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Fed Meeting LIVE!🔴Jerome Powell Rate Cut vs Crypto Market🔥 · The Paul Barron Crypto Show

• 0:00
  Speaker 1: All right, welcome into the live show. Today.
• 0:01
  Speaker 2: We're going to dive into, of course, the FOMC meeting,
• 0:04
  Speaker 2: and one of the things that we will breaking down,
• 0:07
  Speaker 2: of course is Chair Pal's remark. My name is Paul Barren.
• 0:10
  Speaker 2: Welcome back into the show. Let's get started. I want
• 0:13
  Speaker 2: to kind of start with the good news bad news,
• 0:17
  Speaker 2: I guess, and that is watching Gury breaking out here.
• 0:19
  Speaker 2: The Federal Reserve leaves interest rates unchanged right now. It
• 0:23
  Speaker 2: remains at four and a.
• 0:23
  Speaker 1: Quarter to four five.
• 0:25
  Speaker 2: This is a factor that we've been anticipating. I still
• 0:28
  Speaker 2: felt like there might be an outside chance that July
• 0:31
  Speaker 2: could see a ray cut.
• 0:32
  Speaker 1: Obviously, Chair Pale is.
• 0:33
  Speaker 2: Going to be making remarks here in a minute. We'll
• 0:35
  Speaker 2: go to that over with the Federal Reserve and the
• 0:39
  Speaker 2: way these live streams work. If you're brand new, this
• 0:42
  Speaker 2: is probably the most important FED meeting that I think
• 0:47
  Speaker 2: we've done in eight months. And the reason is this,
• 0:49
  Speaker 2: all of this is post genius Act. All of this
• 0:52
  Speaker 2: is really post a lot of the tariffs, which are
• 0:54
  Speaker 2: now starting to wind down, and now we're getting into
• 0:58
  Speaker 2: the real core of in the market will start to respond.
• 1:02
  Speaker 2: When I say the market to FED in terms of
• 1:04
  Speaker 2: interest rates. You have to consider the amount of countries
• 1:08
  Speaker 2: globally that are already down much lower in terms of
• 1:12
  Speaker 2: interest rates than we are here in the United States,
• 1:14
  Speaker 2: and of course in the United States leading the way
• 1:16
  Speaker 2: out there.
• 1:17
  Speaker 1: So it's a big deal. Odds UNFED cutting.
• 1:20
  Speaker 2: This was kind of kind of reviewing it two times
• 1:22
  Speaker 2: in twenty twenty five have now fallen to thirty six percent.
• 1:26
  Speaker 2: Everybody kind of pointing to the fact that you know,
• 1:28
  Speaker 2: we're not going to get one in July. Now we
• 1:30
  Speaker 2: have to look to September. This is why watching Chair
• 1:34
  Speaker 2: pals statements and remarks today, but also I think a
• 1:37
  Speaker 2: little bit of his body language of how he's taking
• 1:39
  Speaker 2: of what's going on with him and President Trump into
• 1:43
  Speaker 2: consideration for the next FOMC meeting. And remember there's a
• 1:46
  Speaker 2: lot of factors that play into this. So this is
• 1:50
  Speaker 2: a super important conference. In news conference, my imagination around
• 1:55
  Speaker 2: what conversations are going to be had in that room
• 1:59
  Speaker 2: are going to run a little It's going to run
• 2:00
  Speaker 2: a little wild. And what I mean by that is
• 2:02
  Speaker 2: there's going to be some hard questions I think that
• 2:05
  Speaker 2: chairpal does have to address. So meanwhile, odds of rate
• 2:08
  Speaker 2: cut are up twenty five percent odds of zero rate
• 2:11
  Speaker 2: cut up to twenty percent if POWUD is not and
• 2:14
  Speaker 2: this is for the rest of the year. If POW
• 2:16
  Speaker 2: does not set the stage four September, yields are probably
• 2:20
  Speaker 2: going to surge. So this is why we are talking
• 2:23
  Speaker 2: about a very important meeting stick around for that we
• 2:25
  Speaker 2: will go be cutting to chair pal here in a
• 2:27
  Speaker 2: moment and getting into that. Let's take a look at
• 2:30
  Speaker 2: the inflation right now, inflation remains very close to target,
• 2:33
  Speaker 2: the target of the Fed two percent. And when you
• 2:37
  Speaker 2: look at the consideration of where it has been, because
• 2:40
  Speaker 2: this has really been hovering a little bit above two
• 2:43
  Speaker 2: percent for the most part. But if you go all
• 2:45
  Speaker 2: the way back to December, which is really when we
• 2:48
  Speaker 2: started to see the highest inflation at least over the
• 2:50
  Speaker 2: near short term, we have continuously fallen and continue to
• 2:54
  Speaker 2: trend down. So Trump may be right, is that a
• 2:58
  Speaker 2: lot of this inflation, very concern of tariffs has not necessarily.
• 3:03
  Speaker 1: Played out in the market.
• 3:04
  Speaker 2: Now many people analysts still say it's still lagging, that
• 3:07
  Speaker 2: we are still yet to see that happen. Now with
• 3:10
  Speaker 2: the deal with the EU, now we're talking about India,
• 3:13
  Speaker 2: et cetera, a lot is starting to factor into this
• 3:17
  Speaker 2: other things that you kind of consider here. The US
• 3:20
  Speaker 2: economy grew three percent in Q two. This beat expectations.
• 3:24
  Speaker 2: Another factor that the economy is still doing well.
• 3:27
  Speaker 1: However, the jobs reports.
• 3:28
  Speaker 2: We're going to get two of those, and we're gonna
• 3:30
  Speaker 2: get two cpis before the end of the year. Those
• 3:31
  Speaker 2: all will take a very big toll on how Powell
• 3:35
  Speaker 2: responds to that.
• 3:36
  Speaker 1: So make sure.
• 3:37
  Speaker 2: I don't know if we're going to get to questions today.
• 3:39
  Speaker 2: We might try to you guys, feel free to drop
• 3:42
  Speaker 2: some in over on the chat.
• 3:43
  Speaker 1: We'll try to get to them. We can.
• 3:46
  Speaker 2: All right, let's go on some other things because I
• 3:48
  Speaker 2: want to kind of nail down some other details. This
• 3:51
  Speaker 2: of course, is talking about the imposition of another twenty
• 3:54
  Speaker 2: five percent tariff on India and also a penalty. India
• 3:58
  Speaker 2: a big trading partner, I would say, very similar to China.
• 4:01
  Speaker 1: But again this is I would.
• 4:03
  Speaker 2: Say, a friendly trading partner that they're trying to rope in. Obviously,
• 4:07
  Speaker 2: India's playing both sides right now. Again, I think this
• 4:10
  Speaker 2: is more of a strategic play with President Trump trying
• 4:14
  Speaker 2: to continue to put a little pressure on not only
• 4:16
  Speaker 2: Putin but also the countries that are dealing with him.
• 4:19
  Speaker 2: The United States also collected twenty eight billion in tariff
• 4:23
  Speaker 2: revenue in July.
• 4:24
  Speaker 1: That's one month.
• 4:26
  Speaker 2: This is the highest monthly total this year. So if
• 4:29
  Speaker 2: you think about twenty eight billion times ten months, the
• 4:33
  Speaker 2: numbers start becoming astronomical.
• 4:35
  Speaker 1: So all of this very very good.
• 4:38
  Speaker 2: I want to go to a clip of how this
• 4:41
  Speaker 2: could be affecting some of the scenarios that are playing out.
• 4:45
  Speaker 1: Take a look.
• 4:46
  Speaker 3: But I don't think the FED really matters. By next week,
• 4:48
  Speaker 3: it'll be forgotten. Ultimately, the fed's path will be decided
• 4:52
  Speaker 3: by when tariffs or if they feed through to the
• 4:55
  Speaker 3: real data, and when they feed through, how that impacts
• 4:57
  Speaker 3: the consumer, how that impacts the economy. So I don't
• 5:00
  Speaker 3: think the FED is the big driver. I think the
• 5:01
  Speaker 3: bigger driver are probably earnings and data. And what's interesting
• 5:05
  Speaker 3: on the earning side is the US earning season has
• 5:07
  Speaker 3: been okay, relatively good. Europe's been a bit more disappointed,
• 5:11
  Speaker 3: bit more of a mixed picture. On the data side,
• 5:13
  Speaker 3: what it is interesting is that we're seeing consumers still
• 5:15
  Speaker 3: continue to spread. That is the message out of retail sales,
• 5:18
  Speaker 3: that is the message out of GDP data and very
• 5:21
  Speaker 3: rarely for me, because I normally dismiss GDP data has
• 5:24
  Speaker 3: been too backward looking. I think today's GDP data out
• 5:27
  Speaker 3: of the US really matters because we're expecting a strong
• 5:30
  Speaker 3: second quarter out of the US to kind of compensate
• 5:32
  Speaker 3: for the week first quarter that was purely a technical
• 5:35
  Speaker 3: issue because of front loadague of tariffs. If we don't
• 5:37
  Speaker 3: get that, that'll really see yields tumble again long before
• 5:41
  Speaker 3: we kind of expect to see to find out whether
• 5:43
  Speaker 3: Bowman is decent or not.
• 5:45
  Speaker 2: So this gets back to the point that I made
• 5:47
  Speaker 2: earlier is this is the most important meeting out there
• 5:50
  Speaker 2: that we've had so far. Sorry for the noise, guys
• 5:53
  Speaker 2: are building is getting some construction in it. But I
• 5:56
  Speaker 2: do want to go into this right here because this
• 5:58
  Speaker 2: is just in and that is and Trump says he
• 6:01
  Speaker 2: heard that FED chair pal will cut interest rates in September.
• 6:05
  Speaker 2: If this is true, you got to remember Trump is
• 6:08
  Speaker 2: off the cuff a lot of times.
• 6:09
  Speaker 1: We call him Taco Trump.
• 6:11
  Speaker 2: But the point is is that if that is right,
• 6:13
  Speaker 2: then this gives a lot of indication to the market.
• 6:15
  Speaker 2: The real key here is going to be if it's
• 6:17
  Speaker 2: a quarter point or a half point going into September,
• 6:21
  Speaker 2: there is so much starting to loom of how these
• 6:23
  Speaker 2: crypto markets and I think risk assets in general will
• 6:26
  Speaker 2: start to react very soon. This is another factor that
• 6:30
  Speaker 2: I think still everybody has to consider, and that is
• 6:33
  Speaker 2: the issue with the FED not playing politics.
• 6:36
  Speaker 1: Here's a clip really.
• 6:38
  Speaker 4: Be pivoting to why are you waiting?
• 6:41
  Speaker 5: As opposed to the well we can wait. There have
• 6:45
  Speaker 5: been a number of people who have speculated that FED
• 6:47
  Speaker 5: char J. Bowell might take an even more hawkish approach
• 6:50
  Speaker 5: to policy, might signal that the labor economy is in
• 6:54
  Speaker 5: a good place and that they're balanced roughly in their
• 6:56
  Speaker 5: mandates in order to avoid accusations of political interference that
• 7:01
  Speaker 5: he's getting bullied by President Trump.
• 7:04
  Speaker 6: They're not going to win.
• 7:06
  Speaker 4: The FED will not win if it plays politics like
• 7:08
  Speaker 4: that's just not the game that it is well suited for,
• 7:10
  Speaker 4: nor should it be doing it.
• 7:13
  Speaker 2: All right, So I totally agree with that a political
• 7:16
  Speaker 2: position by the FED right now is absolutely undeniable in
• 7:20
  Speaker 2: a bad way, and I think this just continues to
• 7:23
  Speaker 2: put Powell in a bad position again. We still think
• 7:27
  Speaker 2: there is a shadow chair kind of brewing within all
• 7:29
  Speaker 2: of this. Another breaking topic right now. House is also
• 7:35
  Speaker 2: setting up to unveil their digital Assets report. We saw
• 7:38
  Speaker 2: some reveal of this earlier today. I tweeted out on
• 7:41
  Speaker 2: this that bitcoin was not included in the Strategic Reserve acquisition.
• 7:46
  Speaker 2: But we're likely to get a lot more detail on this.
• 7:48
  Speaker 2: This is all happening at the same time. We'll try
• 7:51
  Speaker 2: to keep you guys updated as things come in on that.
• 7:53
  Speaker 2: We're going to be monitoring the wires quickly to kind
• 7:56
  Speaker 2: of bring that to you as well. We will be
• 7:58
  Speaker 2: going to share a pal here in about six minutes,
• 8:01
  Speaker 2: he'll go live and he'll go in front of the
• 8:04
  Speaker 2: press core. That is when these questions will come in.
• 8:07
  Speaker 2: If in fact that Trump is right and we have
• 8:10
  Speaker 2: a potential move into September, watch for the markets to
• 8:15
  Speaker 2: start to react a little bit. And I'm kind of
• 8:16
  Speaker 2: curious whether you guys think we're going to see a
• 8:19
  Speaker 2: pump a dump sideways. Make sure and hit the poll
• 8:22
  Speaker 2: and go there. Here we go, right now, let's take
• 8:24
  Speaker 2: a look at it. Twenty four hours after FED meeting,
• 8:27
  Speaker 2: market is looking at pumping all right, so forty one
• 8:31
  Speaker 2: percent of you are very positive remaining the same or
• 8:35
  Speaker 2: pumping forty one and thirty three so good, good news.
• 8:38
  Speaker 2: There other good news. I guess when you think about this,
• 8:42
  Speaker 2: this is it depends on where you fall on this
• 8:44
  Speaker 2: side of things.
• 8:45
  Speaker 1: But four trillion dollars.
• 8:47
  Speaker 2: JP Morgan partners now with coinbase to make buying crypto easier.
• 8:50
  Speaker 2: The big point on this, Matt Siegel kind of breaks
• 8:52
  Speaker 2: it down. The way it's going to work is it's
• 8:54
  Speaker 2: going to link bank accounts with crypto accounts. Now, I
• 8:58
  Speaker 2: don't know if you would allow a bank a direct
• 9:02
  Speaker 2: wallet connection, and maybe you would eventually. I think it's
• 9:04
  Speaker 2: a question of when the banks start to realize there
• 9:09
  Speaker 2: is a new phase of investing, there's a new phase
• 9:12
  Speaker 2: of how money is going to be moving around. Hopefully
• 9:15
  Speaker 2: they realize that, and if that occurs, then maybe there
• 9:18
  Speaker 2: is a future for this. The question I think starts
• 9:21
  Speaker 2: to get into how does this play out for integration
• 9:25
  Speaker 2: in all sorts of things. Matt talks about this, customers
• 9:28
  Speaker 2: will be able to transfer Chase rewards that would be
• 9:30
  Speaker 2: interesting and use Chase credit cards to fund something like
• 9:35
  Speaker 2: a coinbas ballast. So for the first time, this is
• 9:38
  Speaker 2: a big deal. So let me know in the comments
• 9:40
  Speaker 2: do you think this would be good for you or
• 9:42
  Speaker 2: if you're a Chase customer, would you use it in
• 9:45
  Speaker 2: that capacity? This is of course Matt Hogan kind of
• 9:49
  Speaker 2: chiming in on that very topic.
• 9:52
  Speaker 1: And Matt is a good friend.
• 9:53
  Speaker 2: And in the beginning I was kind of saying, wait
• 9:56
  Speaker 2: a minute, I don't know if I agree with Matt
• 9:57
  Speaker 2: on this, and then I kind of backed up and say,
• 9:59
  Speaker 2: wait a minute, let's think about Matt, because he looks
• 10:02
  Speaker 2: way out ahead and.
• 10:04
  Speaker 1: He says in the future.
• 10:06
  Speaker 2: I'm thinking that he's talking maybe a little longer out
• 10:09
  Speaker 2: there will be no line between our bank account and
• 10:12
  Speaker 2: our wallets, crypto marked out wallets. So it's going to
• 10:15
  Speaker 2: happen faster than most people think. And again this is
• 10:18
  Speaker 2: the whole back to the whole point there on the
• 10:20
  Speaker 2: direct to bank wallet connection with JP Morgan and the API.
• 10:25
  Speaker 1: Remember though, we reported earlier this week.
• 10:28
  Speaker 2: About banks including JP Morgan starting to charge access because
• 10:33
  Speaker 2: remember the plaid connection they used to have the TiSER
• 10:36
  Speaker 2: banks together. We're starting to see those drop. Jim and
• 10:38
  Speaker 2: I was a verse casualty. Will we see that with
• 10:41
  Speaker 2: robin Hood and coinbase Right now it hasn't happened, but
• 10:44
  Speaker 2: the idea is that cost is going to be transferred
• 10:48
  Speaker 2: over to the customer. You me of being able to
• 10:51
  Speaker 2: transfer into these accounts and not being able to see
• 10:54
  Speaker 2: that instantaneous connection, meaning that wire transfers, ah, those kind
• 10:59
  Speaker 2: of things are h gone. Wire transfer being one of
• 11:02
  Speaker 2: the new places of how you be able to do
• 11:04
  Speaker 2: that until we see companies like robin Hood, companies like
• 11:09
  Speaker 2: Ripple and others that launch bank accounts and the ability
• 11:14
  Speaker 2: to handle banking in general. When that occurs, I think
• 11:16
  Speaker 2: now it's going to be a race going forward. So
• 11:20
  Speaker 2: and all this is timing very interesting right now. I
• 11:24
  Speaker 2: think we're gonna have another poll coming in. I do
• 11:26
  Speaker 2: want to get into this point right here. SEC is
• 11:29
  Speaker 2: acknowledging blackrock filing to allow staking for its spot ethereum.
• 11:32
  Speaker 7: Now.
• 11:33
  Speaker 2: We put a statement out on Twitter earlier, and I
• 11:36
  Speaker 2: think the point is is that when people look at
• 11:38
  Speaker 2: ETH Treasury companies, they're concerned and I would be too
• 11:42
  Speaker 2: that ETH Treasury companies companies would fall prey to this
• 11:46
  Speaker 2: move because you'd be able to stake on an ETF
• 11:49
  Speaker 2: So why go to ETH Treasury because they're utilizing staking tools.
• 11:53
  Speaker 2: I think it's more about those ETH Treasury companies that
• 11:56
  Speaker 2: are building products, services and for structure all of that.
• 12:02
  Speaker 2: I think is different than a typical treasury company that's
• 12:06
  Speaker 2: just building a treasury if it doesn't have a plan
• 12:10
  Speaker 2: to build out a much more interesting ecosystem beneath it.
• 12:15
  Speaker 2: And I think those are the ones that will do
• 12:16
  Speaker 2: very well and continue to do will. But if it's
• 12:19
  Speaker 2: just buying Ethan holding it, the ETFs, I think are
• 12:22
  Speaker 2: going to win. Here other point I want to get
• 12:25
  Speaker 2: at right here, White House Crypto report does not include
• 12:27
  Speaker 2: details about strategic Bitcoin reserve.
• 12:30
  Speaker 1: This was the point I was making earlier.
• 12:32
  Speaker 2: Looks like President Trump is going to announce about this
• 12:35
  Speaker 2: report how it's going to be managed. Probably got a
• 12:37
  Speaker 2: little pushback from this statement from most of his donors
• 12:42
  Speaker 2: and organizers, especially in the bitcoin community. So maybe he's
• 12:46
  Speaker 2: coming out to do an address on this, because there
• 12:48
  Speaker 2: wasn't anything on the docket for this to be aired
• 12:53
  Speaker 2: right now, so it's definitely a new development happening. Looks
• 12:57
  Speaker 2: like Chapalell is going to be coming in here a minute.
• 13:00
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• 13:01
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• 13:07
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• 13:09
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• 13:10
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• 13:24
  Speaker 1: But the way these FOMC meetings.
• 13:25
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• 13:28
  Speaker 2: good questions and there will be some stupid questions. We
• 13:32
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• 13:35
  Speaker 2: responds to it is critical. So listen in right here
• 13:39
  Speaker 2: as it goes live.
• 13:42
  Speaker 8: It's good afternoon, my colleagues, and I remain squarely focused
• 13:47
  Speaker 8: on achieving our dual mandate goals of maximum employment and
• 13:51
  Speaker 8: stable prices for the benefit of the American people. Despite
• 13:55
  Speaker 8: elevated uncertainty, the economy is in a solid position. Limit
• 14:00
  Speaker 8: rate remains low, and the labor market is at or
• 14:03
  Speaker 8: near maximum employment. Inflation has been running somewhat above our
• 14:07
  Speaker 8: two percent longer run objective. In support of our goals, Today,
• 14:13
  Speaker 8: the Federal Open Market Committee decided to leave our policy.
• 14:16
  Speaker 6: Interest rate unchanged.
• 14:18
  Speaker 8: We believe that the current stance of monetary policy leaves
• 14:21
  Speaker 8: US well positioned to respond in a timely way to
• 14:24
  Speaker 8: potential economic developments. I will have more to say about
• 14:28
  Speaker 8: monetary policy after briefly reviewing economic developments. Recent indicators suggests
• 14:34
  Speaker 8: that growth of economic activity has moderated. GDP rows at
• 14:39
  Speaker 8: a one point two percent pace in the first half
• 14:41
  Speaker 8: of this year, down from two point five percent last year,
• 14:46
  Speaker 8: although the increase in the second quarter was stronger at
• 14:48
  Speaker 8: three percent. Focusing on the first half of the year
• 14:51
  Speaker 8: helps smooth through the volatility in the quarterly figures related
• 14:55
  Speaker 8: to the unusual swings in net exports. In growth largely
• 15:01
  Speaker 8: reflects a slow down in consumer spending. In contrast, business
• 15:05
  Speaker 8: investment in equipment and intangibles picked up from last year's pace.
• 15:09
  Speaker 8: Activity in the housing sector remains weak. In the labor market,
• 15:14
  Speaker 8: conditions have remained solid. Payroll job gains averaged one hundred
• 15:19
  Speaker 8: and fifty thousand per month over the past three months.
• 15:22
  Speaker 8: The unemployment rate at four point one percent, remains low
• 15:25
  Speaker 8: and has stayed in a narrow range over the past year.
• 15:29
  Speaker 8: Wage growth has continued to moderate, while still outpacing inflation. Overall,
• 15:34
  Speaker 8: a wide set of indicators suggests that conditions in the
• 15:37
  Speaker 8: labor market are broadly in balance and consistent with maximum employment.
• 15:43
  Speaker 8: Inflation has eased significantly from its highs in mid twenty
• 15:47
  Speaker 8: twenty two, but remains somewhat elevated relative to our two
• 15:51
  Speaker 8: percent longer run goal. Estimates based on the Consumer Price
• 15:55
  Speaker 8: Index and other data indicate that total PCE prices rose
• 15:59
  Speaker 8: two point five percent over the twelve months ending in June,
• 16:02
  Speaker 8: and that excluding the volatile food and energy categories, core
• 16:06
  Speaker 8: PCEE prices rose two point seven percent. These readings are
• 16:10
  Speaker 8: little changed from the beginning of the year, although the
• 16:13
  Speaker 8: underlying composition of price changes has shifted. Services inflation has
• 16:17
  Speaker 8: continued to ease, while increased tariffs are pushing up prices
• 16:21
  Speaker 8: in some categories of goods. Near term measures of inflation
• 16:26
  Speaker 8: expectations have moved up on balance over the course of
• 16:28
  Speaker 8: this year on news about tariffs, as reflected in both
• 16:32
  Speaker 8: market based and survey based measures. Beyond the next year
• 16:36
  Speaker 8: or so, however, most measures of longer term expectations remain
• 16:40
  Speaker 8: consistent with our two percent inflation goal. How monetary policy
• 16:46
  Speaker 8: actions are guided by our dual mandate to promote maximum
• 16:49
  Speaker 8: employment and stable prices for the American people. At today's meeting,
• 16:54
  Speaker 8: the Committee decided to maintain the target range for the
• 16:57
  Speaker 8: federal funds rate at four and a quarter to four
• 16:59
  Speaker 8: and a half percent, and to continue reducing the size
• 17:02
  Speaker 8: of our balance sheet. We will continue to determine the
• 17:05
  Speaker 8: appropriate stance of monetary policy based on the incoming data,
• 17:09
  Speaker 8: the evolving.
• 17:09
  Speaker 6: Outlook, and the balance of risks.
• 17:13
  Speaker 8: Changes to government policies continue to evolve, and their effects
• 17:17
  Speaker 8: on the economy remain uncertain. Higher tariffs have begun to
• 17:21
  Speaker 8: show through more clearly to prices of some goods, but
• 17:24
  Speaker 8: their overall effects on economic activity and inflation remain to
• 17:27
  Speaker 8: be seen. A reasonable base case is that the effects
• 17:31
  Speaker 8: on inflation could be short lived, reflecting a one time
• 17:35
  Speaker 8: shift in the price level. But it is also possible
• 17:39
  Speaker 8: that the inflationary effects could instead be more persistent, and
• 17:42
  Speaker 8: that is a risk to be assessed and managed. Our
• 17:46
  Speaker 8: obligation is to keep longer term inflation's inflation expectations well
• 17:51
  Speaker 8: anchored and to prevent a one time increase in the
• 17:53
  Speaker 8: price level from becoming an ongoing inflation problem. For the
• 17:57
  Speaker 8: time being, we're well positioned to learn more about the
• 18:00
  Speaker 8: likely course of the economy and the evolving balance of
• 18:02
  Speaker 8: risks before adjusting our policy stance. We see our current
• 18:06
  Speaker 8: policy stance as appropriate to guard against inflation risks. We're
• 18:11
  Speaker 8: also attentive to risks on the employment side of our mandate.
• 18:14
  Speaker 8: In coming months, we will receive a good amount of
• 18:17
  Speaker 8: data that will help inform our assessment of the balance
• 18:19
  Speaker 8: of risks and the appropriate setting of the federal funds rate.
• 18:25
  Speaker 8: At this meeting, the Committee continued its discussions as part
• 18:27
  Speaker 8: of our five year review review of our monetary policy framework.
• 18:32
  Speaker 8: We focused on potential revisions to our statement on longer
• 18:35
  Speaker 8: run goals and monetary policy strategy, and are on track
• 18:38
  Speaker 8: to wrap up any modifications by late summer. The FED
• 18:43
  Speaker 8: has been assigned two goals for monetary policy, maximum employment
• 18:47
  Speaker 8: and price and stable prices. We remain committed to supporting
• 18:50
  Speaker 8: maximum employment, bringing inflation sustainably to our two percent goal,
• 18:54
  Speaker 8: and keeping longer term inflation expectations well anchored. Our success
• 18:59
  Speaker 8: in delivering on these goals matters to all Americans. We
• 19:03
  Speaker 8: understand that our actions affect communities, families, and businesses across
• 19:06
  Speaker 8: the country. Everything we do is in service to our
• 19:10
  Speaker 8: public mission. We at the FED will do everything we
• 19:13
  Speaker 8: can to achieve our maximumment and Priceles.
• 19:18
  Speaker 6: Thank you. I look forward to your questions. Thanks Thanks Chapelle.
• 19:25
  Speaker 6: There's a lot of lean in the markets.
• 19:27
  Speaker 9: And not to mention out of the administration for a
• 19:30
  Speaker 9: rate cut now in September.
• 19:33
  Speaker 10: Is that.
• 19:34
  Speaker 9: Expectation on realistic at this point.
• 19:38
  Speaker 8: So, as you know today, we decided to leave our
• 19:41
  Speaker 8: policy rate where it's been, which where I would characterize
• 19:44
  Speaker 8: as modestly restrictive. Inflation is running a bit above two percent.
• 19:49
  Speaker 8: As I mentioned, even excluding tariff effects, the labor market's solid,
• 19:53
  Speaker 8: historically low unemployment, financial conditions are accommodative in the economy
• 19:58
  Speaker 8: is not the economy is not performing a restrictive policy,
• 20:01
  Speaker 8: we're holding it back inappropriately. So it seems to me
• 20:06
  Speaker 8: and to almost the whole committee that the economy is
• 20:09
  Speaker 8: not performing as a restrictive policy is holding it back inappropriately,
• 20:13
  Speaker 8: and modestly restrictive policy seems appropriate. All that said, there's
• 20:17
  Speaker 8: also downside risk to the labor market. In coming months,
• 20:21
  Speaker 8: will receive a good amount of data that will help
• 20:24
  Speaker 8: inform our assessment of the balance of risks in the
• 20:27
  Speaker 8: appropriate setting of the federal funds rate.
• 20:30
  Speaker 9: Just to follow up by coming months, does that include
• 20:32
  Speaker 9: the possibility you'll be getting essentially two rounds of jobs
• 20:36
  Speaker 9: and inflation data between now and the September meeting. Is
• 20:40
  Speaker 9: that potentially adequate to make a decision to lower rates
• 20:43
  Speaker 9: at that point?
• 20:44
  Speaker 8: So you're right, we do have This is an intermeding
• 20:47
  Speaker 8: period when we'll get two full rounds of employment and
• 20:50
  Speaker 8: inflation data before the time of the September meeting. We
• 20:53
  Speaker 8: have made no decisions about September. We don't do that
• 20:55
  Speaker 8: in advance. We'll be taking that information into consideration and
• 20:59
  Speaker 8: all the other information we get as we make our
• 21:01
  Speaker 8: decision at the September meeting.
• 21:07
  Speaker 6: Thank you, Miss Sherman.
• 21:10
  Speaker 11: Do you took out the word or the notion that
• 21:12
  Speaker 11: uncertainty has diminished from this statement? Does that mean uncertainty
• 21:17
  Speaker 11: has increased? And I'm just wondering the administration has struck
• 21:21
  Speaker 11: several deals with large trading partners where it seems like
• 21:25
  Speaker 11: we now know what the rate is going to be.
• 21:27
  Speaker 11: Does knowing that rate add to your certainty to change
• 21:30
  Speaker 11: policy or do you need to wait to see the
• 21:33
  Speaker 11: economic effects?
• 21:36
  Speaker 8: So essentially, the statement in the in the in the
• 21:42
  Speaker 8: in our statement about uncertainty reflects what's gone on since
• 21:46
  Speaker 8: the last meeting. So at the time of the last meeting,
• 21:48
  Speaker 8: uncertainty had had moved down a little bit, but it
• 21:52
  Speaker 8: was more or less even this time, so we took
• 21:54
  Speaker 8: out you know, had diminished because it didn'tminish further. So
• 21:58
  Speaker 8: there's not really much end. And then your second question is, say, again.
• 22:04
  Speaker 11: There have been several deals that have been struck, and
• 22:06
  Speaker 11: now we seem to have an idea what the tariff
• 22:09
  Speaker 11: rates are going to be with some of our large
• 22:11
  Speaker 11: trading partners. Does that not add to the kind of
• 22:13
  Speaker 11: certainty you might need or is it you're waiting for
• 22:15
  Speaker 11: the economic effects to show themselves.
• 22:18
  Speaker 6: No, I think we're still so that you're right.
• 22:21
  Speaker 8: It's been a very dynamic time for these trade negotiations
• 22:24
  Speaker 8: and lots and lots of events in the intermting period,
• 22:28
  Speaker 8: but we're still, you know, a ways away from seeing
• 22:31
  Speaker 8: where things settle down. We are clearly getting more and
• 22:33
  Speaker 8: more information, and you know, I think at this point,
• 22:38
  Speaker 8: people's estimates, our estimates outside estimates of the of the
• 22:42
  Speaker 8: likely you know, effective effective level of tariffs is not
• 22:47
  Speaker 8: moving around that much at this point. But at the
• 22:49
  Speaker 8: same time, there are many many uncertainties left to resolve.
• 22:52
  Speaker 6: So yes, we are learning more and more.
• 22:55
  Speaker 8: It doesn't feel like we're very close to the end
• 22:57
  Speaker 8: of that process, and that's that's not for us to judge,
• 23:01
  Speaker 8: but it feels like there's much more to come, you
• 23:04
  Speaker 8: know as well looking ahead.
• 23:11
  Speaker 12: Height at Chairman Neil Arroma Axios. This morning, we've got
• 23:14
  Speaker 12: a GDP report in which final domestic private purchases decelerated
• 23:18
  Speaker 12: slowest patients twenty two. There was a weakness in the
• 23:21
  Speaker 12: interest sensitive sectors and residential investment commercial structures. Are those
• 23:24
  Speaker 12: not signs that monetary policy is a little too restrictive
• 23:27
  Speaker 12: right now given current economic conditions.
• 23:30
  Speaker 8: So the GDP and PDFP numbers came in pretty much
• 23:35
  Speaker 8: right where we expected them to come in.
• 23:37
  Speaker 6: You've got to look at the whole picture.
• 23:38
  Speaker 8: So certainly, as I mentioned in my opening remarks, economic
• 23:42
  Speaker 8: activity data GDP private domestic final purchases, which we think
• 23:46
  Speaker 8: is a narrow or but better signal for future for
• 23:50
  Speaker 8: where the economy is going, has come down to a
• 23:53
  Speaker 8: little better than one percent one point two percent i
• 23:55
  Speaker 8: think in the case of GDP for the first half,
• 23:58
  Speaker 8: whereas it was two and a half last year. So
• 24:00
  Speaker 8: that has certainly come down. But if you look at
• 24:03
  Speaker 8: the labor market, what you see is by many many statistics,
• 24:07
  Speaker 8: the labor market is kind of still in balance. It's
• 24:11
  Speaker 8: things like quits, you know, job openings, and let alone
• 24:15
  Speaker 8: the unemployment rate. They're all very by many measures, very
• 24:19
  Speaker 8: similar to where they were a year ago. So you
• 24:21
  Speaker 8: do not see weakening in the labor market. You do
• 24:24
  Speaker 8: see a slowing in job creation, but also in a
• 24:26
  Speaker 8: slowing a slowing in the supply of workers. So you've
• 24:29
  Speaker 8: got a labor market that's in balance, albeit partially because
• 24:34
  Speaker 8: both demand and supply for workers is coming down at
• 24:37
  Speaker 8: the same pace. And that's why the unemployment rate has
• 24:39
  Speaker 8: remained roughly roughly stable, which is why I said we
• 24:42
  Speaker 8: do see downside risk in.
• 24:44
  Speaker 6: The labor market.
• 24:45
  Speaker 8: I mean, our two are to mandate variables, right are
• 24:47
  Speaker 8: inflation and maximum imployment. Stable prices in maximum plument, not
• 24:51
  Speaker 8: so much growth. So the labor market looks looks solid.
• 24:56
  Speaker 8: Inflation is above target and even if you if you
• 24:59
  Speaker 8: look through the tiff effects, we think it's still a
• 25:01
  Speaker 8: bit above target. And that's why our stance is where
• 25:04
  Speaker 8: it is. But as I mentioned, you know, downside risks
• 25:07
  Speaker 8: to the labor market are certainly apparent.
• 25:09
  Speaker 12: So labor given the fluid labor supply situations. There are
• 25:12
  Speaker 12: a number for the SUD jobs before we get on
• 25:14
  Speaker 12: Friday that would look do you like equilibrium job growth?
• 25:17
  Speaker 8: You know, the main number you have to look at
• 25:19
  Speaker 8: now is the unemployment rate, because if it's true that
• 25:23
  Speaker 8: the you know, demand for workers in the form of
• 25:26
  Speaker 8: let's call it just say payroll jobs, that number has
• 25:28
  Speaker 8: come down, but so has the break even number, kind
• 25:30
  Speaker 8: of in tandem. So you know, as long as that
• 25:34
  Speaker 8: puts the labor market in balance, the fact that it's
• 25:37
  Speaker 8: getting into balance due to declines in both supply and demand,
• 25:42
  Speaker 8: I think does it is suggestive of downside risks, So
• 25:46
  Speaker 8: of course we'll be watching that carefully.
• 25:52
  Speaker 13: Thank you. Colby Smith with the New York Times. Two
• 25:56
  Speaker 13: of your colleagues called for our quarter point cut today,
• 25:58
  Speaker 13: and I'm wondering what aspects of their arguing, men, we're
• 26:00
  Speaker 13: most compelling to you, and how you're weighing their views
• 26:03
  Speaker 13: against those on the committee who, as of the June forecast,
• 26:08
  Speaker 13: were in the camp of the Fed holding interest rates
• 26:10
  Speaker 13: study for the remainder of the year, And just in
• 26:14
  Speaker 13: terms of the June SEP in particular, is that still
• 26:17
  Speaker 13: the best representation of where the core of the committee.
• 26:19
  Speaker 8: Is so on the descents, you know what you what
• 26:23
  Speaker 8: you want from everybody and also from a dissenter is
• 26:28
  Speaker 8: a clear explanation of what you're thinking is and what
• 26:31
  Speaker 8: are the arguments you're making, and.
• 26:32
  Speaker 6: That's we had that today.
• 26:33
  Speaker 8: So I think basically this was this was quite a
• 26:35
  Speaker 8: good meeting all around the table where people were you know,
• 26:39
  Speaker 8: thought carefully about this and put their positions out there.
• 26:43
  Speaker 8: As I mentioned, you know, the sort of the majority
• 26:47
  Speaker 8: of the committee was of the view that inflation is
• 26:50
  Speaker 8: a bit above target, maximum employment is at target. That
• 26:54
  Speaker 8: calls for modestly restrictive in my way of thinking, modestly
• 26:57
  Speaker 8: restrictive stance of policy for now. But we had two
• 27:02
  Speaker 8: dissenters who I think, you know, you want that clear
• 27:05
  Speaker 8: thinking and and you know, expression of your thinking, and
• 27:09
  Speaker 8: we certainly had that today.
• 27:11
  Speaker 6: I think all around the table in terms.
• 27:13
  Speaker 8: Of you ask about the June SEP, you know, I
• 27:17
  Speaker 8: wouldn't that you're right, that's what, that's what it says,
• 27:21
  Speaker 8: and that may that may well, I couldn't point to
• 27:25
  Speaker 8: it six weeks later as expressing people.
• 27:27
  Speaker 6: So you really can't do that.
• 27:28
  Speaker 8: We don't run an SEP, and I don't like to
• 27:30
  Speaker 8: substitute in my own estimate of what the SEP might be.
• 27:33
  Speaker 8: We don't have one, So I'll just say that, you know,
• 27:36
  Speaker 8: we haven't made any decisions that at September we'll be
• 27:39
  Speaker 8: monitoring all the incoming data and asking ourselves whether the
• 27:42
  Speaker 8: federal funds rate is in the right place.
• 27:44
  Speaker 13: And just on the point about policy being only modestly restrictive,
• 27:47
  Speaker 13: does that mean that there's actually not much scope to
• 27:50
  Speaker 13: reduce rates once the conditions for a cut are met
• 27:53
  Speaker 13: barring a significant weakening of the labor market.
• 27:56
  Speaker 8: So let me say my own estimate is modestly restrictive,
• 28:00
  Speaker 8: and there are a range of views of what the
• 28:02
  Speaker 8: neutral rate is at this moment for our economy, and
• 28:05
  Speaker 8: so others may say it's more restrictive or less restrictive.
• 28:08
  Speaker 8: Even uh, you know, we're we're going to be at
• 28:14
  Speaker 8: some point when we return to moving toward a more
• 28:17
  Speaker 8: neutral stance. We'll be making that judgment as we go.
• 28:20
  Speaker 8: I don't think we have a preset course. It's not
• 28:22
  Speaker 8: so mechanical as saying, you know, we've derived with great
• 28:26
  Speaker 8: confidence the neutral rate and that is our destination, because
• 28:29
  Speaker 8: really we understand that no one actually knows what the
• 28:31
  Speaker 8: neutral rate is. We know it by its works, and
• 28:34
  Speaker 8: that will be the way the economy reacts over time to,
• 28:38
  Speaker 8: you know, to slightly looser policy.
• 28:47
  Speaker 10: Nick Timrose, The Wall Street Journal chirp hell, My question
• 28:51
  Speaker 10: is about what have you learned over the last few
• 28:53
  Speaker 10: months about the inflation generating and price pass through process.
• 28:57
  Speaker 10: And just to drill down, the June CPI report showed
• 29:00
  Speaker 10: evidence of tariff induced goods inflation. Now the tariff landscape
• 29:04
  Speaker 10: is only starting to be settled with some of these
• 29:06
  Speaker 10: more recent deals.
• 29:07
  Speaker 6: Given the lags.
• 29:08
  Speaker 10: Between when tariffs are announced and when they show up
• 29:11
  Speaker 10: in goods prices, is two months a long enough horizon
• 29:16
  Speaker 10: to evaluate the impact and be confident that tariffs aren't
• 29:20
  Speaker 10: impacting the broader inflation process.
• 29:23
  Speaker 8: I think you have to think of this as still
• 29:25
  Speaker 8: quite early days, and so I think what we're seeing
• 29:28
  Speaker 8: now is substantial amounts of tariff revenue being collected, on
• 29:33
  Speaker 8: the order of thirty billion a month, which is substantially
• 29:36
  Speaker 8: higher than before, and the evidence seems to be mostly
• 29:41
  Speaker 8: not paid, paid only to a small extent through exporters
• 29:46
  Speaker 8: lowering their price and companies or retailers sort of people
• 29:51
  Speaker 8: who are upstream institutions that are upstream from the consumer
• 29:54
  Speaker 8: are paying most of this for now. Consumers are starting
• 29:58
  Speaker 8: to show up in consumer prices, as you know in
• 30:00
  Speaker 8: the June report. We expect to see more of that,
• 30:04
  Speaker 8: and we know from surveys that companies feel that they
• 30:07
  Speaker 8: have every intention of putting this through to the consumer,
• 30:11
  Speaker 8: but you know, the truth is they may not be
• 30:13
  Speaker 8: able to in many cases. So I think it's we're
• 30:16
  Speaker 8: just going to have to watch and learn empirically how
• 30:18
  Speaker 8: much of this and over what period of time. I
• 30:21
  Speaker 8: think we've learned that the process will probably be slower
• 30:26
  Speaker 8: than expected at the beginning, but we never expected it
• 30:29
  Speaker 8: to be fast, and we think we have a long
• 30:33
  Speaker 8: way to go to really understand exactly how we'll be.
• 30:36
  Speaker 6: So that's how we're thinking of it right now.
• 30:39
  Speaker 10: Follow through core goods inflation being driven by the judgment
• 30:43
  Speaker 10: that during the pandemic, expectations proved more adaptive than anyone
• 30:48
  Speaker 10: at the FED expected. Is it being driven by uncertainty
• 30:51
  Speaker 10: over how restrictive policy is.
• 30:53
  Speaker 8: You could argue we are a bit looking through goods
• 30:56
  Speaker 8: inflation by not raising rates. You know, we haven't reacted
• 30:59
  Speaker 8: to to new inflation, but I mean I wouldn't insist
• 31:02
  Speaker 8: upon that, but I don't think. I think the base
• 31:07
  Speaker 8: case I said, as I said, a reasonable base case
• 31:09
  Speaker 8: is that one time, one time price effects. Of course,
• 31:16
  Speaker 8: in the end there will not be this will not
• 31:18
  Speaker 8: turn out to be inflation, because we'll make sure that
• 31:21
  Speaker 8: it's not. We will throw our tools make sure that
• 31:23
  Speaker 8: this does not move from being a one time price
• 31:26
  Speaker 8: increase to serious inflation. We want to do that efficiently,
• 31:30
  Speaker 8: though efficiently, and that means we want to do it.
• 31:34
  Speaker 8: If you move too soon, you wind up maybe not
• 31:38
  Speaker 8: getting inflation all the way fixed and you have to
• 31:41
  Speaker 8: come back.
• 31:41
  Speaker 6: That's inefficient.
• 31:42
  Speaker 8: If you move too late, you might do too unnecessary
• 31:45
  Speaker 8: damage to the labor market, so there won't be in
• 31:49
  Speaker 8: the end and a big inflationary problem. What we're trying
• 31:52
  Speaker 8: to do is accomplish that in a way that is efficient.
• 31:56
  Speaker 8: But in the end there should be no doubt that
• 31:58
  Speaker 8: we will do what we need to do to keep
• 31:59
  Speaker 8: it fling under control. Ideally we do it efficiently.
• 32:07
  Speaker 14: Michael McKee from Bloomberg Television and Radio, The One Big
• 32:11
  Speaker 14: Bill leading inside the adjectives, do you expect it to
• 32:15
  Speaker 14: add stimulus to the economy in twenty twenty six, and
• 32:18
  Speaker 14: would that be an argument for remaining on hold or
• 32:21
  Speaker 14: cutting back on the number of rate cuts you would
• 32:23
  Speaker 14: expect for next year.
• 32:25
  Speaker 8: So, of course, let me just ritual disclaimer that we
• 32:28
  Speaker 8: don't express any judgments or anything later on physical legislation
• 32:31
  Speaker 8: or legislation for that matter. But I would say when
• 32:35
  Speaker 8: you think that, you know, the biggest part of the
• 32:37
  Speaker 8: bill was making permanent existing law on taxes, I don't
• 32:45
  Speaker 8: think we see it as as particularly stimulative. There should
• 32:48
  Speaker 8: be some stimulative effect, but it shouldn't be significant over
• 32:53
  Speaker 8: the next couple of years.
• 32:54
  Speaker 14: And to follow up, what do you well, I do
• 32:58
  Speaker 14: want to put this in terms of view and the President,
• 33:00
  Speaker 14: So let me ask it this way. Do you have
• 33:03
  Speaker 14: concerns about the cost to the government of keeping rates
• 33:08
  Speaker 14: elevated for longer terms of interest rate charges?
• 33:13
  Speaker 8: You know, that's you know, we have a mandate and
• 33:15
  Speaker 8: that's maximum employment and price stability, and it is it's
• 33:20
  Speaker 8: not something we do to consider the cost to the
• 33:25
  Speaker 8: government of our rate changes. We have to be able
• 33:28
  Speaker 8: to look at the goal variables Congress has given us,
• 33:31
  Speaker 8: use the tools they've given us to achieve those goals,
• 33:35
  Speaker 8: and that's what we do. We don't consider the fiscal
• 33:38
  Speaker 8: needs of the federal government. No Advanced Economy Central Bank
• 33:41
  Speaker 8: does that, and it wouldn't be good for if we
• 33:44
  Speaker 8: did do that, it would be good neither for our
• 33:46
  Speaker 8: credibility nor for the credibility of US fiscal policy. So
• 33:49
  Speaker 8: it's just not something we take into consideration.
• 33:54
  Speaker 15: Victoria Hi, Victoria with let it goo. When it comes
• 34:01
  Speaker 15: to the renovations of the Federal Reserves headquarters that the
• 34:05
  Speaker 15: administration has been looking into, do you see their interest
• 34:09
  Speaker 15: in that issue as being directly tied to the President's
• 34:11
  Speaker 15: pushed to get you to lower interest rates?
• 34:14
  Speaker 8: Not for me to say, I will say we had
• 34:17
  Speaker 8: we had a nice visit with the with the president.
• 34:19
  Speaker 6: It was an honor to host him.
• 34:21
  Speaker 8: It's not something that happens very often that the at
• 34:23
  Speaker 8: the Federal Reserve to have the President come over, let alone,
• 34:26
  Speaker 8: to visit a building.
• 34:27
  Speaker 6: But it was a good visit.
• 34:29
  Speaker 15: Are there any aspects of the project that they've raised
• 34:32
  Speaker 15: that you see as making you reconsider us any aspects
• 34:35
  Speaker 15: of the project.
• 34:37
  Speaker 8: So you know, this project was hatched and conceived almost
• 34:41
  Speaker 8: a decade ago now, and we went through the very
• 34:43
  Speaker 8: long process of clearing it through historic preservation at the
• 34:48
  Speaker 8: National Capital Planning Commission and a lot of back and forth.
• 34:51
  Speaker 6: There was very constructive.
• 34:53
  Speaker 8: We started out to do the work, and you were
• 34:57
  Speaker 8: very well along on that work. And I was quite
• 35:01
  Speaker 8: pleased to have the President say multiple times that what
• 35:03
  Speaker 8: he really wanted to see was was us getting this
• 35:07
  Speaker 8: construction completed as soon as possible. That is our focus,
• 35:11
  Speaker 8: and that's what.
• 35:12
  Speaker 6: We're going to do.
• 35:19
  Speaker 16: Thanks, mister chairman. Andrew Eckerman with the Washington Post, what
• 35:23
  Speaker 16: message do you take from the fact that inflation hit
• 35:25
  Speaker 16: two point one percent last September and has bounced higher
• 35:29
  Speaker 16: since Why do you think financial conditions are restrictive and
• 35:33
  Speaker 16: in neutral rates below four percent when inflation has stopped
• 35:36
  Speaker 16: falling for almost a year.
• 35:38
  Speaker 8: So inflation, when you talk about these twelve months inflation measures,
• 35:42
  Speaker 8: you're always battling residual seasonality. So we'll have, for example,
• 35:47
  Speaker 8: two months of high inflation sometimes early in the year,
• 35:50
  Speaker 8: and then inflation turns lower, and a lot of that
• 35:53
  Speaker 8: may just be an artifact. So that's why we look
• 35:55
  Speaker 8: at the twelve month numbers. Look, I think inflation is
• 35:59
  Speaker 8: most of the way back to two percent. There are
• 36:02
  Speaker 8: things like the catch up inflation, So for example, all
• 36:04
  Speaker 8: the insurance costs that are now they're only now going
• 36:08
  Speaker 8: through inflation, but they actually reflect inflation or pressures from
• 36:12
  Speaker 8: two three years ago.
• 36:13
  Speaker 6: So there's that's got to go through.
• 36:15
  Speaker 8: In addition, now we have you know, three or four
• 36:17
  Speaker 8: tenths of inflation in core inflation from tariffs, so and
• 36:22
  Speaker 8: we can't really separate that out. We're not going to
• 36:25
  Speaker 8: have a separate, you know, kind of inflation that isn't
• 36:28
  Speaker 8: the tariffs. We're always going to be dealing with the
• 36:29
  Speaker 8: whole all of inflation. But the composition, as I mentioned,
• 36:32
  Speaker 8: has really changed. And you know, if you go back
• 36:36
  Speaker 8: to the last couple of years, it was all about
• 36:39
  Speaker 8: services inflation, which was being very sticky. Now services inflation
• 36:42
  Speaker 8: is coming down nicely. Goods inflation was well behaved before,
• 36:46
  Speaker 8: and now goods inflation is going up. So the story
• 36:48
  Speaker 8: has really changed. That's partially because of tariffs. It's also
• 36:51
  Speaker 8: partially because we had restrictive policy in place.
• 36:54
  Speaker 6: And we've seen that.
• 36:56
  Speaker 8: The result of that gradually work its way through the
• 36:59
  Speaker 8: services economy.
• 37:01
  Speaker 16: Okay, the other thing I wanted to ask is are
• 37:03
  Speaker 16: you comfortable BLS can continue performing their mission effectively if
• 37:07
  Speaker 16: they taken eight percent reduction in headcount and authorized spending
• 37:10
  Speaker 16: as the administration's proposed.
• 37:12
  Speaker 8: I'm not going to comment on the administration's proposal. I
• 37:15
  Speaker 8: do think as I've said, I think that we know
• 37:18
  Speaker 8: we're getting the data that we need to do our jobs,
• 37:22
  Speaker 8: and I think it's really important that good data helps
• 37:26
  Speaker 8: not just the FED. It helps helps the government, but
• 37:28
  Speaker 8: it also helps the private sector. You know, people in
• 37:30
  Speaker 8: the economy, they use this data a lot too, So
• 37:34
  Speaker 8: it's quite important for our economy and certainly for the
• 37:37
  Speaker 8: fed's work and other government agencies work, that we continue
• 37:40
  Speaker 8: to get better at data. That's what we've been doing
• 37:43
  Speaker 8: for one hundred years. We've been getting better and better
• 37:45
  Speaker 8: and better. It's very hard to accurately capture in real
• 37:48
  Speaker 8: time the output of a twenty plus trillion dollar economy,
• 37:53
  Speaker 8: and the United States has been a leader in that for.
• 37:55
  Speaker 6: One hundred years, and we really need to continue that
• 37:57
  Speaker 6: in my view.
• 38:00
  Speaker 8: And learning.
• 38:03
  Speaker 10: Thank you, missus.
• 38:04
  Speaker 17: Chairman Edward Lawrence from Fox Business. How concerned are you
• 38:07
  Speaker 17: with with the data that we're showing coming in showing
• 38:09
  Speaker 17: no significant upward trend in inflation over the past six months,
• 38:13
  Speaker 17: that the weight and see approach for inflation is actually
• 38:15
  Speaker 17: giving companies cover to raise prices.
• 38:20
  Speaker 8: How concerned am I that they say that? Again, the
• 38:22
  Speaker 8: weight and see approach is giving a weight and see approach.
• 38:25
  Speaker 8: What do you mean for cutting rates?
• 38:27
  Speaker 17: You're waiting to see if the tariffs will affect inflation.
• 38:31
  Speaker 8: So it's a wait and see approach, so that you
• 38:33
  Speaker 8: know that would that's where policies restrictive. When we start
• 38:36
  Speaker 8: cutting it will go toward neutral.
• 38:38
  Speaker 6: Okay, it's delay though.
• 38:39
  Speaker 17: Where you're saying, is there one time, one time price
• 38:41
  Speaker 17: increase for tariffs which which possibly could lead into bigger
• 38:45
  Speaker 17: inflation or more inflation? Is that giving companies cover though
• 38:49
  Speaker 17: to raise prices?
• 38:50
  Speaker 6: Well, what may be giving it's not our policy stance.
• 38:54
  Speaker 8: What may be giving some companies will will certainly be
• 38:57
  Speaker 8: taking advantage of the fact that the tariffs and all
• 38:59
  Speaker 8: of the discussion of how they're going to the people.
• 39:02
  Speaker 8: You know, if companies will raise prices win and as
• 39:04
  Speaker 8: they can and you so you saw it famously in
• 39:07
  Speaker 8: the in the in the first administration of President Trump.
• 39:11
  Speaker 8: During those tariffs, washing machines were tariff but but but
• 39:16
  Speaker 8: dryers weren't. But what do you know, price? The price
• 39:18
  Speaker 8: of dryers went up too, just like uh, washing machines.
• 39:21
  Speaker 8: So companies will often just take across the street in
• 39:25
  Speaker 8: a group, if you know what I mean, that'll happen.
• 39:27
  Speaker 6: We don't see a lot of that.
• 39:29
  Speaker 8: I mean, what we see now is basically the very
• 39:31
  Speaker 8: beginnings of whatever the effects turn out to be on
• 39:34
  Speaker 8: goods inflation. And you know, I'll say again, they may be,
• 39:38
  Speaker 8: they may be less than then people estimate, or more
• 39:41
  Speaker 8: than people estimate. They're not going to be zero. Custom
• 39:44
  Speaker 8: consumers will pay some of this. Businesses will pay some
• 39:47
  Speaker 8: of this. Retailers will pay some of this.
• 39:50
  Speaker 6: But uh, you know, we're just going to have to
• 39:53
  Speaker 6: see it through and just follow if I could.
• 39:56
  Speaker 17: Some additional tariffs have been in place since February, and
• 39:59
  Speaker 17: they you know, really haven't broken yet with the economy.
• 40:03
  Speaker 17: So how do you justify to somebody who's looking for
• 40:05
  Speaker 17: a house, who's facing a seven percent mortgage and maybe
• 40:08
  Speaker 17: can't afford those rates, how do you justify it?
• 40:11
  Speaker 8: Well, so housing is a special case, right our we
• 40:18
  Speaker 8: don't set we don't set mortgage rates at the FED.
• 40:20
  Speaker 8: Right we set an overnight rate, and the rates that
• 40:24
  Speaker 8: go into mortgages are longer term rates like treasury rates
• 40:27
  Speaker 8: might be thirty year rates it might be shorter than that,
• 40:29
  Speaker 8: but it's not the overnight FEDS rate. It's not that
• 40:31
  Speaker 8: we don't have any effect. We do have an effect,
• 40:33
  Speaker 8: but we're not the main effect. There are the things
• 40:36
  Speaker 8: going on in the housing sector, and one of those
• 40:41
  Speaker 8: is just there's a kind of a long term housing
• 40:43
  Speaker 8: shortage that we have. We haven't built enough housing. This
• 40:46
  Speaker 8: is not something that FED can help with. But then
• 40:48
  Speaker 8: that'll be the case even after things normalize.
• 40:51
  Speaker 6: So I think the best.
• 40:54
  Speaker 8: Thing that we can do for housing is to have
• 40:56
  Speaker 8: two percent inflation and maximum employment. And that's that's what
• 41:01
  Speaker 8: we can contribute to housing. There are lots of other
• 41:04
  Speaker 8: jobs to do for the private sector in Congress, but
• 41:07
  Speaker 8: that's what we're trying to get to. I mean, we've
• 41:08
  Speaker 8: made a lot of progress toward that we're in. We
• 41:10
  Speaker 8: have a very good labor market right now. Inflation we
• 41:13
  Speaker 8: were very close to two percent. We're seeing some goods
• 41:15
  Speaker 8: inflation move us away, but so far not very far away.
• 41:24
  Speaker 18: Hi chirpal, thank you. Well. Can you give us a
• 41:27
  Speaker 18: little more about what kind of economic data does the
• 41:29
  Speaker 18: FED need to see before you'll be ready to cut
• 41:32
  Speaker 18: I mean, do you need inflation back nearly to target?
• 41:36
  Speaker 18: Are there other things in the pricing that you look
• 41:38
  Speaker 18: for if you need to see weakening the job market?
• 41:41
  Speaker 18: What kind of things are you are you looking for?
• 41:44
  Speaker 8: I mean, ultimately it's it could be any could be
• 41:47
  Speaker 8: any of those things, right. But but you know, if
• 41:51
  Speaker 8: you saw that the risks to the two goals were
• 41:55
  Speaker 8: moving into balance, if they were fully in balance, that
• 41:57
  Speaker 8: would imply that you should move toward a more a
• 42:00
  Speaker 8: more neutral stance of policy. This is this is the
• 42:03
  Speaker 8: special situation we're in, which is we have two sided
• 42:05
  Speaker 8: risk risk to both of our goals.
• 42:08
  Speaker 6: When we paused, inflation.
• 42:11
  Speaker 8: Was was above target and the labor market was pretty good.
• 42:15
  Speaker 8: So so you know that was a time when policy
• 42:19
  Speaker 8: policy was restrictive when we when we pause, and to
• 42:21
  Speaker 8: be restrictive is to be to be supporting a return
• 42:25
  Speaker 8: to our inflation target. Right, So as the two targets
• 42:28
  Speaker 8: get back into balance, you would you would think you'd
• 42:31
  Speaker 8: move in a way closer to new steps likely to
• 42:35
  Speaker 8: be in that direction. What will it take, you know,
• 42:38
  Speaker 8: it'll just take. It'll be the totality of the evidence.
• 42:41
  Speaker 8: As I mentioned, there's quite a lot of data coming
• 42:43
  Speaker 8: in which before the next meeting, will it be dispositive
• 42:46
  Speaker 8: of that.
• 42:47
  Speaker 6: I you know, it's really hard to say.
• 42:49
  Speaker 8: We don't make those decisions and right now, so we'll
• 42:52
  Speaker 8: have to.
• 42:53
  Speaker 18: See, well, I guess just in terms of inflation though
• 42:55
  Speaker 18: for example, like we'll some people would point to if
• 43:00
  Speaker 18: it remains only in goods and it doesn't bleed over
• 43:02
  Speaker 18: to services, then maybe that's evidence that the effect is
• 43:06
  Speaker 18: going to be a temporary, one time thing. Is that
• 43:09
  Speaker 18: kind of thing effect you're thinking? Or do you just
• 43:11
  Speaker 18: need to see the number come down? I think closer too.
• 43:14
  Speaker 18: We'll look at everything. You know, it's.
• 43:18
  Speaker 8: As I mentioned, you know, a pretty reasonable base case
• 43:21
  Speaker 8: is that this will be a one time price increase,
• 43:25
  Speaker 8: and in the end we'll make sure that that's the case.
• 43:27
  Speaker 8: We're just trying to do that efficiently, and efficiently means
• 43:31
  Speaker 8: getting the timing right. So if we go if we
• 43:34
  Speaker 8: cut rates too soon, maybe we didn't finish the job
• 43:37
  Speaker 8: with inflation. There's history is dotted with examples of that.
• 43:40
  Speaker 8: If you cut too late, then maybe you're doing unnecessary
• 43:43
  Speaker 8: damage to the labor market. So we're trying to We're
• 43:45
  Speaker 8: trying to get that timing right, and that's effectively what
• 43:49
  Speaker 8: we're doing.
• 43:51
  Speaker 7: Clear Clyde Jones, Financial Times just a question on the dollar.
• 43:59
  Speaker 7: We've seen it decline quite heavily this year. I was
• 44:02
  Speaker 7: wondering if there's been any discussion about that at the
• 44:05
  Speaker 7: meetings and how to what degree that may be complicating
• 44:08
  Speaker 7: your attempts to get inflation back to target.
• 44:12
  Speaker 8: So this goes back to the division of labor between
• 44:14
  Speaker 8: the FED and the Treasury, as you, I'm sure know,
• 44:17
  Speaker 8: and you know that the Treasury only speaks to this
• 44:22
  Speaker 8: picks to the dollar. It's not something that's been a
• 44:26
  Speaker 8: topic of, you know, major discussion at all at the
• 44:32
  Speaker 8: at the FED.
• 44:33
  Speaker 6: I won't say it doesn't come up.
• 44:34
  Speaker 8: If the transcripts when they come out in a few years,
• 44:36
  Speaker 8: they'll probably reflect some mentions of the dollar, but it
• 44:38
  Speaker 8: would never be a major focus.
• 44:41
  Speaker 7: Just to follow on if I made it Andrew's question,
• 44:44
  Speaker 7: I think the amount of imputed data in CPI now
• 44:47
  Speaker 7: is to thirty five percent. I mean, is there any
• 44:50
  Speaker 7: discussion of that as well? Is there any consideration of
• 44:53
  Speaker 7: looking at alternative measures, data scraping and so on in
• 44:56
  Speaker 7: order to just ensure you've got a good read on
• 45:00
  Speaker 7: what's happening to prices in the US economy.
• 45:02
  Speaker 6: Thank you, Yeah, we're so, We're monitoring the situation. We do,
• 45:05
  Speaker 6: of course.
• 45:06
  Speaker 8: I mean, as you know, during the pandemic, we looked
• 45:09
  Speaker 8: at a whole lot of new kinds of data. People
• 45:12
  Speaker 8: are looking at big data sets that you can get
• 45:14
  Speaker 8: from all sorts of places, and we do all of that.
• 45:18
  Speaker 8: But at the same we really need the government data
• 45:21
  Speaker 8: really is the gold standard in data, and we need
• 45:23
  Speaker 8: it to be you know, to be good and be
• 45:27
  Speaker 8: able to rely on it. And we're not going to
• 45:30
  Speaker 8: be able to substitute for that, but if we have
• 45:33
  Speaker 8: to make do with what we have, but I certainly
• 45:35
  Speaker 8: hope that we get what we need.
• 45:40
  Speaker 19: Jay O'Brian, I'm mister chairman j O'Brien, ABC News. President
• 45:46
  Speaker 19: Trump has obviously invoked your name a lot. He has
• 45:50
  Speaker 19: personally pressured you. Are you concerned the way that conduct
• 45:54
  Speaker 19: might impact the Fed's independence going forward?
• 45:59
  Speaker 8: I'll just say that, so, I think that having an
• 46:02
  Speaker 8: independent central bank has been an institutional arrangement that has
• 46:07
  Speaker 8: served the public well, and as long as it serves
• 46:10
  Speaker 8: the public well, it should continue and be respected. If
• 46:14
  Speaker 8: it didn't serve the public well, then then it wouldn't
• 46:17
  Speaker 8: be something that we should just automatically defend.
• 46:19
  Speaker 6: But what it gives us and other central banks.
• 46:22
  Speaker 8: What it gives you is the ability to make these
• 46:25
  Speaker 8: these very challenging decisions that in ways that are focused
• 46:29
  Speaker 8: on the data and the evolving outlook, the balance of
• 46:31
  Speaker 8: risks and all the things we talk about, and not
• 46:34
  Speaker 8: political factors. And so governments all over the advanced economy
• 46:38
  Speaker 8: world have chosen to put a little bit of distance
• 46:41
  Speaker 8: between direct political control of those decisions and the decision makers.
• 46:46
  Speaker 6: So if you were, if you.
• 46:48
  Speaker 8: Weren't, if you were not to have that, that would
• 46:50
  Speaker 8: be a great temptation, of course, to use interest rates
• 46:55
  Speaker 8: to affect elections, for example, and that's something that we
• 46:59
  Speaker 8: don't want to do.
• 47:00
  Speaker 6: I think that's pretty widely understood.
• 47:01
  Speaker 8: Certainly it is in Congress, and I mean, I think
• 47:06
  Speaker 8: it's very important.
• 47:06
  Speaker 6: I'll just say that, Maria.
• 47:09
  Speaker 20: Elisa after an unster Powell Marielaauro from lumber News, you
• 47:19
  Speaker 20: mentioned a slow down in consumer spending and I wanted
• 47:23
  Speaker 20: to see if you could walk us through what was
• 47:25
  Speaker 20: the discussion with the committee around that. We've seen delinquency
• 47:29
  Speaker 20: rates rising for upper income households, how do you see
• 47:33
  Speaker 20: that evolving in the next few months, and how much
• 47:36
  Speaker 20: of vulnerability that is for g economy going forward.
• 47:41
  Speaker 8: Consumer spending had been very, very strong for the last
• 47:45
  Speaker 8: couple of years and had repeatedly forecasters, not just US,
• 47:50
  Speaker 8: had been forecasting it would slow down, and now maybe
• 47:54
  Speaker 8: it finally has. So I would say, you know, if
• 47:59
  Speaker 8: you talk to credit card companies, for example, they will
• 48:03
  Speaker 8: tell you that the consumers in solid shape and that
• 48:06
  Speaker 8: spending is at a healthy level. It's not growing rapidly,
• 48:09
  Speaker 8: but it's at a healthy level, and delinquencies are not
• 48:12
  Speaker 8: a problem. You mentioned high end delinquencies. I don't know
• 48:15
  Speaker 8: what to make of that. I read the same thing,
• 48:16
  Speaker 8: but so generally, and if you look at the banks
• 48:19
  Speaker 8: and when the banks talk about in their earnings calls,
• 48:23
  Speaker 8: the performance of credit has been good. So essentially you
• 48:26
  Speaker 8: have a consumer that's in good shape and is spending
• 48:29
  Speaker 8: not at a rapid rate. But it's true and it
• 48:34
  Speaker 8: was again right in a line with what we expected
• 48:37
  Speaker 8: the GDP data that we got this week. So and
• 48:42
  Speaker 8: I think it's still a little bit difficult to interpret
• 48:44
  Speaker 8: because you have these massive swings in net exports, which
• 48:49
  Speaker 8: which may also be affecting you know, some of that
• 48:51
  Speaker 8: can be affected by can affect consumer spending as well.
• 48:54
  Speaker 8: Look it's one of the data points that we pay
• 48:57
  Speaker 8: most careful attention to, and there's no question that it's slowed,
• 49:02
  Speaker 8: and you know we're watching it closely. But we also
• 49:04
  Speaker 8: watched the labor market and the formance of inflation. Those
• 49:06
  Speaker 8: are our two Those are our two variables that were
• 49:08
  Speaker 8: assigned to to maximize.
• 49:10
  Speaker 20: And just to follow up on what my colleagues were
• 49:12
  Speaker 20: asking about this sense, Governor Water said that the labor
• 49:16
  Speaker 20: market is on edge, and he was pointing to weaknesses
• 49:19
  Speaker 20: on the private sector.
• 49:21
  Speaker 6: I was wondering, you've said that the main.
• 49:23
  Speaker 20: Number to look at is the unemployment number overall, but
• 49:26
  Speaker 20: what was the discussion about the state of the private
• 49:29
  Speaker 20: jobs market.
• 49:31
  Speaker 8: So I'm not going to talk about any individuals, you know,
• 49:34
  Speaker 8: any individual's comments.
• 49:35
  Speaker 6: I wouldn't do that.
• 49:36
  Speaker 8: But look, I think what we know is that private
• 49:41
  Speaker 8: sector job creation, certainly in the last report we'll see
• 49:46
  Speaker 8: on Friday, but had come down a bit.
• 49:49
  Speaker 6: And if you take.
• 49:51
  Speaker 8: The QCW adjustment seriously, which it may be even low,
• 49:58
  Speaker 8: maybe close to zero, but the unemployment rate is still
• 50:03
  Speaker 8: was still low. So what that's telling you is that
• 50:06
  Speaker 8: that you know, demand for workers is slowing, but so
• 50:09
  Speaker 8: is the supply. So that's about it's in balance. Oddly enough,
• 50:13
  Speaker 8: you've got a very low unemployment rate and it's kind
• 50:16
  Speaker 8: of been there for a year as job creation has
• 50:19
  Speaker 8: moved down. But also we know that, you know, because
• 50:22
  Speaker 8: of immigration policy, really the flow into our labor forces
• 50:26
  Speaker 8: is just a great deal slower. And those two things
• 50:28
  Speaker 8: have slowed more or less in tandem. If you look
• 50:31
  Speaker 8: at things like I mentioned quits, look at wages, wages
• 50:35
  Speaker 8: are gradually cooling, Look at vacancies to unemployment, those things
• 50:41
  Speaker 8: have been pretty stable for they haven't really moved a.
• 50:44
  Speaker 6: Lot in a full year.
• 50:45
  Speaker 8: So broad I think if you take the totality of
• 50:47
  Speaker 8: the labor market data, you've got a solid labor market.
• 50:50
  Speaker 8: But I think you have to see that there are
• 50:52
  Speaker 8: downside risks. It's not you don't see weakening in the
• 50:55
  Speaker 8: labor market, but I think you've got downside risks in
• 50:58
  Speaker 8: a world where unemploy it's being held down because both
• 51:01
  Speaker 8: demand and supply are declining. I think that's it's worth
• 51:04
  Speaker 8: paying close attention to it, and we are.
• 51:08
  Speaker 4: Nancy hi jair Pal Nancy Marshall Ginzer with Marketplace. One
• 51:17
  Speaker 4: more question on the lack of unanimity in today's decision
• 51:21
  Speaker 4: the two descents. Was there talk during the meeting. I
• 51:24
  Speaker 4: know you're not going to talk about what exactly what
• 51:26
  Speaker 4: individuals said, but in general, was there talk during the
• 51:29
  Speaker 4: meeting of cutting rates and what was the case against
• 51:32
  Speaker 4: that at the meeting?
• 51:33
  Speaker 9: Sure?
• 51:34
  Speaker 8: So you know, we have an economic go around or
• 51:37
  Speaker 8: where people talk about the economy, and then the next
• 51:39
  Speaker 8: and today, that's yesterday, and then today we have a
• 51:41
  Speaker 8: monetary policy arm All the way around the table, everyone.
• 51:44
  Speaker 6: Gives their views.
• 51:45
  Speaker 8: So the discussion around policy was the majority view was
• 51:51
  Speaker 8: still what it has been, which is that inflation is
• 51:54
  Speaker 8: running above target, maximum employment is right at target. That
• 51:58
  Speaker 8: means policy should be a little bit restrictive, somewhat restrictive
• 52:02
  Speaker 8: because we want we want inflation to move all the
• 52:05
  Speaker 8: way back to its target. So that's where people have
• 52:08
  Speaker 8: been and still are. Two of our members felt that
• 52:13
  Speaker 8: the time had come to cut and that they for
• 52:15
  Speaker 8: the reasons that they're they're going to express, I want,
• 52:17
  Speaker 8: I want, they'll issue some kind of of a thing
• 52:21
  Speaker 8: in the next day or so.
• 52:22
  Speaker 6: So, but that's the story.
• 52:25
  Speaker 8: And I would say, you know, well, argued very thoughtfully
• 52:28
  Speaker 8: argued all around the table, good arguments, and you know,
• 52:32
  Speaker 8: it's a situation where unusual situation.
• 52:36
  Speaker 6: The economy is in you know, good shape.
• 52:39
  Speaker 8: But it's it's it's an unusual situation where you have
• 52:42
  Speaker 8: risks to both your employment mandate and your inflation. Man.
• 52:44
  Speaker 8: That's that's the nature of a supply shock, and it's
• 52:47
  Speaker 8: probably not surprising that there would be differences and different
• 52:51
  Speaker 8: perspective on that, as well as different views of where
• 52:55
  Speaker 8: the neutral rate is, so that different views of how
• 52:58
  Speaker 8: how tight policy is. So we have those, I will say,
• 53:01
  Speaker 8: what you hope is that people, you know, explain their
• 53:05
  Speaker 8: positions very thoughtfully and clearly, and we absolutely had that
• 53:08
  Speaker 8: today all the way around the table. I would call
• 53:10
  Speaker 8: it one of the better meetings I can recall from
• 53:13
  Speaker 8: that standpoint.
• 53:14
  Speaker 4: And you've said you're waiting to be confident inflation is
• 53:17
  Speaker 4: heading towards your two percent target before you start cutting rates.
• 53:21
  Speaker 4: When you do get that confidence, would you be in
• 53:24
  Speaker 4: would you be in flowing rates right away?
• 53:29
  Speaker 6: It's not not quite the way I would put it,
• 53:31
  Speaker 6: you know.
• 53:32
  Speaker 8: I said, that's why we think policy should should be restrictive,
• 53:34
  Speaker 8: is because you know, inflation is above target. When we
• 53:40
  Speaker 8: have risks to both goals, one of them is farther
• 53:46
  Speaker 8: away from goal than the other, and that's inflation MAXI.
• 53:48
  Speaker 6: Employment's that goal. So you have to that means policy.
• 53:51
  Speaker 8: Should be type because tight policy is what brings inflation down.
• 53:54
  Speaker 8: If you came to the view that the risks to
• 53:56
  Speaker 8: the two were more in balance, that would imply that
• 53:59
  Speaker 8: policy shouldn't be restrictive. It should be more neutral, more more,
• 54:04
  Speaker 8: you know, a neutral stance, and that would be somewhat
• 54:06
  Speaker 8: lower than where we are now. No one knows exactly
• 54:08
  Speaker 8: where that is. So that's that's the framework I think
• 54:11
  Speaker 8: I'd be taking. And you know, well, let's have to
• 54:16
  Speaker 8: see that. We're going to be obviously looking at a
• 54:18
  Speaker 8: lot of data in the next cycle. It is one
• 54:20
  Speaker 8: of the cycles where we have two employment and two
• 54:23
  Speaker 8: inflation reports, and we'll see where that takes us.
• 54:27
  Speaker 1: Jeff Us.
• 54:32
  Speaker 21: Thank you, mister Sherman for taking the question. Jeff Cox
• 54:34
  Speaker 21: from CNBC dot com. A metric that you like to
• 54:37
  Speaker 21: cite a lot as a final sales to private domestic
• 54:39
  Speaker 21: purchasers that was down to one point two percent gain
• 54:44
  Speaker 21: in a second quarter from one point nine percent. Thank
• 54:48
  Speaker 21: you one suggesting that there's some softening and underlying demand.
• 54:51
  Speaker 21: I just wondering if you look at that you combine
• 54:53
  Speaker 21: that with some of the housing numbers, the weakness that
• 54:56
  Speaker 21: you acknowledge that at the top of your remarks that
• 54:58
  Speaker 21: that the housing market is in fact, and the inflation
• 55:02
  Speaker 21: numbers from GDP today came down two point one percent
• 55:05
  Speaker 21: for headline, two point five percent for core. I'm wondering
• 55:08
  Speaker 21: how much more movement you would need to see from
• 55:11
  Speaker 21: these data points before you would be comfortable with cutting
• 55:15
  Speaker 21: in say September.
• 55:18
  Speaker 8: It's going to be the total hard hard to answer
• 55:21
  Speaker 8: that specifically. PDFP I think for the first half private
• 55:24
  Speaker 8: domestic final purchases or final sales as people call it,
• 55:28
  Speaker 8: was one point six on the first half. GDP I
• 55:31
  Speaker 8: believe was one point two percent. That's the whole half.
• 55:34
  Speaker 8: You mentioned the quarters, so those are slower, but you
• 55:37
  Speaker 8: know GDP is bumpy quarter to quarter, half to half
• 55:42
  Speaker 8: and often gets revised, you know, after the fact.
• 55:46
  Speaker 6: The labor market data we we still think is.
• 55:50
  Speaker 8: Data we have on the economy, and that shows a
• 55:52
  Speaker 8: four point one percent unemployment rate. It shows wages, you know,
• 55:57
  Speaker 8: still at a healthy level, but moving ever close or
• 56:00
  Speaker 8: to what we would regard as long run sustainable consistent
• 56:03
  Speaker 8: with longer run productivity, and two percent inflation, So the labor.
• 56:06
  Speaker 6: Market is actually still quite solid.
• 56:09
  Speaker 8: Inflation is above target even ignoring tariffs, it's a little
• 56:13
  Speaker 8: bit above target and tariffs. So we're watching all of
• 56:16
  Speaker 8: that and again trying to trying to do the right thing.
• 56:23
  Speaker 8: And what is a challenging situation because you're being pulled
• 56:26
  Speaker 8: in two directions and you have to decide which of
• 56:29
  Speaker 8: those it took to go in and actually, at some
• 56:32
  Speaker 8: point if there if they're sort of equally at risk,
• 56:35
  Speaker 8: then you really want to be at a neutral policy stance,
• 56:37
  Speaker 8: which we're not right now.
• 56:39
  Speaker 21: So it'd be safe to say that if the data
• 56:40
  Speaker 21: kind of stays in line with where it is right now,
• 56:42
  Speaker 21: that you wouldn't be comfortable with cutting it.
• 56:44
  Speaker 6: I'm not going to I'm not going to say that, no, I.
• 56:49
  Speaker 8: I just think we're going to need to see the
• 56:50
  Speaker 8: data and it can go in many different directions, the
• 56:55
  Speaker 8: inflation data and and the UH employment data, and we'll
• 57:00
  Speaker 8: just we're going to make a judgment based on all
• 57:02
  Speaker 8: of the data and based on that balance of risks
• 57:04
  Speaker 8: analysis that I mentioned.
• 57:05
  Speaker 3: Thank you, great Rob.
• 57:12
  Speaker 22: Thanks to chair pal Greg Rob from market Watch. The
• 57:16
  Speaker 22: Treasury Secretary has said recently that it would be confusing
• 57:20
  Speaker 22: for the markets if you stayed on as a governor
• 57:23
  Speaker 22: after your term on a chair ends. And I was
• 57:26
  Speaker 22: wondering if you had any update for us on a
• 57:29
  Speaker 22: decision on that front.
• 57:31
  Speaker 8: Sorry, I do not have any update for you. Thanks
• 57:33
  Speaker 8: very much everyone.
• 57:42
  Speaker 2: All right, So a couple of things going on here.
• 57:45
  Speaker 22: Guys.
• 57:45
  Speaker 2: It looks like Chair Pal is being much more hawkish
• 57:49
  Speaker 2: than anticipated and is Trump over speaking right now? Because
• 57:53
  Speaker 2: I imagine the amount of rhetoric that is going to
• 57:56
  Speaker 2: come out of the White House right now, expect some
• 57:58
  Speaker 2: pretty heavy situations coming in from not only Trump, but
• 58:02
  Speaker 2: I'm most likely the generals including Bess and Lutnik, etc.
• 58:06
  Speaker 2: That'll go into this, because I think they're still looking
• 58:08
  Speaker 2: at September as being in potential. The question is, because
• 58:12
  Speaker 2: we had a couple jobs reports coming in, we are
• 58:14
  Speaker 2: nearing a potential here of where stagflation could play into this.
• 58:17
  Speaker 2: If we do get a lagging inflation raise because of
• 58:22
  Speaker 2: tariffs like he believes that they're going to get. If
• 58:26
  Speaker 2: that occurs, and at the same time we start to
• 58:29
  Speaker 2: see job loss into the market, that could be a
• 58:32
  Speaker 2: very big concern in general for the economy because it
• 58:35
  Speaker 2: would put the FED in a bad position and would
• 58:38
  Speaker 2: put them in a too late issue, because that's the
• 58:41
  Speaker 2: factor that usually plays into this. And of course many
• 58:44
  Speaker 2: people now saying it may not even be a rate
• 58:46
  Speaker 2: cut by the end of the year.
• 58:48
  Speaker 1: I was just looking at polymarket. This was August. Well,
• 58:51
  Speaker 1: this was the fire pow out in August. Starty first.
• 58:55
  Speaker 2: So it's right now it's holding it a ten percent,
• 58:56
  Speaker 2: even though that was only at eight just a little
• 58:59
  Speaker 2: bit ago. So I don't know, do you guys think
• 59:02
  Speaker 2: that this is going to continue to put pressure? Do
• 59:04
  Speaker 2: you believe we'll have a rate cut by the end
• 59:08
  Speaker 2: of the year, whether it's September, we won't have a
• 59:10
  Speaker 2: meeting in August. Possibly see this all the way through
• 59:14
  Speaker 2: December before we see a rate cut, or could the
• 59:17
  Speaker 2: unthinkable happen, and that is Powell holds the position throughout
• 59:22
  Speaker 2: the entire year while holding the pressure from Trump. This
• 59:27
  Speaker 2: is going to get very, very heated. So stick around
• 59:31
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• 59:33
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• 59:35
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• 59:40
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• 59:42
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• 59:46
  Speaker 2: only some of the projects are going, but also I
• 59:48
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• 59:50
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• 59:53
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• 59:55
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