinds he sees coming for US manufacturing and wages, while also believing US exceptionalism in the bond market (^TYX, ^TNX, ^FVX) to be transitioning into European markets.
Also catch George Catrambone explain his bull and bear cases for markets (^DJI, ^IXIC, ^GSPC) coming off the Federal Reserve's March decision to hold interest rates.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Talk to me about this line in particular about where manufacturing is heading in the US. You said, I'm not sure the US can structurally become a pure manufacturing economy unless wages nosedive.
Yeah.
Would that force the Fed's hand if we do see a nosedive in wages?
It could. We're just not this Rosie the Riveter kind of situation coming back like Trump may project with this 3% productivity, um, and production kind of coming back. Just things structurally where wages are and right now where we are and especially cutting off immigration. That's ultimately a headwind to coming back to that. Now, maybe in the AI, and that's was sort of the hope until deep sea kind of came along and we'll still see where that goes. So if you're looking for that kind of manufacturing to come back, I think it is in the AI sector, it's in data centers, and it's in that area. I'm not sure it actually comes back to manufacturing. You know, I've talked to Baysbook in the past, the manufacturing looks so bad. PM, global PMIs and PMIs were above 50, so there's something to that. I don't know about getting all the way back to where we were again as a manufacturing powerhouse.
Where does the US exceptionalism trade sit within the fixed income landscape right now?
Well, for the moment, we're passing the baton over to Europe because that's where the interest has been, that's where yields have gone a little bit higher, and that's where the spending is right now, right? Fiscal's coming down here and theoretically going up there. So for the moment, we're going to take a pause and hand it to Europe. But there's another structural question for me. Will they be able to actually ramp up their production and productivity in a way or will ultimately the money funnel back here?
We don't all have the same AI?
From the Not only do we have the same AI, we don't have the same manufacturing as it relates to defense, like Airbus can only do so much.
