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Tom, great to have you here with us. Just want to get your read on some of the economic data this week. Of course, this is taking center stage after we got the jobless claims data earlier this morning here, just a little bit hotter than expected. Ultimately, how does this set up for the Fed's decision making come their next meeting in November?

Yeah, so good, good to be with you, uh, as as always. Yeah, look, I I think, I think in terms of the the this week's worth of data, I I think that there were a couple of pretty interesting things. In fact, I would even say over the last couple of weeks worth of data, I think there've been a couple of interesting things that that I've probably have, you know, given Fed some comfort that they did go 50 basis points. I mean, you know, we've been saying for for quite some time that, you know, when you look at sort of, you know, beneath the surface, um, of of the labor backdrop that there are these these cracks that that that are forming. We've we've been saying this for for a number of months now, and I think, um, a number of the data points that that we got this week, um, I think support that idea. So, so what are some of them? Um, I think the jolt report in particular, it's not so much the, you know, the fact that jolts rose. I mean, it was really funny to me to hear, um, a lot of people say, oh, jolts rose. Yeah, but jolts rose this month, um, in what has been a massive downtrend for the last year. In fact, it it rose over, uh, it rose a few months over the course of the last year in this big downtrend. So, um, that wasn't compelling. I think what was compelling within the jolts data is the fact that the quit rate continues to, um, continues to to to move notably lower, uh, and that is usually a really great sign of confidence, or lack thereof, toward the labor backdrop. And then the other thing is the hiring rate within the jolts report, that is now back to where we were during the jobless recovery, um, post GFC. Um, so I I think, you know, there there are a number of, uh, of data points that I think continue to point to, you know, look, labor is in the midst of of slowing down. Now, that does not necessarily mean that the floor is going to fall out from beneath it. Uh, but but I I think it's, you know, it's it's certainly argument enough for the Fed to to to keep on going, uh, and I think to be, you know, some somewhat aggressive.

You know, Tom, we're seeing this move higher in yields on the back of that ISM services data that we are getting. It's reaching new session highs here, especially in the fact that prices paid rising more than expected. So here we are at 383. I believe if we could pull up the 10-year chart here. When we talk about that upside move that we could see in in yields, our our data is a little bit delayed, but when you take a look at the upside move that we could see in yields, are we talking 39? Are we going to push back up against 4%? What do you expect to see in terms of the likely moves?

Yes, so, I mean, I I would expect, I would expect that the market remains very choppy. And I think that that is consistent with this idea that, you know, the economy is in is in the midst of slowing down. Now, again, I think people hear slowing down and I think that conjures up these these images of, you know, you know, recession. We don't think that that's going to be the case. Again, we recognize that there are these risks that we highlighted. Um, but I think in a sort of a slowing backdrop, um, you know, the process of slowing is not linear. Um, you know, it will come with, uh, um, some some some good months. Uh, and I think, you know, particularly over the last day or two, I think that that's sort of what we're seeing. So, when I look at 10-year yields, you know, reacting, they're up, you know, looks like a couple of basis points, um, post, uh, ISM, you know, this to me is, I think pretty pretty typical of of an economy that's that's in the midst of of slowing down. Now, if the question, the bigger question is, you know, where is sort of fair value on 10-year yields? You know, I think that we're probably in the zone, um, of of fair value. You know, we're again, 383 on tens right now. Um, you know, I think if you put a pin in this number and, you know, sort of drew a circle, 25, you know, 50 basis points on either side, I think that's probably the broader range that that that you will exist in. But I I I I don't know that there's there's a lot of big notable moves from here, um, uh, at this point.

So with that in mind, do you believe that we will essentially be able to avert a a hard landing or a recession?

Yeah, we do. So, uh, you know, our view has been, uh, our base case has been, um, soft landing. You know, last year, or this year, we thought soft landing, uh, and, um, we we we think soft landing for next year too. Uh, that that remains the case for us. I mean, look, the the reality is those revisions that we got from GDP, uh, last week, those were notable. I mean, particularly on the income side of the of the equation. I mean, the saving rate, literally we just added 200 basis points to the saving rate. I mean, it went from 3% to 5%. That's significant. Uh, the consumer from a balance sheet perspective in the aggregate, uh, is actually doing pretty well. Uh, and so we think that that gives the consumer, uh, sort of a lot of cushion to be able to sort of withstand what will likely be, um, some some additional, uh, deterioration in labor from here.

Tom Porcelli, always great to get your insight. Thanks so much for joining us here this morning. PGIM's Fixed Income Chief US economist. Thanks, Tom.

Thank you.