Wharton School professor of Finance Jeremy seagull joins us now we also got that jolt this week thanks to China and I wonder how much of a game changer you think that could be for Global markets given what we've heard oh yeah I definitely I listened to David terer and wow I I mean he he makes a lot of sense uh the only way a little bit I disagree with him is that uh you know I think you can ride Japan for a while he was worried about a very longterm if an appreciation know hurts their
exports and raises interest rates but in the meantime you know you get a double whammy with a rising Yen and I mean take a look at yesterday you got 2% on the Yen 2% on the Nick and so you really got a 4% gain so I I think that could be ridden I I think what China is doing is very positive uh and and and listen his philosophy uh I mean you can't go very wrong when you buy a market at 10 price earnings rate ratio I mean unless you think that chairman XI is going
to abolish private Enterprise um uh and that doesn't look like where they're going right now um uh no but you don't really know you don't really know and obviously the Bears obviously the Bears on China you know are going to say you know it's just going to go downhill and his attitude is not certainly is capital friendly as people hope but uh you know Warren Buffett always used to talk about you know that that margin of safety that he gets by buying a low PE market and the China Market I mean now it's probably 12
13 PE but it was 10 PE for a year it was around the lowest in the world I think Brazil was the only Market that was actually lower than that in terms of price earnings ratio so yeah I mean he makes a lot of s I think he makes a lot of sense and the US is expensive we've had the best growth I'm not bearish but where do you think the best gains are even mentioned Europe that's a 154 PE ratio again in the long run that that is usually a very very favorable factor for
returns so you think the US market looks full here I mean it looks listen I love the new trajectory of the FED um you know I I think they only need I mean that they can do if they do a quarter point every meeting we're going to be at three and A2 by the middle of next year and by the way that's where I think the FED should be three and a half actually the fed's uh uh you know Dot Plot talks about 2.9 is it along I don't think it's going to ever get that
low unless we have a recession that's not a really an equilibrium but uh three and a half all we need is a quarter point the next six meetings which gets us to the June meeting next year that's where we should be um and uh you know uh that on based on in based on the inflation B inflation come down so much CU we're still not a Target inflation data I mean I I think he's on a they're on a TR they don't have to do 50 I mean I would prefer their you know I think
the data says they should be at four so they're going down a little slower but much faster than it looked like before the last meeting so instead of getting to you know three and a half 4% in 2026 you know a quarter point is that they're going to get there probably in the middle of 2025 and you know you can say well how much harm is the economy going to be it's maybe a little bit too high for a few months but if they're going to get there and the market thinks they're going to get
there uh you know the rest of the year does not look as bad one reason why the long Bond went up which doesn't surprise me at all is that recession risk is lowered by uh the pivot or the recalibration of the Fed
