 for more Jonathan Sheridan live from FIG in Sydney. Jonathan, it's a nuanced distinction. Just walk me through it. Possibility be probability. Good afternoon, Carson. Yeah, look, I think the comments were veiled as usual, but very strongly pointed towards the fact that they will start in December. We also had another Fed board member, Lockhart, who has been relatively dovish to come round to the situation being also in favour of a potential hike where he said his estimates look like that a hike would be reasonable in these circumstances as long as we start to see a bit more wage tightening. So we've got another payrolls number coming up soon and if the wages component of that shows any kind of strength, then I think that will be the final nail in the coffin of the zero interest rate policy. She's testifying before a joint congressional committee as of Thursday on the US economic outlook. How is she likely to characterise things there? I think pretty much the same as she said in her press conference overnight that they see things heading towards their goals, the 2% inflation being the main one and further wage growth that they're expecting. So I don't think she'll say anything different. It's been on message for a long time now and that seems to be the way that we're headed and I think actually that'll be good for markets because this is probably the single biggest risk point in markets that we've got at the moment and we need to get that out of the way. She made the remark that holding the Fed funds rate at the current level for too long could also encourage excessive risk taking and undermined financial stability. Is that not sort of like a remark after the horse's bolted? Very much so, yes. I think we're well down that path. If you look at the average trailing PE of the US stock market it's around 23 times. It's only been there twice in history which ended badly both times in 1929 and 2001. So we obviously would rather not have an outcome such as we had after those dates but definitely, as you say, the horse has bolted but we need to close the stable door pretty carefully this time. We need to keep things as stable as possible. They're well aware of that. They probably could have gone earlier but were concerned about what might happen overseas and particularly emerging markets with all that US dollar debt that's out there which is obviously getting more expensive as the dollar appreciates. So how do you close the door carefully on that EM story? I think that you have to be measured and they've spent probably 12 to 18 months preparing markets for this eventuality so that's something that will be an ongoing theme. I think the pace of rate rises will be gradual so as to give markets a lot of time to adjust gradually and not provide shocks. I think financial stability is one of the mandates of central banks around the world and that will be a very key one that they'll be focused on this time around. Any surprises in that yield higher story overnight as a result looking at the two year and the 10 year? No, not really. I think we're just, as I said, pricing in much more of a firm chance of the rate hike happening in December. That's being seen in the short end of the curve as you say the two year getting to five year highs. I think the long end of the curve is being held down by the ECB action though. We're still seeing very muted inflation numbers and growth numbers out of there and Draghi's prepared to find another barrel to unleash at the tepid Eurozone economy. So I think the long end of the curve is being held down by what's happening in the Eurozone but the short end definitely preparing for that official rate hike. It's interesting you say that because you could argue there's a point of commonality between their quest on inflation. Janet's remarks that she anticipates economic growth on track to meet their own inflation targets but Barclays has said overnight look unless you get a sub 4% unemployment print you are going to struggle over the long term to meet the 2% inflation target. Yeah look I mean they're obviously much more into the detail of the numbers that I am you know more in them in the markets per se but they've obviously run their models with certain assumptions. We know that headline unemployment is not necessarily a hugely reliable indicator of the state of tightness in the labor market. We here at FIG prefer to look at the under employment statistics the U6 and that's still relatively high comparatively to the rest of history. So look it's certainly a valid point to make that headline unemployment probably should be lower if you're going to get that inflation because you know you need tightened conditions in labor and also in prices for that to happen. So I don't think it's unreasonable for them to say that but I don't think anyone is realizing that we're at where they want to be right now. It's that we're approaching it and they know that they need to raise rates gradually and therefore they don't want the shock of having to have an overheated economy and raise rates too fast. Very very briefly your Baal 3 we kind of I thought we'd moved on to Baal 4 but you're saying Baal 3 alive and well when it comes to sub debt issuance domestically what kind of pipeline are we looking at here before we then trans we transfer into Baal 4. So really Baal 3 was just the driver about having these non viability causes in the issuance in lower tier 2 and additional tier 1 capital. So still relevant from from that point in that that was the jumping off to get these non viability causes included. They're becoming much more standardized across the market now and we've seen a fair bit of issuance in that level replacing old non-compliant bonds. So that's the key thing here is that we had old issues that were coming up for maturity and or call dates in the sub debt space and they've been refinanced with the compliant non viability issues and we've seen Vero or the old Vero sorry the AII group from Suncorp comes to the market recently with a low tier 2 at 3.30 over now trading in at about 3.10 and ANZ launched a six year non call at 2.70 over about a week and a half ago which is trading strongly in at 2.60 over so both trading above their issue price is showing that there's strong demand even with these non viability causes. Nicely put Jonathan thank you so much. Thanks Karsten. Jonathan Sheridan from