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Congress to step.
And boy that round of massive automatic budget cuts leaders on the left and the right are still clearly it that's.
Democrats are we want solutions.
Republicans want sequestration.
Some of them have even called it a home run.
That doesn't sound like anybody's own team America if they think sequestration indiscriminate mindless cuts across the board are a home run.
I'm happy to talk to the president amounted to talk to senator Reid no but the way things happen around here is that.
-- -- house passes a bill the senate passes the bill if we disagree -- go to conference.
Represents joining us now Russell investments chief economist Mike -- -- -- -- out clearly the market could care less about this nonsense at this point right.
So what are what are they gonna do I mean we -- know at this point come tomorrow the world is not gonna end.
We're gonna see this stuff over the course of the next couple weeks isn't really gonna derail the markets.
No I think the market is very much priced in.
The sequestration which should amount to fiscal tightening on the order of about zero point 6% of GDP will be of additional tightening from sequestration.
I think the market is largely priced that in it's also important to remember that when we were facing that the risk of the fiscal cliff of the -- of the year.
The biggest threat of all was the complete expiration of all the bush tax cuts for.
-- percent of Americans.
The the New Year's -- agreement continue the bush tax cuts in in their entirety for about 99% of Americans so.
The largest fiscal -- this here for the fiscal cliff was averted and the sequestration is a smaller piece of the of the pie.
Right I -- and really at this point we're talking about 85 billion in total for this year 46 billion will go to defense.
Again clearly -- market realizes we don't have to cut jobs we don't have to cut big things like TSA agents.
We can cut the travel budget instead.
Yeah I mean that there will be some -- from the cuts and I'm sure that in some sense of I village a bit of grandstanding to make it sound like they're very owner's son the average American but.
In an all they're not gonna be huge.
We've reduce our our real GDP growth forecast for the beginning of the year.
From about two point 1% for 2013 to about one point 9% and if you look at the the blue chip consensus as well.
They -- the decrease in the forecast hasn't been very large.
If you were -- projecting on average.
That they can't -- produce about a 165270000.
Nonfarm payroll jobs per month on average across 2013.
This is not so -- do you rail the expansion.
I mean at an expansion I think is it.
We -- use that word loosely I mean our fourth quarter.
Was revised down markets it wasn't entirely tickled with that jobless numbers aren't great still unemployment is out there.
What keeps you up at night going forward with this economy.
Well you always worry that there could be some sort of negative shock that.
Could not GDP down but it's important to remember that.
Just because we're a slow growth know did doesn't make recessions more frequent than we've seen in the past just.
The you think the -- is being sort of shifting gears -- -- economy just because of cruising speed of little bit slower doesn't mean I read that much more likely to shift down to a lower year.
Upstairs so quickly then my great time your clients put their money in this -- -- market.
Well that equities still seem to be the best the best asset class out there.
Bar -- Do you know if you look at projections for increases in bond yields we project them to be very gradual and and not not sudden or dramatic.
That would cause a real my belief that the Fed is behind the curve we don't expect the Fed this to be perceived as being behind the curve at all.
We don't expect a big inflation to come out of the Fed's policies.
But is still equities you know you everyone wants equity risk premium at a low return environment everybody -- -- to the doctors -- him.
Yeah and that's clearly where the Fed wants to go to Mike Dicker thank you so much -- the time.
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