Amundi-CIO Kruse: Darum solltest Du den Zoll-Zirkus ignorieren und diese Märkte sind jetzt attraktiv

0:00 [Music] Hello and welcome to a new video from Mission Money. Yes, the first half of the year is over. It was a good first half of the year, one with a lot of twists and turns. At the end of the day, however, it was quite decent. But, of course, the problems are still there and we want to see what might happen in the second half of the year. We have an exciting guest who has been with us several times. Um, he's obviously one of our favorites, so you can say that. He is normally CIO and Managing Director at Mundi Germany and today, as always, he is trying to explain to us what the world of tomorrow will bring. I say a warm welcome back to Mission Money. Thomas

0:45 Gruse. Thank you Peter and thank you also for the nice compliments. Sometimes I have a polite moment. No, of course not. Um, yes, the first half of the year is over. Um, at the end of the day it was quite a good one, one wouldn't have expected that , around Liberation Day and the like. Exactly. Well, I'm really thinking that Liberation Day was actually a turning point, one that we could have seen coming , but that we did n't really give much importance to at the beginning, especially when I think about February and March. Then there was a sharp decline in April, which was also quite significant by historical standards . I believe the biggest two-day drop in the S&P 500 since World War II. Um, nevertheless, we've caught up on everything now and the topic seems to have faded

1:32 into the background a bit, I would say . Everyone has become a bit more comfortable with the issue: okay, we now have an average tariff rate for the US of 10%. Now perhaps we can phase this out and leave it at this tariff rate. Yes, that was a bit of the tenor that we have seen on the capital markets in recent weeks . So and then we have the last few days , we are becoming more detailed again, like in school times, which actually fits in quite well with the year, just before the summer holidays, blue letters are going out into the world with completely different numbers. Yes, exactly. And I think that this is now ultimately bringing this topic to the forefront again everywhere. On the one hand, I would say to the capital markets, of course, that it was not such a deal. This

2:19 July 9th was actually the date we had in mind, and it was initially extended. And of course you might have asked yourself, what is behind this announcement? We won't lift the tariffs until August 1st, um, we need more time for the negotiations, but we're on the right track. That would be the positive formulation. Or, um, are we not yet where Donald Trump would like us to be? You may now have time to think about it again. He now goes on to give us the second interpretation, namely the negative interpretation. Um, you're going to get a letter now, and it won't be what you imagined, but you still have time until August 1st to negotiate and provide me with some evidence. And you can see that I mean it seriously . Canada has sent a letter , Vietnam has sent a letter , both are certainly at a level that neither country

3:05 expected. And for me, that is also a bit of a message to the EU. If you don't want a letter like that, move. Mhm. Or Brazil, we just talked about it in the preliminary discussion , where, probably not so much for trade strategy reasons but for whatever reasons, Budd Bromance and Co. suddenly come around 50%, which is not a good thing because, I believe, it is an important copper supplier, which the Americans definitely need, but it also shows that he is capable of irrational decisions and gives him additional weight in these negotiations when irrational weight is involved. Of course, it is always a bit of a snapshot in time because it is now

3:50 popping up again. Um, but is this something that could dominate the second half of the year ? So, do we believe that everything will be done by August 1st? It probably won't be finished like that, right? And I think one would also have to say that we do n't really have many fixed deals between individual countries. These are just a handful. Yes, this will certainly take a little longer. Nevertheless, I assume that there will probably be some surprises on August 1st and perhaps even some extensions so that an agreement can still be reached, as we saw what happened with China when there was a tariff escalation. Perhaps we have gone too far into this topic and have

4:37 realized that, okay, as far as we have gone now, there will be no more trade, or rather , there will be shortages, there will be bottlenecks , there will be supply bottlenecks, even in production in America. This affects us not only in terms of tariffs, but also in terms of price levels in America. It also affects us in production. That's not how it works. So, we had to go back. Um, I think that was a learning moment, that you shouldn't let things escalate too far. Still, 35% now for Canada, that 's something. Um, the US is Canada's strongest trading partner. So this hits Canada hard. I think, however, that this will not be the final word and that there will be negotiations afterwards. So, this topic will remain with us and, interestingly, we

5:26 covered the topic in our half-year outlook - translated, it would mean, in principle, blocking out some of the political noise and concentrating on the strategic position, because this topic was so dramatic, so short-term and partly also associated with a brief increase in volatility. So in that respect, we're actually looking a bit ahead into the second half of the year and positioning ourselves for what will happen in the long term. At short notice, we pointed out that this very topic of customs policy on July 9th was still our topic at the time because we published it in June and could actually bring about some changes. So, the main scenario went in that direction. It will now come out somewhere around 10% to 15%,

6:12 without going into detail, that of course means more volatility. Yes. But that there will then be a calm somewhere and this calm is that there is an economic downturn in the USA, no longer the 2, come on some economic growth that we had, and also not the 2.1 that we originally expected for 2025 , but also no recession, which we certainly assumed on Liberation Day . So looking through that, you say, okay, growth in America is coming back, but it remains positive growth. This topic is at least a finding that is valid in the medium term. Mmm. And I think we've seen that quite clearly over the last couple of months, that the market has become relatively resilient

6:57 , because a TAC trade will settle down again at the end of the day anyway . So, for the markets in America, the first half of the year has been going well towards the end, I would say. What we are clearly seeing is the issue of debt, the issue of trust in American politics and trust in the American currency, and also the fact that a lot of money is actually being withdrawn . This can be seen best in the decline of the dollar since the beginning of the year, somewhere around -1% against the euro, and the euro is no exception; the entire dollar index has fallen. So from that point on you can actually see the impact most strongly, but as I said, things aren't looking so bad economically at the moment and the lower dollar is at least bringing

7:43 robust profits to American companies that export heavily, so that the profit momentum isn't affected in that respect. Um, that fits, of course it fits in well now. One of the things that the Trump administration has actually already delivered, as promised in quotes, is The Big Beautiful Bill, with tax breaks, and we've all been following it closely. At the end of the day, is this a curse or a blessing for the American economy? Good question. Well, I think the idea is, first of all, that this taxation, which would have expired in 2025, will remain low for companies. This is certainly good for the economy, without question. And it is also, if you say, uh, America wants to attract companies to the United States, an incentive without question. Um, the

8:30 other expenditures that are now being made in addition, in total it means that we have a debt for the coming years of around 6 to 7% additional debt each year, measured against the gross domestic product. Yes, if you extrapolate that over the next 10 years, and we originally assumed that we would go from the 36 trillion US dollars in debt that we had at the end of 2024 to around 50 trillion by 2034, then we can certainly add another 3 to 5 trillion on top of that. Um, we already had a debt, sorry, an interest burden of 1.1 trillion. Um, that will develop significantly upwards and we do expect that we will continue to have good economic growth . Well, now it's not

9:16 the 2% plus anymore, but always 1.6 to 2%, maybe somewhere around the average. Nevertheless, we end up with a debt ratio that is approaching 140% of gross domestic product. That is an issue. Um, and as I said, the dollar on the other hand, that 's perhaps something that the US administration also wanted to achieve, a weaker dollar. Um, that helps in part. Let's see, um, to what extent we can stop people from losing confidence in the US dollar as a reserve currency, because that's essentially a red line. Mhm. Um, and of course you have to say in your calculations, I remember some quotes like that, we'll soon be swimming in so much money that we won't even know how to spend it. Um, of course, in relation to the tariffs that

10:01 balance everything out. Well, but of course that's not right. So, when I said 6 to 7% new debt per year is what we need . Um, even if you were to calculate the customs revenue at the current level of 10%, then we are talking about 0.3 to 0.5% additional revenue that was not included in these 6 to 7%. So, we might reduce that by half a percentage point at best, from yes, if we are positive, from 6 to 5/b. That's still enough. Mhm. Um, well, we have to unpack the basic types again, don't we? make 50% cell everywhere. Well, if he were to make the cell 50% everywhere , then of course he would increase inflation, then consumer prices would rise, then he would have an impact on the economy. Um, then maybe we'll have less new debt because the customs revenues will be there, if

10:47 the trade takes place at all. Uh, on the other hand, but as I said, the gross domestic product of bread will then increase significantly less and you will get back to at least 140%, if not more. The uh you mentioned the weakness of the dollar . It is, of course, part of the plan to weaken him a bit . Um, I don't think the plan was for it to be so much so quickly. I don't know at all. I think, as I said, what he perhaps didn't expect was that the issue of reserve currencies would come up somewhere and it is a fine line that we are walking, also with the issue that on the one hand he would of course like the US Federal Reserve to lower interest rates in order to stimulate the economy and in principle to be able to offset some of the

11:34 price effect that we are seeing with consumers . Um, that was certainly one part. On the other hand, by dismantling Paul now , he is actually starting this discussion. What kind of trust do we still have in a central bank that is under such attack by its own president ? And you can interpret or speculate as you wish. But if you look at the last minutes, there are some people who dissent from Jerome Powell's decision and who are in favor of interest rate cuts . Now you can think about whether this is the pressure that Donald Trump is putting on people who might also want to get involved and become the next chairman. Um, it just works in some way, even though he

12:20 keeps insisting that he won't replace him in advance. Well, Jo and Paul's contract expires in May 2026, but if he essentially disempowers him beforehand, he won't be doing himself or the currency any favors. Mhm. In this scenario, do we have to fear that Fett will become weaker in Paul's succession because she will be filled accordingly? That's a good question. In the past, this was never really the case. No, that's exactly what I'm talking about. The independence of the US Federal Reserve has always been a guarantee for the currency. The trend that we are seeing now cannot be reversed even if we now essentially have a new

13:05 candidate. We will probably have to assume that this candidate is influenced to some extent by Donald Trump's grace, and that this issue of the independence of the central bank has therefore been touched upon, at least for the time being during Donald Trump's term in office . The next election will then decide how the next president will deal with it ? What is his ambition for the currency? If one wants to have clearly established support for the reserve currency, then one will emphasize the independence of the central bank. But Donald Trump is turning this back by saying that we now have a new fat man, the independence of the central bank is guaranteed. Well, that also depends on the person who is perhaps being discussed somewhere in the back room at the moment, and names like that are being

13:50 passed around. If it is one of them, then no one will believe it. If someone completely different comes along who you might trust to do it, then yes. Mhm. Yes, the probability is quite high that it is someone who supports the right wing of the Republican Party , otherwise it won't work. And Donald Trump has never made a hero out of it. Well, when I look at how he filled the Supreme Court , it was clear. Mmm. Yes, of course it is this attempt to undermine the institution because we can actually do everything better and that's why they are just in the way. Yes, well yes, you have to leave it like that. We are not discussing what this means for democracy. That's not our big topic today. Um, is the weakness of the dollar something that

14:38 European investors need to keep an eye on over the next 6-12 months? Certainly. Well, we did have a target which was around 120. However, that was a forecast from, let's say, the end of May, the beginning of June, when we essentially gave our half-year outlook . Back then we were still around 114, 115. So it's moving relatively quickly, now we're almost at 118. Um, accordingly, a currency forecast like this is always incredibly difficult, but the tendency is that we believe the euro will continue to gain in importance against the dollar. We also see it simply underpinned by capital flows. Um, if I may give an example, in September last year we actually still had net outflows in Europe. Since the beginning of the year,

15:26 capital has been flowing to Europe month after month. So basically, if you look at the annual rate , which was around 40 billion at the end of May , then that's a trend that has tended to go up month after month . America, on the other hand, had inflows of around 10 billion until mid-February and since then it has been running parallel. Well, I do n't want to say plus-0, but on average that's probably about right . Um, now you could say, is this a gain for Europe on the one hand or is it actually a loss for America? I would say it 's both, right? Well, we've experienced a number of things, and funnily enough, in mid- February there was also Deep Seek, the topic of Magnificent Seven, which definitely reached an area where you could say that we're

16:11 dealing with an exaggeration here. The McS7 issue has been resolved in my eyes. Individual companies continue to benefit. Nvidia is also rightly valued at $4 trillion . Um, but this Deep Siege issue has shown that we should actually invest more in AI . The development of AI is not the topic in itself. This can also be done with fewer resources and therefore, in principle, money has probably been lost. The weighting of the USA in the MSCI World, at 72%, tended to be a bit too high. The money is coming out and of course the dynamics that we have seen in Europe are helping to attract the money that is fleeing America. So pull in a little bit, give in a little bit . Mhm. We did that, of course, at our live event at the beginning of February,

16:58 we already talked about it , you and also Timman and Jach on stage. All three of you have been in the pro camp for a while now, and we've talked about investing in great detail. In that sense, it worked out very well. Yes, basically, as if at the push of a button, actually from mid-February. Uh, Europe's outperformance compared to the Americans. Um, now things have become a bit more relative now that America has caught up a bit. Um, does it still last longer? It depends a bit. I think, if we look at the middle of February, what we saw was that Germany was quite prepared to tackle the issue of the debt brake. Um, and actually even beyond measure

17:43 , I don't think we discussed at the time that we would have defense spending in Europe of about 5% of gross domestic product. Um, first of all, that's a lot of money being invested. But this is also money that contributes a little to Europe's independence and creates more sovereignty, allowing it to make its own decisions and not be dependent. That is certainly a fantasy, um, that Europe is currently supporting and is also attracting funds. What needs to happen now is that actions actually follow. Um, and not just in individual countries, but also in a concerted manner, so that this sovereignty is exercised, one 's weight is thrown into the balance , um, decisions are made that

18:28 should be very positive for the economy. The ideas that the EU Commission had in principle during Mrs Vonderlein's second term in office must now come to fruition somewhere . It's not something that comes quickly, right? So, if I look again at our half-year outlook , we are predicting growth of 0.8% for Europe this year and, to me, still a bit astonishing, 0.8% for next year too , I honestly admit that. Not a game changer. No. And if I give in accordingly, what is that? um Germany, what we basically have in the infrastructure package and also the defense spending, that has to make itself felt somewhere. Yeah right. Um, but we want to see these actions first and then we are also happy to significantly increase economic growth for Germany.

19:14 So far, we are only expecting 0.5% for next year . And that just makes up for what is actually lost in gross domestic product growth somewhere in Spain . They are coming back significantly. Yes, we really need initiatives that actually benefit the economy. Mhm. It has to be resolved that everything we've come up with so far in ProA during the investment period has always been based on the principle of hope, right? I think there's a little more to it than that, right? We not only hoped that something would change politically, but we have now also at least taken the steps to make it financially possible. Now you just have to implement it. And I mean, when I look at the infrastructure in front of me , they said, okay, we have 500 billion, 100 billion will go towards

20:01 climate change, 100 billion is for the countries and this government wants to spend 150 billion. Um, they say quite deliberately that the fund is set up for 10 years and that we will only spend 150 billion of it. Sure, we have 8,000 dilapidated bridges, if I remember correctly, on motorways. Approval procedures will likely extend beyond this legislative period . This means that the money will not necessarily reach the economy in the next few years . It will take some time, but there are also projects that will come quicker and I think that is the point we need to focus on now. Mhm. is more than hope, I would say. Yes, but it is still the case, as you say, at some point a little money will trickle in somewhere and we'll get some decent bridges. And for that reason we are actually

20:47 almost euphoric here. So yes, you also have to say, I mean, when I address the issue of bureaucracy, that is also a goal and now it remains to be seen whether such large-scale projects can be brought to fruition more quickly. How much willpower is behind it, how much assertiveness and I think that is what the stock market is looking at and then on the other hand you have to say that we have gone through a long part of tears. Even small positive changes can have a big impact, because ultimately, it must be said that the assessment between America and Europe is very different. Um, it only needs to close a little bit and then we'll be a big step further. Mhm. And what I'm obviously missing, despite everything - I think we talked about it yesterday in the preliminary discussion - is what I'm obviously missing now, politically at the European level, but

21:33 especially at the German level, is this second part of us, we're going to move the economy forward again. One thing is, we do something in terms of fiscal policy. Mhm. Um, and the other part that's missing is a reduction in bureaucracy, maybe a change in taxes to make investments, let's say, more attractive , to spruce things up a bit. Um, because I think that, especially in this context with a somewhat weakening US economy and, let's say, certain uncertainties on the political side, as an entrepreneur, if I think rationally, I have to think about when and how much I want to invest in the USA . Um, it would be a great opportunity now to

22:21 get endless private investment and thus generate economic growth. Yes, and I think we can think one step further. I think that part of everything is that we save what was previously the Capital Markets Union and now the Investment Union, and that we create more opportunities to gain access to stock exchanges. We still have a large part that is financed through banks and do not have the depth of a capital market that we have in America. This means that if capital is really to flow, then the stock markets must also increase it a bit . Um, I think that would definitely achieve something positive . It's not as if we 're not good at patents, i.e. at research and science. We do have the patents, we just never get them ready for the capital market. Yes. Um, I think that's also an

23:08 aspect where Europe could benefit, without question. Yes. Mhm. And above all, of course, there is always the hope that sovereignty is not just something we have in defense, but that we can also achieve it economically if we want to. That's more of the problem. But we always talk about the fact that we have missed out on many high-tech champions , yes, the trend that we are not producing any in Europe . Yes, but if we never take the necessary steps to establish something like that from scratch somewhere on the stock exchanges , then we won't have any in 10 or 20 years either. Mhm. Let's hope that all of this will be heard politically somewhere, at some point . Um, and until then, we'll just keep talking about it

23:54 . Um, let's go back to investing. This is our favorite topic of all. Um, of course you've been cheating a bit with the European stocks or the European market. That's why I'm asking a few more questions. Ah, that wasn't my intention at all , because I know we just got off topic. Um, is Europe still something you would overweight, yes or no? Yes definitely. So, we say this trend will continue. Um, we say the dollar continues to lose value, but Europe will continue to attract funds. Um, in that respect Europe is one of the preponderances that we have. America is at best neutrally weighted and we would say, I do n't really want to bring up this MAC topic anymore

24:40 . These are not seven titles that belong together. That's why you still have individual companies that are rightly - I just mentioned it briefly earlier - Nvidia is rightly still a leader in this AI topic because they produce tips that are needed not only for development but also for the use cases that are now moving more and more into the foreground. So from that point of view, it's true that the big companies that have invested in AI development can no longer keep up, and rightly so . Yes, so in that respect, that is an issue where we need to diversify more. We are more cautious about the overall topic of technology. On the one hand, we would select well, but on the other hand, we don't see the broad market in America as being badly positioned. In that respect , I would say there is a slight overweight

25:25 on the supposed value track or, let's say, the non- high-tech companies and technology that is at best well selected. Europe is clearly overweight and what you can also see with the weakness of the US dollar is that the emerging markets are also benefiting in part. They are refinancing partly or mostly in US dollars and are now having the opportunity to stimulate their own economies more strongly because they can also reduce interest rates quite a bit because their currency has benefited significantly against the dollar. Now you lower the interest rates, um, that way you stimulate your own economy and get the exchange rate back to where you actually want it to be, without it becoming a burden . So, insofar as those who don't have major

26:11 inflation problems, and that's often the case in emerging markets, they can also stimulate the economy and attract funds in the same way . Um, as I said, we can always talk about it now, is it money that is flowing out or what is actually going in the direction of the emerging markets? Uh, we do see this as an issue and would overweight emerging markets . Um, and we also believe that China will be able to benefit more in the second half of the year . We are still neutral, but the tendency is to overweight. Mhm. Um, in the hope that politically, um, they will actually stimulate the economy a little more. Yes, they have to, right? Well, we saw a bit of that in this trade conflict too. You definitely have to look for other trading partners. Um, if there had been such tariffs, we would have had completely different supply chains

26:57 . The Chinese are tackling the issue, lowering interest rates on the one hand. But now, recently, there have even been attempts to curb price dumping as an economic method , because it is ultimately ruinous for one's own country. Um, so in that respect, I think that the right steps are being taken, which could also be positive for stocks in China. Um, how do you rate Japan? Japan has a completely different issue because we actually have a reform here after decades, which is positive for companies. So insofar as corporate profits rise and, accordingly, companies also benefit from it. We have had an overweight focus on Japan for a good few years now. Not that we would expand the momentum, because in fact there is still a bit missing and to be honest you have to say that the companies are

27:43 doing well, but the Japanese yen is not. So not against the euro. So in that respect, I would say that it actually cost us a bit of the harvest of our seeds last year. Um, we are still positive, but not necessarily, I would say, with great imagination. Mhm. The one side that I always see, we talked about it yesterday, is of course something when we take the topic of capital flow, for example out of the USA and into Europe, that you often see this reflex. We've seen a bit of that in the last few weeks . The moment you realize, okay, maybe everything isn't so bad after all, or [ __ ], to put it bluntly. Um, then you reflexively go and say, then

28:29 USA again. Yes, that's actually a nice phenomenon and I think there's also the IFO, they've examined it, let's say, from a rational perspective and they say that in the last 20 years Germany has actually only ever invested in this so-called medium technology. They basically established this by saying, okay, who were the companies that invested the most in 2000 ? And I don't know the companies, but they generally came from the automotive sector, both in America and in Europe. She came from the pharmaceutical sector or a Siemens was certainly also there . And if you look now 20 years later , things have completely changed in America. It is the high-tech companies in Europe that are still the industrial companies that

29:16 invest the most. So we missed out on playing with the technology theme a bit . In this respect , I would say that technology will continue to accompany us. It is true that when you look at high-tech, you look to America. To be fair, however, one must also say that many companies, especially in this high-tech sector, were significantly overvalued, or rather, too highly valued. We see that now on the one hand. Um, so in that sense, not necessarily investing blindly in technology in America, but very selectively, which is what I just said. And if you go one step further and look at the performance in euros, and we are euro investors, yes, then I can deduct another 14%. Then it is nice that we have currently reached a new high in the S&P 500 in America

30:01 , namely the 14% loss in euros, that is not the case. And so, as I said, we always take a closer look, but this reflex is already there because we have left this high-tech field to the Americans over the last 20 years. Well, and of course this understanding , okay, it's still the largest economy in the world and that's where the action is, so you always go there, right? Yes, but as I said, what I tried to address a little bit earlier between the US and Europe, different valuation, that is high-tech. Sure, they have an average P/E ratio of 18.7. We're somewhere around 14 in Europe. Why? Because they have high-tech titles. Um, why is Europe attractive at the moment? So, you are absolutely right. In absolute terms, the reason wouldn't necessarily be valid,

30:47 but in relative terms it's shifted a bit, right? We're just catching up. We don't want to catch up with them. Um, but when I look at the capital market and who is valued, then Europe is becoming relatively more attractive and the USA relatively less attractive. Mmm. Yes, exactly. If you look at the US from a valuation perspective, a P/E ratio of 15 is more exciting than 22, to put it simply, and that's if the currency also plays along. Um, so that means, um, actually, from a European perspective or a European investor's perspective, you have to be grateful to Donny for weakening his currency. Well, that's, uh, yes, above all, it's a double-edged sword. If you

31:32 are a German export company and are now producing in euros, and not in America, but in Europe, and you are now supposed to recoup your costs over there, you are forced to make the prices of your goods more expensive in order to maintain your margin, or you are essentially giving up a small amount of margin because the dollar has become so much cheaper or has lost so much value. Um, that's difficult. On the other hand, if you are now an American company that exports to Europe, you have it easier. You may be able to lower prices because you can easily recoup your production costs. So in that respect, the currency is something that has a similar effect to tariffs. Um, it will be more expensive or more difficult for European exporters. But now we do

32:18 n’t just have exporters in Europe. Um, Germany is certainly a leader in this area within the EU. And that's why we actually have different interests in the negotiations on the customs agreements . It will also become clear to what extent we are prepared to negotiate a consensus and to act in a united manner so as not to allow ourselves to be divided. This is certainly an attempt by the American government to destabilize each individual country a little bit as far as their negotiating position is concerned. Mhm. Yes, the camps are already falling apart again, right? If you see, of course, the German-dominated politicians in the EU are all a bit more aggressive in hyping up counter-threats and the

33:03 French, for example, tend to prefer to hold back a bit. Basically, you can always say that a currency that changes so dramatically in a short space of time is a challenge for every manufacturing company, which of course has much longer production cycles and margins and cost pressures, etc. A 14% shift in half a year is a challenge. Mhm. Um, and yet everything is still relatively resilient. The stock markets are holding up well. Yes, I am also actually interested in corporate profits. Yes, you can actually believe it now that we are just about to enter earnings season in the US and I think that the earnings will be very good . Especially for companies that generate a large part of their profits abroad, you have this

33:49 currency advantage for yourself. Um, so from the side, this wo n't be an indentation. It does n't come from the company website either. So, what I'm more concerned about is that, as I said, tariffs will lead to increased consumer prices . Consumption accounts for approximately 70% in the USA. Um, and the question will then be somewhere and that is the dilemma of the central bank. Um, on the one hand, yes, tariffs only have an effect once. What arrives over there is increased once by so many percent . Um, if the economy isn't doing so well and the interest rate cut, which we are definitely expecting - we are actually expecting two or three more interest rate cuts this year - then it could also happen that workers in America are

34:35 more likely to have wage demands next year in order to offset these increased consumer prices. Then you have this so-called second-round effect in inflation, which makes the whole issue even more difficult and is rightly causing the central bank headaches at the moment . Should I lower interest rates now to stimulate the economy or do I really have to wait a bit? What really happens then? If I look at the labor market now, you say it is relatively resilient. We have an unemployment rate of 4.1%. We were even at 4.3 and are now at 3.8. But I mean, that 's not all we're seeing yet, is it? Um, the leading indicators are also stabilizing at the level where they are. So far, one has to say that the economy is running smoothly, but perhaps these tariffs have not yet had such a strong impact on the real economy

35:22 . After all, we are talking about Liberation Day on April 2nd, a quarter of an hour ago, and that under the impression that the US dollar, the currency itself, has lost a lot of value during that time. It balances out. How far this will go from here, we will see. I was just about to say, then you get a bit more nervous then you look ahead to the third quarter when you see the first actual Zule . Mhm. So, as I said, in the short term, customs is an issue, but I'll definitely have to sort that out in the second half of the year . Um, how far is the economy really affected? And I said earlier, we are forecasting 1.6% economic growth. To be fair, however, one has to say how precisely can one predict something like this at the moment when we are talking about tariffs of

36:09 between 10 and 35% for Canada, and the same thing could happen in Europe . Um, what consequences does this have for individual countries? And you also have the issue: let's assume that something like China had remained, with 100% tariffs and more, then you have to assume that the Chinese would look for other sales markets that would be more profitable. That means you get a complete shift in the supply chains and sales markets. Well, there is a level like that somewhere. Uh, 1.6% is a number, but it certainly has a large range to the left and right of it, i.e. up or down. So that's what will become more clear in the second half of the year . Are the correct value in 1.6%. That was

36:55 n't the issue at the moment. At the moment the question was, could America also drift into recession under the tariff policy? And I would rule out that topic. This is the long-term part. But whether it will be 1.6 or perhaps only 1.2 or even 1.8% remains to be seen. Mhm. But in case of doubt, there will be no turbulence in the markets now , because you can say so what, whether it is 14 or 16. Yes, I think turbulence will only really be expressed if we really go below one, if that becomes a forecast, then it will become clearer, right? And that's just what I think, and in my opinion it's primarily related to these tariffs. Um, we have a relatively high probability for this main scenario that the tariffs are still an issue at the moment, but that they don't really put a damper on the economy, so we wouldn't fall below 1%. Um, tariff

37:42 escalation is always the second highest scenario at 20%. The main scenario is 70%. Um, but you can see, the difference is gigantic, right? So that can't be of any interest and that's also a bit of the lesson we've learned from China. So here too, the Americans backed down quite pragmatically and quickly in order to de-escalate the situation. And I think that gives us a little bit of security. Um, yes, we will have fluctuations in the short term , but economic growth in America will remain, um, and will not become recessionary, and it will not be driven into the wall . No, does he not have any interest in it? No, I don't know, he's keeping track of things somewhere, right? That can't be in his interest either . Exactly. And when in doubt, like

38:27 this spring, the stock markets come around the corner and explain that it doesn't work. That's one point. Exactly. And I think it's also quite interesting what we're actually seeing on the bond side , in the significant steepening of the yield curve. This means that short-term interest rates are falling. This will certainly be even more the case under the influence of the central bank's interest rate cut . But long-term interest rates do n't have much room, partly because of the debt we have. Yes, so in that respect we are assuming in America that it doesn't necessarily have to increase massively, although debt will rise because interest rates will ultimately be reduced at the front end , but the yield curve will tend to become steeper . Mhm. Thomas, that was a lot of fun again. Thank you. Happy to be out there, hope you were able to take something away with you. Feel free to write in

39:13 the comments how you are doing at the moment . I would be interested. Otherwise, as always, thank you for watching. As always, thank you for your visit. I'm looking forward to the next time and we'll see you again next week. Bisn. Bye. [Music]