BMO Wealth Management chief investment officer Young Yu Ma is "cautiously optimistic" on the stability of the economy and market conditions.

In an interview with CNBC, he noted that markets have “settled down” following earlier volatility, pointing to the 10-year Treasury yield (US10Y) at 4.35% and the VIX (VIX) fear gauge below 30 as signs of equilibrium.

“We actually think consumer spending will hold up reasonably well,” Ma said, and emphasized that soft sentiment data hasn’t translated to weaker hard metrics like weekly unemployment claims.

He also argued that earnings revisions became overly pessimistic due to tariff negotiation uncertainties rather than fundamental economic deterioration.

“Some concern did creep into those earning revisions more than was warranted,” he observed, predicting the current earnings season would reveal better-than-expected corporate performance.

While acknowledging headwinds like reduced foreign arrivals and anecdotal reports of companies delaying investments, he characterized these as manageable rather than recessionary.

The CIO highlighted lingering business hesitancy, noting “companies are very reluctant both to hire and to make large investments” until tariff clarity emerges.

He expects modest labor market softening but no mass layoffs, projecting stability by summer as focus shifts to tax cuts and reshoring opportunities.

On bond markets, Ma anticipates 10-year yields (US10Y) remaining range bound between 4.2% and 4.6%, levels he called “very comfortable” for economic activity.

Lastly, he dismissed concerns about recent yield spikes. “The 10-year treasury yield (US10Y) never got much above 4.5%” during February’s volatility.

He warned of potential budget deficit-related turbulence later but reiterated his view that yields below 4.75% pose no systemic risk.

“The narrative is going to change in a couple of months here,” he concluded, forecasting improved business confidence as trade uncertainties resolve.