Latest / The Paul Barron Crypto Show / Rate Hike Decision🚨Fed Meeting🔴Kevin Warsh

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Rate Hike Decision🚨Fed Meeting🔴Kevin Warsh · The Paul Barron Crypto Show

• 0:00
  Speaker 1: The live stream today we're going to be doing and
• 0:02
  Speaker 1: airing the FOMC meeting and we'll get into.
• 0:04
  Speaker 2: All of that for you. But before we get started,
• 0:07
  Speaker 2: because we've got news of course it will cover.
• 0:09
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• 0:58
  Speaker 1: let's go into the topic for today, and if you're
• 1:01
  Speaker 1: brand new to this livestream. One thing that we will do,
• 1:05
  Speaker 1: and we air these mostly live often, is we'll go
• 1:10
  Speaker 1: in and we'll do a little bit of analysis around
• 1:12
  Speaker 1: this what kind of market indicators we could be having.
• 1:16
  Speaker 2: But then we'll get into Kevin.
• 1:18
  Speaker 1: Warsher's address that he'll do with of course the Press Corp.
• 1:23
  Speaker 1: And that essentially is what we're wanting to watch because
• 1:26
  Speaker 1: those statements coming in from the FED chair to the press,
• 1:30
  Speaker 1: that is usually when we get an indicator of forward
• 1:33
  Speaker 1: looking statements. And this is a very critical time because
• 1:36
  Speaker 1: the Fed has not necessarily been giving any kind of
• 1:40
  Speaker 1: indications on forward looking statements, so this may be the
• 1:43
  Speaker 1: meeting to watch.
• 1:45
  Speaker 2: Of course, the news day as.
• 1:47
  Speaker 1: We start recording is that the Federal Reserve leads interest
• 1:50
  Speaker 1: rates unchanged, so it is a pause remaining at three
• 1:53
  Speaker 1: point five to three seven five, and this is what
• 1:57
  Speaker 1: we anticipated. I think a lot of people, even though
• 1:59
  Speaker 1: Citadel was calling for a rate hike, most people were
• 2:02
  Speaker 1: in a position of saying pause was the route.
• 2:05
  Speaker 2: Now, it doesn't mean that.
• 2:06
  Speaker 1: This will be the case that it holds in the
• 2:09
  Speaker 1: October and into the fall, because now people are looking
• 2:14
  Speaker 1: at the potential for possibly an October rate hike, so
• 2:18
  Speaker 1: be on the lookout for that. And if you look
• 2:20
  Speaker 1: at this in comparison to what has been going on
• 2:23
  Speaker 1: in the past, and this is kind of an interesting
• 2:26
  Speaker 1: statement right here when you put this into perspective. Since
• 2:28
  Speaker 1: the end of two thousand and eight, that was the
• 2:30
  Speaker 1: financial crisis, the FED has held one hundred and thirty
• 2:33
  Speaker 1: five FOMC meetings, which is what we're going to be
• 2:36
  Speaker 1: airing today. Four of them, or three percent, have seen
• 2:39
  Speaker 1: the odds of our rate hike sit between thirty and
• 2:42
  Speaker 1: sixty percent in the days leading up to the decision.
• 2:45
  Speaker 1: According to this as a Bianco, markets have rarely been
• 2:48
  Speaker 1: this uncertain. And that's the point is that we saw
• 2:51
  Speaker 1: a rise in potential rate hikes even on this meeting
• 2:56
  Speaker 1: late last week and early this week, and I think
• 2:58
  Speaker 1: this has been the condition of the market is really
• 3:01
  Speaker 1: just not knowing how the FED is going to be
• 3:04
  Speaker 1: able to deal with this. Within that, you've got, of course,
• 3:07
  Speaker 1: some macro things that continue to put pressure on the market.
• 3:10
  Speaker 1: One of course, is Trump, who's continuing to do tip
• 3:14
  Speaker 1: for tat with Iran. We have targets now hit in
• 3:18
  Speaker 1: American targets hit in Jordan, and of course with that
• 3:21
  Speaker 1: comes a penalty in the.
• 3:23
  Speaker 2: Market right there.
• 3:25
  Speaker 1: Six hundred and seventy billion wiped out from US stocks
• 3:27
  Speaker 1: today and this course was as Trump was telling he's
• 3:31
  Speaker 1: going to beat the you know what out of Iran,
• 3:33
  Speaker 1: and he's very upset with his negotiation because there is none,
• 3:37
  Speaker 1: and we continue to go on. This looks like it's
• 3:39
  Speaker 1: going to lead on for quite a bit more time.
• 3:43
  Speaker 1: And I think this is the problem that we have
• 3:45
  Speaker 1: faced with markets. Some markets are a little bit I
• 3:49
  Speaker 1: would say, numb to this right now, but at the
• 3:52
  Speaker 1: same time, we are seeing pretty significant issues.
• 3:56
  Speaker 2: That will cause problems with the FED. Part of that.
• 4:00
  Speaker 2: I wonder how Kevin.
• 4:01
  Speaker 1: Wortsh is going to deal with this today with the news.
• 4:03
  Speaker 1: But more importantly is the news of this right here,
• 4:06
  Speaker 1: which is oil back up to eighty four dollars, and
• 4:09
  Speaker 1: this is of course back after the situation that just
• 4:12
  Speaker 1: happened with Iran. And remember this dropped down to low
• 4:15
  Speaker 1: seventies or high seventies, which is typically the hot.
• 4:19
  Speaker 2: Zone seventy five bucks a barrel.
• 4:21
  Speaker 1: According to my oil baron friend, is that that is
• 4:24
  Speaker 1: the kind of the sweet spot for oil companies to
• 4:27
  Speaker 1: make money but not be too hard on the economy.
• 4:29
  Speaker 2: Energy being one of.
• 4:30
  Speaker 1: The biggest catalysts that drives the issue around consumer inflation.
• 4:36
  Speaker 1: So energy, of course, as you guys feel it, everybody
• 4:39
  Speaker 1: I think out there is feeling that is the price
• 4:41
  Speaker 1: at the pump is now going to start to get hit. Now,
• 4:43
  Speaker 1: these whipsaw approaches is very difficult because I think you
• 4:47
  Speaker 1: probably see this, guys, is that the whipsaw of gas
• 4:50
  Speaker 1: prices between you know, if you're under you four dollars
• 4:54
  Speaker 1: a gallon right now in some places up to as
• 4:57
  Speaker 1: high as four point fifty, just like overnight. So that
• 5:00
  Speaker 1: is an issue right now that I think will continue
• 5:03
  Speaker 1: to put pressure on the macro side of where the
• 5:06
  Speaker 1: market is going to be heading. If you look at
• 5:08
  Speaker 1: just an example of crude and kind of charting this
• 5:12
  Speaker 1: all the way back here we'll go into February of
• 5:15
  Speaker 1: this year, essentially is.
• 5:16
  Speaker 2: When it began.
• 5:18
  Speaker 1: The volatility has been somewhat up and then back down
• 5:22
  Speaker 1: here in the eighties, this got down here to the
• 5:24
  Speaker 1: lowest when we thought we had a deal. We were
• 5:27
  Speaker 1: back at sixty bucks a barrel, sixty eight bucks a barrel,
• 5:30
  Speaker 1: and then of course when that got broken and the
• 5:33
  Speaker 1: ceasefire stopped, and of course Israel continues their campaigns, then
• 5:38
  Speaker 1: the strikes start and with that rises the oil prices.
• 5:43
  Speaker 1: So this is the issue we are facing right now.
• 5:46
  Speaker 1: Don't forget guys. If you want, we may try to
• 5:48
  Speaker 1: take a few questions for you at the end or
• 5:51
  Speaker 1: some of them, maybe even during the meeting, just so
• 5:55
  Speaker 1: you know that. The way we do this is we'll
• 5:58
  Speaker 1: air this.
• 6:00
  Speaker 2: Usually all give.
• 6:00
  Speaker 1: Comments after we listened to Kevin Walsh and he'll go
• 6:04
  Speaker 1: on at two thirty and that's when that will go live.
• 6:07
  Speaker 1: Typically they'll most of the time they're on time, and
• 6:10
  Speaker 1: immediately they'll go into questions.
• 6:13
  Speaker 2: And these questions, as I.
• 6:14
  Speaker 1: Said earlier, is that these are very critical to look
• 6:17
  Speaker 1: at forward looking statements because this will determine and really
• 6:21
  Speaker 1: what we're watching for is is he hawkish in the
• 6:25
  Speaker 1: sense of potentially a rate increase before the end of
• 6:28
  Speaker 1: the year. If he is, then that could spell problems
• 6:32
  Speaker 1: for crypto in general, but it could also spell problems
• 6:35
  Speaker 1: I think for traditional markets that are going to be
• 6:39
  Speaker 1: on issue as we go forward. And if you look
• 6:42
  Speaker 1: at the markets right now, they are all kind of
• 6:45
  Speaker 1: looking at should we hike or should we not hike?
• 6:47
  Speaker 2: Listen to what CNBC said.
• 6:50
  Speaker 3: Hike hold or cut, hike, hike now, hikes tomorrow? Why
• 6:54
  Speaker 3: because the economy is fine. Inflation risk us to the upside.
• 7:00
  Speaker 4: The Fed cut seventy five last year, the last move
• 7:03
  Speaker 4: very contentious when it was in December, to guard against
• 7:06
  Speaker 4: unwanted weakness in the labor market. Labor market's healthier, stabilize,
• 7:10
  Speaker 4: it's improving. Take back that easing.
• 7:12
  Speaker 2: And if you're Kevin.
• 7:13
  Speaker 4: Worsh and you're looking at the trends in the data,
• 7:16
  Speaker 4: you want the meetings to be live. This is a
• 7:18
  Speaker 4: perfect opportunity to hike because it's not going to be
• 7:20
  Speaker 4: a total shock, but it'll be a mild surprise relative
• 7:23
  Speaker 4: to market pricing, and you move away from the Bernanky
• 7:26
  Speaker 4: Yellen Powell timeline of always signaling a bias and then
• 7:31
  Speaker 4: reconfirming let's say at Jackson Hole, and then doing it
• 7:33
  Speaker 4: at the September meeting, etc.
• 7:35
  Speaker 5: I agree that a hike could be warranted here. I
• 7:38
  Speaker 5: would think the hiking by surprise would be a much
• 7:42
  Speaker 5: more perilous route to go down. So I would suggest
• 7:44
  Speaker 5: that if Kevin Warrish wants to hike rates, he ought
• 7:47
  Speaker 5: to let the market price that ahead.
• 7:48
  Speaker 2: I bet he'd rather not telling you that yeah, I
• 7:51
  Speaker 2: kind of agree.
• 7:52
  Speaker 1: I bet he would rather not tell anybody either, And
• 7:55
  Speaker 1: I think that's the point. You've got a kind of
• 7:57
  Speaker 1: Wall Street on the fence right now because they are
• 8:00
  Speaker 1: pushing at an economy that has been very strong. And
• 8:03
  Speaker 1: I know many of you would say, well, Paul, the
• 8:06
  Speaker 1: economy has not been strong. We are seeing rising prices everywhere.
• 8:10
  Speaker 1: But when you look at the reality of the S
• 8:13
  Speaker 1: and P five hundred and maybe to a certain extent,
• 8:15
  Speaker 1: even in the precious metals market or even crypto where
• 8:18
  Speaker 1: it is right now, there has still been some stability,
• 8:21
  Speaker 1: and I think that is the factor that we are
• 8:23
  Speaker 1: facing right now. One thing to consider, and I'm kind
• 8:26
  Speaker 1: of curious. We just to a poll for this of
• 8:29
  Speaker 1: whether or not worsh is going to mention anything on
• 8:32
  Speaker 1: Clarity Act. Right now here is the poll complete at
• 8:34
  Speaker 1: three hundred ninety three votes, and fifty five percent of
• 8:37
  Speaker 1: you said no, thirty two percent at yes, and a
• 8:41
  Speaker 1: few people I don't know, so almost split down the
• 8:44
  Speaker 1: middle on yes or no for Clarity Act mentioned, I
• 8:47
  Speaker 1: don't think he's going to mention it.
• 8:49
  Speaker 2: And the reason is there's such a.
• 8:52
  Speaker 1: Volatile nature of what's going on with Clarity We are
• 8:55
  Speaker 1: going to be doing a clarity video tomorrow morning that.
• 8:58
  Speaker 2: Is going to be very critical.
• 9:00
  Speaker 1: We have two days left, really, I think this week
• 9:03
  Speaker 1: to get this text over to thun to where we
• 9:06
  Speaker 1: can possibly get a vote on this in early August.
• 9:09
  Speaker 1: And I think this is the issue that right now
• 9:12
  Speaker 1: Warsh would probably try to avoid. So that's kind of
• 9:14
  Speaker 1: where I think he is going to land.
• 9:16
  Speaker 2: Is none of that now. Franklin Templeton came out and.
• 9:20
  Speaker 1: Talked a little bit about if we were to see
• 9:23
  Speaker 1: rate hikes or flat how or what kind of impact
• 9:27
  Speaker 1: would that have on crypto.
• 9:28
  Speaker 6: Take a look, so crypto trades with a pretty strong
• 9:33
  Speaker 6: inverse correlation to rates and real yields. So if the
• 9:39
  Speaker 6: market thinks that the FED is going to raise rates,
• 9:42
  Speaker 6: particularly in an environment where we don't have a really
• 9:46
  Speaker 6: strong economy. We have a good economy, it's a concentrated
• 9:50
  Speaker 6: economy focused around the AI sector, that would not be
• 9:54
  Speaker 6: good for crypto. So it's interesting last night you had
• 10:00
  Speaker 6: a broker come out saying they expected a surprise rate hight,
• 10:05
  Speaker 6: and you saw an immediate step down in Bitcoin and
• 10:08
  Speaker 6: the broader ecosystem.
• 10:10
  Speaker 7: Look, we also had a chip sell off and some
• 10:13
  Speaker 7: margin calls that were coming in that too can be
• 10:17
  Speaker 7: something that affects crypto, all.
• 10:20
  Speaker 1: Right, Chip sell off margin calls, Yeah, all of that
• 10:24
  Speaker 1: is going to be the related AI trade that's out
• 10:26
  Speaker 1: there right now. And I think a lot of you,
• 10:28
  Speaker 1: maybe well maybe not a lot some of you, I
• 10:31
  Speaker 1: know because I see it in the comments that you
• 10:33
  Speaker 1: are making AI trades on a variety of things. And
• 10:37
  Speaker 1: we've talked about these in the past, and there are
• 10:39
  Speaker 1: some out there that were good winners. But when you
• 10:41
  Speaker 1: look at the current memory and chip stocks right now, semiconductors,
• 10:46
  Speaker 1: it's pretty much down right now, even with sk Heinex
• 10:50
  Speaker 1: after just listing down forty seven percent, Microon down twenty eight,
• 10:54
  Speaker 1: which is the big winner of this year, Western Digital
• 10:56
  Speaker 1: down twenty eight, AMD twelves, some c down five. So
• 11:01
  Speaker 1: there's been a hit and I think we'll continue to
• 11:04
  Speaker 1: see a hit on these stocks at least for some time.
• 11:08
  Speaker 1: And the key here is going to be how these
• 11:10
  Speaker 1: hyperscalers continue to spend. And I think this will of
• 11:14
  Speaker 1: course equate to one of two paths that will happen
• 11:18
  Speaker 1: for crypto. One path, of course, is hyperscalers continue to
• 11:22
  Speaker 1: level up and we see an extended run in the
• 11:25
  Speaker 1: S and P five hundred primarily tied to AI, or
• 11:28
  Speaker 1: we finally get somebody that flinches, And what I mean
• 11:31
  Speaker 1: by that is somebody says we're pausing, and I'm talking
• 11:34
  Speaker 1: about a major So if we get that kind of situation,
• 11:38
  Speaker 1: that I think is the rotational message for capital to
• 11:42
  Speaker 1: be looking for alternative outlets, and that of course means crypto.
• 11:47
  Speaker 1: Other things that you have to look at is kind
• 11:49
  Speaker 1: of the volatility level of this. Bloomberg kind of hit
• 11:52
  Speaker 1: on it right here. Crypto traders bring me coins style
• 11:54
  Speaker 1: volatility to AI.
• 11:56
  Speaker 2: Stocks, and I would agree with that.
• 11:58
  Speaker 1: We are seeing that kind of volatility across the S
• 12:02
  Speaker 1: and P five hundred companies that are trading above the
• 12:05
  Speaker 1: two hundred DMA.
• 12:06
  Speaker 2: So point being is.
• 12:07
  Speaker 1: There's a typical process of how certain investors play into this.
• 12:13
  Speaker 1: And one of the things that really kind of triggers
• 12:17
  Speaker 1: much of this is these macro headwinds. And as we
• 12:20
  Speaker 1: see the AI trade continue out, even though Bloomberg often
• 12:23
  Speaker 1: will say and many of their analysts saying that AI
• 12:27
  Speaker 1: is still on a uptrend here overall, I think we
• 12:31
  Speaker 1: might be looking for a pause here very soon with
• 12:34
  Speaker 1: some of these AI stocks. So again, this is not
• 12:36
  Speaker 1: financial I said you should go out in vest I
• 12:38
  Speaker 1: think if if you're in the AI trade now, the
• 12:40
  Speaker 1: question is do you exit or do you write this
• 12:42
  Speaker 1: one out a little bit further. If you're not in
• 12:44
  Speaker 1: the AI trade, then that's probably not a trade for you.
• 12:47
  Speaker 1: I think I'd be looking at crypto as the alternative
• 12:50
  Speaker 1: because of the rotational aspect of assets that will be
• 12:54
  Speaker 1: rotating into crypto soon. Valshon has hit on something that's
• 12:57
  Speaker 1: kind of interesting here, and what he's talking about is
• 13:02
  Speaker 1: what has been going on in general with Korea and
• 13:05
  Speaker 1: of course the big issue and we did a video
• 13:07
  Speaker 1: on this right now. One of the big reasons that
• 13:09
  Speaker 1: we saw some of the dips within the Korean stock
• 13:13
  Speaker 1: exchange and the trigger that they've been pulling was really
• 13:17
  Speaker 1: geared toward some of the memory and chip makers, and
• 13:21
  Speaker 1: the reason was CXMT. We've talked about this before, is
• 13:25
  Speaker 1: that the Chinese market has kind of caused a lot
• 13:27
  Speaker 1: of that. But yet what they did was that they
• 13:30
  Speaker 1: blamed this on the politicians at least blamed this on
• 13:33
  Speaker 1: a two x leverage ETF. And I think this is
• 13:36
  Speaker 1: just kind of the typical thing they had to come
• 13:39
  Speaker 1: out with something because of these circuit breakers being thrown
• 13:43
  Speaker 1: and I think this is just going to be a
• 13:45
  Speaker 1: continued and this is a good example, guys. This is
• 13:47
  Speaker 1: a good example of rotation of capital where you see
• 13:51
  Speaker 1: something coming out as a good stock as Samsung is
• 13:54
  Speaker 1: seeing something coming out of something like that, which is
• 13:57
  Speaker 1: a blue chip in the Korean Stock Exchange, rotating into
• 14:00
  Speaker 1: some of these Chinese chip makers that potentially could see
• 14:04
  Speaker 1: massive upside. So that is an example of how this
• 14:09
  Speaker 1: capital is rotating. Now take that and apply that to
• 14:14
  Speaker 1: what could happen in AI with a rotation or even
• 14:17
  Speaker 1: with a pro clarity position. That could happen, and where
• 14:21
  Speaker 1: does crypto go from there? So two things are going
• 14:24
  Speaker 1: to happen. You don't get clarity and you get a
• 14:26
  Speaker 1: market hit we continue to see the macro had wins
• 14:29
  Speaker 1: that push, and you get a federate. Those are the
• 14:32
  Speaker 1: three things that could be bad for the rest of
• 14:34
  Speaker 1: the year. A federate increase and that would be later
• 14:37
  Speaker 1: this fall. Those are the three things we're watching very
• 14:40
  Speaker 1: closely that would be catalysts to really push crypto into
• 14:44
  Speaker 1: a last ditch capitulation. The alternative to that is clarity
• 14:50
  Speaker 1: gets through, and of course if that happens, it changed
• 14:53
  Speaker 1: I think the dynamic in general of where this goes.
• 14:56
  Speaker 2: And let me know what you guys think.
• 14:58
  Speaker 1: Do you think if Clarity US go through, is this
• 15:01
  Speaker 1: a long term pump or is this maybe a pump
• 15:04
  Speaker 1: and dump? Just let me know when the comments down below.
• 15:07
  Speaker 1: As I said, we'll be taking some questions. We'll stay
• 15:10
  Speaker 1: on top of the FED meeting. As you'll see, they're
• 15:12
  Speaker 1: going to be coming on here in about five minutes,
• 15:15
  Speaker 1: and I want to wrap up on a few points
• 15:17
  Speaker 1: here before we get going here to Chair Warsh And
• 15:23
  Speaker 1: it is our investor and this is something that our
• 15:25
  Speaker 1: investor has been talking about for some time. Crypto consolidation, bankruptcies,
• 15:29
  Speaker 1: shut downs to increase in the coming months is what
• 15:32
  Speaker 1: they think is going to happen here.
• 15:34
  Speaker 2: And if you look at not only that, how does
• 15:37
  Speaker 2: this play for.
• 15:38
  Speaker 1: The crypto industry with a deeper consolidation than previous bear markets.
• 15:43
  Speaker 1: That's really a concern right now because the are we
• 15:47
  Speaker 1: and have we.
• 15:48
  Speaker 2: Seen enough of a pullback?
• 15:49
  Speaker 1: Because many people would kind of look at bitcoin and say, no,
• 15:52
  Speaker 1: I think bitcoin has kind of gone down. In reality,
• 15:55
  Speaker 1: it has not gone down to its positions that we
• 15:57
  Speaker 1: have seen in the past, So is there another sub
• 16:00
  Speaker 1: sixty k Bitcoin waiting for us in the cards? You've
• 16:04
  Speaker 1: got hyper liquid and pumped off fund account for sixty
• 16:07
  Speaker 1: seven percent of total application revenue. All top three projects
• 16:10
  Speaker 1: including Athena, all of those account for nearly eighty So
• 16:14
  Speaker 1: this is the kind of situation that could start to
• 16:16
  Speaker 1: balance out in the market. Of course, that's being what's
• 16:20
  Speaker 1: happening with the ARC. Also, we'll get into this right here,
• 16:24
  Speaker 1: because you've got a lot of institutional investors now dumping
• 16:27
  Speaker 1: tech stocks at a rapid pace, and this again could
• 16:30
  Speaker 1: get into a signal.
• 16:33
  Speaker 2: Could this be the signal.
• 16:35
  Speaker 1: Right now that tells us that something is brewing in
• 16:39
  Speaker 1: DC for clarity or just a rotation of certain capital
• 16:45
  Speaker 1: and some of these head funds they're finally saying now
• 16:48
  Speaker 1: is the time to get into the semiconductor sell offs.
• 16:51
  Speaker 1: So all of that is in play right now in
• 16:54
  Speaker 1: the market, and I think this is the pressure that
• 16:56
  Speaker 1: we may see in the coming months, in coming weeks
• 16:59
  Speaker 1: as we play into this. The other thing that happened
• 17:01
  Speaker 1: was Morgan Stanley launching an ethereum and salon it ETPs.
• 17:04
  Speaker 2: This is all staking.
• 17:06
  Speaker 1: Within YSE and what it means is that Morgan Stanley
• 17:10
  Speaker 1: is going to end up returning stake profits out to
• 17:13
  Speaker 1: its holders, which is insane. Within this, I've got a
• 17:17
  Speaker 1: clip on this that goes into what they're going to do.
• 17:20
  Speaker 2: This is Morgan Stanley. Take a look.
• 17:23
  Speaker 8: We wanted to include staking in it from an ETF
• 17:26
  Speaker 8: perspective to add that additional yield you can see from
• 17:29
  Speaker 8: an ether perspective, historically that's ran about two to three percent,
• 17:32
  Speaker 8: around like two point eight percent of additional yield, and
• 17:35
  Speaker 8: then for Salona around.
• 17:37
  Speaker 9: Six to eight percent.
• 17:38
  Speaker 8: So that is where we're positioning the products. And as
• 17:40
  Speaker 8: I said, each issuer has structured their products for take
• 17:45
  Speaker 8: home fees. You know they will take a cut of
• 17:48
  Speaker 8: those Slana rewards or Ether rewards, and we're looking to
• 17:51
  Speaker 8: pass back one hundred of the one hundred percent of
• 17:53
  Speaker 8: the rewards for that.
• 17:55
  Speaker 1: Do you guys realize how big of a statement that is.
• 17:59
  Speaker 1: This is TRADFI traditional finance. That is a position now
• 18:05
  Speaker 1: that they actually are returning some profits from these investments
• 18:10
  Speaker 1: that have been out there doing Tom Lee like strategies
• 18:13
  Speaker 1: for some time. Plus you're looking at maybe a shift
• 18:17
  Speaker 1: in the tide right now of traditional finance. You've got
• 18:20
  Speaker 1: Blackrock Fidelity, Schwab, Goldman, and Franklin Templeton all together they
• 18:25
  Speaker 1: manage over thirty trill in assets and they all want
• 18:29
  Speaker 1: the Clarity Act, and that is a huge step in
• 18:32
  Speaker 1: the right directions. Think this through for a second. These
• 18:36
  Speaker 1: kinds of banks that are out there and have the
• 18:40
  Speaker 1: ears of most of the Senators that most likely will
• 18:43
  Speaker 1: be voting either for or against Clarity, and I think
• 18:47
  Speaker 1: the question is whether or not they can get the
• 18:49
  Speaker 1: bill to the floor. If they get the bill to
• 18:52
  Speaker 1: the floor, that's where I think the crypto industry may
• 18:55
  Speaker 1: win because I think when you look at the pressure
• 18:57
  Speaker 1: of trad fi and you look at the track record
• 19:01
  Speaker 1: of a lot of these politicians really kind of looking
• 19:03
  Speaker 1: at the bank industry as one of their soft cushions
• 19:05
  Speaker 1: to land on. Now you've got the kings of the
• 19:09
  Speaker 1: trad file market starting to support this. It starts to
• 19:12
  Speaker 1: paint a different picture in DC and I don't think
• 19:16
  Speaker 1: it's going to change. There is pressure though, that is
• 19:19
  Speaker 1: mounting in the consumer side of things. When you have
• 19:22
  Speaker 1: John Oliver, who is a massive, massive personality one point
• 19:27
  Speaker 1: eight million views. And this is all in reference to
• 19:29
  Speaker 1: taking jabs at Trump and his crypto holdings. And that's
• 19:33
  Speaker 1: the point is this is becoming a mainstream topic that
• 19:37
  Speaker 1: many people may not necessarily be aware, because there's a
• 19:39
  Speaker 1: lot of people out there that are not holding crypto,
• 19:41
  Speaker 1: not of watching our show, and probably not even understanding
• 19:44
  Speaker 1: what clarity is truly about. And this right here, I
• 19:47
  Speaker 1: think is a good example of the kind of level
• 19:50
  Speaker 1: of awareness that Americans are going to be getting in
• 19:54
  Speaker 1: just the next few months, if in fact, we get
• 19:57
  Speaker 1: clarity through Now I know this is not about clarity.
• 19:59
  Speaker 1: It's more about where the FED is heading, and we'll
• 20:02
  Speaker 1: be going to that here in just a second.
• 20:03
  Speaker 2: Looks like he is coming up.
• 20:05
  Speaker 1: To the podium, so let's go live to Kevin Walsh.
• 20:13
  Speaker 9: Good day.
• 20:16
  Speaker 10: My second FMC committee meeting as chairman has come quickly.
• 20:21
  Speaker 10: It's probably too early to call it a streak, but
• 20:24
  Speaker 10: our discussions, again were collegial and constructive. I'm truly lucky
• 20:29
  Speaker 10: to work with colleagues so capable and mission focused and
• 20:33
  Speaker 10: so determined like I am, to sharpen the performance of
• 20:37
  Speaker 10: the Federal Reserve.
• 20:39
  Speaker 9: Today, as you know.
• 20:40
  Speaker 10: Our committee decided to vote by a nine to three
• 20:43
  Speaker 10: vote to maintain the target range for the Federal Fund's
• 20:46
  Speaker 10: rate at three and one half to three and three
• 20:48
  Speaker 10: quarters percent. The Committee is continuing its policy of making
• 20:52
  Speaker 10: ample reserves in the banking system. The economy is showing
• 20:57
  Speaker 10: impressive resilience even with recent shocks. The trends are positive
• 21:03
  Speaker 10: and reveal solid growth. Job gains have kept pace with
• 21:07
  Speaker 10: the workforce, and the unemployment rate has changed little. Inflation
• 21:13
  Speaker 10: remains elevated relative to the committee's two percent goal. The
• 21:17
  Speaker 10: Committee remains resolute. You've heard this before, but we will
• 21:22
  Speaker 10: deliver price stability as before. The policy statement conveys just
• 21:27
  Speaker 10: the facts. It's steering clear of forecasting, a choice we
• 21:32
  Speaker 10: consider especially prudent at these uncertain times. Uncertainty, however, does
• 21:39
  Speaker 10: not mean a lack of clarity for some households, businesses,
• 21:43
  Speaker 10: and market professionals. Five years of high inflation have left
• 21:47
  Speaker 10: a mistaken impression that's hard to shake that the Fed's
• 21:52
  Speaker 10: implicit inflation target was somehow above two percent. Let me reiterate,
• 21:58
  Speaker 10: there is no soft inflation target. There is no soft
• 22:03
  Speaker 10: implicit target, not on this Committee's watch. There's only a target,
• 22:08
  Speaker 10: and it's two percent. Not one of my FMC colleagues
• 22:13
  Speaker 10: is under any illusion. We have begun a new chapter,
• 22:17
  Speaker 10: and we understand that the five plus years of inflation
• 22:21
  Speaker 10: above target cannot be cured in nine weeks or by
• 22:26
  Speaker 10: a single month of modest price decreases.
• 22:30
  Speaker 9: This FED will not waiver.
• 22:33
  Speaker 10: Our credibility rests on performing our duties and delivering on
• 22:37
  Speaker 10: our responsibilities. Americans are right to expect that, because our
• 22:43
  Speaker 10: nation's prosperity depends on it. To the regulars here in
• 22:47
  Speaker 10: the press room, today's assessment might sound familiar, Yet there
• 22:52
  Speaker 10: was nothing inertial about our discussions, our policy, or our strategy.
• 22:58
  Speaker 10: Two economic developments worth highlighting. The first is a very
• 23:03
  Speaker 10: notable change since our last meeting forty two days ago.
• 23:08
  Speaker 10: Nominal and real yields are materially higher across the treasury curve.
• 23:14
  Speaker 10: In fact, some of the increases in market interest rates
• 23:17
  Speaker 10: between FMC meetings are among the most significant in the
• 23:22
  Speaker 10: last two decades, ranking around the top decile or so.
• 23:27
  Speaker 10: But if the Committee didn't change its policy rate, what
• 23:30
  Speaker 10: happened in the inter meeting period. Market attention centered on
• 23:35
  Speaker 10: real data and real economic developments. Prices reacted in real
• 23:41
  Speaker 10: time to incoming information, and the reduction in forward guidance
• 23:47
  Speaker 10: may have been a factor. Market participants are learning to
• 23:51
  Speaker 10: play the ball, not the referee, and market prices will
• 23:55
  Speaker 10: continue to respond in the direction and magnitude they see fit.
• 24:01
  Speaker 10: This is, in my view, a change for the better,
• 24:04
  Speaker 10: and we're just getting started.
• 24:07
  Speaker 9: After all.
• 24:07
  Speaker 10: The Central Bank need not always everywhere be the center
• 24:11
  Speaker 10: of attention. I understand the desire for rolling forecasts in
• 24:16
  Speaker 10: commentary from this committee, but for our part, we need
• 24:20
  Speaker 10: to observe market reaction to developments direct and unfiltered. I
• 24:26
  Speaker 10: want to stress, of course, that decisions by this Committee
• 24:30
  Speaker 10: matter a great deal, and where necessary and appropriate.
• 24:35
  Speaker 9: We will not hesitate to act.
• 24:38
  Speaker 10: A second economic development is one that I noted at
• 24:42
  Speaker 10: the Congressional Oversight hearings this month, but it's worth repeating.
• 24:47
  Speaker 10: The most striking feature of the economy is the strong
• 24:50
  Speaker 10: growth of business investment. The surge in high tech CAPEX
• 24:55
  Speaker 10: has been remarkable, but that does not necessarily make the
• 24:59
  Speaker 10: Fed's role any easier. In the AI related category of
• 25:04
  Speaker 10: high tech equipment and software, the most recent data shows
• 25:08
  Speaker 10: four quarter growth rates of nearly twenty percent. This is
• 25:13
  Speaker 10: helping to sustain the healthy momentum of manufacturing output. More generally,
• 25:20
  Speaker 10: cap X is preparing the ground.
• 25:22
  Speaker 9: For future growth.
• 25:24
  Speaker 10: Nonetheless, the precise timing and magnitude of effects on the
• 25:28
  Speaker 10: supply side remain hard to predict. FMC meetings produced policy decisions,
• 25:37
  Speaker 10: but just as important is candid discussion of the big
• 25:41
  Speaker 10: things that matter most. That, too, is a priority in
• 25:46
  Speaker 10: this new chapter. At the FED, in our meeting, vigorous
• 25:50
  Speaker 10: discussions centered on four questions which I will enumerate. First,
• 25:56
  Speaker 10: we talked a lot about the implications of the past
• 25:59
  Speaker 10: five years of high inflation on the current policy conjuncture.
• 26:04
  Speaker 9: To echo an old phrase, has the past really passed?
• 26:10
  Speaker 10: Second, my colleagues and I considered the economic shocks of
• 26:15
  Speaker 10: recent years, strained supply chains arising from the pandemic, military conflicts,
• 26:22
  Speaker 10: energy supply disruptions, substantial increases in teriff rates, and yes,
• 26:28
  Speaker 10: the surge in AI related investment. These differ in their sources.
• 26:34
  Speaker 10: Do they also differ in their effects on output and employment? Third,
• 26:40
  Speaker 10: we took up the related question of price increases arising
• 26:43
  Speaker 10: from shocks. The business capex boom, for example, is driving
• 26:48
  Speaker 10: up prices of memory and logic chips and associated AI infrastructure.
• 26:54
  Speaker 10: Do these changes indicate a broader inflationary dynamic or do
• 26:59
  Speaker 10: we just focus on because they are under the bright
• 27:02
  Speaker 10: Street light. Finally, we discuss monetary policy tools and strategies
• 27:09
  Speaker 10: for achieving stable prices. If, as the FED is long held,
• 27:14
  Speaker 10: interest rate policy should be its primary monetary policy instrument,
• 27:19
  Speaker 10: how much accommodation are we getting from the balance sheet
• 27:23
  Speaker 10: In all of this, our work is advancing at the FED.
• 27:28
  Speaker 10: We're asking the right questions, and in this consequential time
• 27:33
  Speaker 10: we know how very much depends on getting the right answers.
• 27:37
  Speaker 10: Of course, you've all arrived with questions of your own,
• 27:40
  Speaker 10: so let's turn to them now.
• 27:43
  Speaker 11: To start with.
• 27:43
  Speaker 5: Steep, thank you for taking our questions. Mister chairman. Share
• 27:51
  Speaker 5: You've had a couple months now, or nine weeks or
• 27:54
  Speaker 5: whatever number it is to see the markets behave in
• 27:58
  Speaker 5: the absence of forward guidance. I'm wondering if you could
• 28:02
  Speaker 5: tell me what message are you getting from the markets
• 28:06
  Speaker 5: as to where policy ough to be right now?
• 28:09
  Speaker 10: Yeah, so, I think officially it's eight weeks and four days,
• 28:12
  Speaker 10: but I'm not counting the message from markets is the
• 28:18
  Speaker 10: message for markets. What I've really been trying to do, Steve,
• 28:22
  Speaker 10: as I think you appreciate your colleagues appreciate, is getting
• 28:25
  Speaker 10: an unfiltered message from markets, getting a direct message letting
• 28:30
  Speaker 10: buyers and sellers meet at prices for treasuries, for the
• 28:33
  Speaker 10: foreign exchange value of the dollar, and then trying to
• 28:36
  Speaker 10: judge for ourselves what does that mean about our remit
• 28:39
  Speaker 10: How are we doing on inflation, how are we doing
• 28:42
  Speaker 10: on employment. We're trying not to interfere with that market signal.
• 28:47
  Speaker 10: That's part of the reason why we've been somewhat spare
• 28:49
  Speaker 10: in our words. Well, we've pulled back from forward guidance,
• 28:53
  Speaker 10: so they're reacting to events, I would say much more
• 28:56
  Speaker 10: directly over the forty two days.
• 28:58
  Speaker 9: Since we last met. This is a good thing.
• 29:01
  Speaker 10: As I mentioned in the prepared remarks, we've seen a
• 29:03
  Speaker 10: material tightening, not just in nominal rates, but in real
• 29:06
  Speaker 10: rates too, and.
• 29:09
  Speaker 9: We're observing it.
• 29:10
  Speaker 10: We're trying to stay out of that because you know,
• 29:13
  Speaker 10: many of you might be interested in our reaction function.
• 29:16
  Speaker 10: We're interested in the reaction of financial markets.
• 29:19
  Speaker 5: I get that mixture, Chairman, and I guess the follow
• 29:23
  Speaker 5: up question is, if the markets are talking to you,
• 29:27
  Speaker 5: what do you hear them saying, And if it's real
• 29:30
  Speaker 5: rates or higher, it would suggest that that's where the
• 29:33
  Speaker 5: funds rate ought to go.
• 29:35
  Speaker 9: Yeah, So sorry, I'm sorry. It's your question.
• 29:40
  Speaker 10: So interpreting markets is an imperfect business. We central bankers,
• 29:47
  Speaker 10: like market pros, can think these things are overdetermined. But
• 29:50
  Speaker 10: let me offer some speculation first. As we said in
• 29:56
  Speaker 10: the FMC statement that you got at two o'clock, the
• 30:00
  Speaker 10: economy output is solid, cap X and productivity are strong,
• 30:08
  Speaker 10: Labor markets solid steady. The bond market, the treasury market
• 30:14
  Speaker 10: it seems to be saying that as well. I were
• 30:17
  Speaker 10: to try to break down just aggregate the treasury market signals,
• 30:20
  Speaker 10: I wouldn't be able to do it perfectly. But the
• 30:23
  Speaker 10: bond market's saying many of those same things, and that's
• 30:26
  Speaker 10: why we're seeing a tightening both noominals and in reels.
• 30:30
  Speaker 10: Even while at some level we haven't done much in
• 30:33
  Speaker 10: forty two days, the markets have done quite a bit.
• 30:40
  Speaker 12: Thank you, Clyde Jones Financial Times. You seem to have
• 30:44
  Speaker 12: got the family fight you're after. At this meeting. We
• 30:47
  Speaker 12: saw were we saw three descents. Could you characterize the
• 30:52
  Speaker 12: arguments that those dissenters put forward, please and tell us
• 30:55
  Speaker 12: a little bit why you weren't persuaded by them at
• 30:58
  Speaker 12: this stage.
• 30:59
  Speaker 10: Thank you, So.
• 31:00
  Speaker 9: I guess I shouldn't give you their best arguments. I'll
• 31:02
  Speaker 9: give you some others. So you were right.
• 31:05
  Speaker 10: I asked for a good family fight, and I got one.
• 31:08
  Speaker 10: That's the purpose, that's the design feature. I come into
• 31:12
  Speaker 10: this meeting, even this press conference, heartened by what I've
• 31:16
  Speaker 10: experienced the last two days. Most of our discussion were
• 31:19
  Speaker 10: on the big questions that matter to the conduct of
• 31:23
  Speaker 10: monetary policy. We didn't sort of hide from them. We
• 31:27
  Speaker 10: weren't scared of them. There was a lot more interaction
• 31:30
  Speaker 10: between among my colleagues. It was a real family fight.
• 31:35
  Speaker 9: My view, which you've long heard, is that's the better
• 31:39
  Speaker 9: way to get policy right. That's our north star.
• 31:42
  Speaker 10: So there was a lot of agreement that I heard
• 31:46
  Speaker 10: that we have the powers, the tools, also the authority
• 31:50
  Speaker 10: to deliver stable prices, no walking back from our responsibilities.
• 31:55
  Speaker 10: There was a large majority support for the decision that
• 31:58
  Speaker 10: we made in the room. But I also want to
• 32:00
  Speaker 10: leave you, Claire with one other impression. There was nothing
• 32:03
  Speaker 10: inertial about that discussion. It was an active, robust discussion
• 32:08
  Speaker 10: about what's in the full range of what we can
• 32:11
  Speaker 10: do and might want to do in the period ahead.
• 32:15
  Speaker 10: You characterized accurately there was a disagreement about a decision
• 32:19
  Speaker 10: today I would say that doesn't sort of capture the
• 32:22
  Speaker 10: full essence of the discussion. The path to Central Bank
• 32:27
  Speaker 10: Heaven requires delivering on our remit. These days, that means
• 32:31
  Speaker 10: delivering on price stability. I wouldn't measure that path in
• 32:35
  Speaker 10: forty two days or any one particular meeting, And I
• 32:38
  Speaker 10: came out of that meeting even more confident that this
• 32:41
  Speaker 10: is the right team to win the battle against high inflation.
• 32:45
  Speaker 12: How much do you think not going in July was
• 32:47
  Speaker 12: down to the cool CPI print for.
• 32:49
  Speaker 10: June, So, in two words, not much, not much. I'd
• 32:56
  Speaker 10: like to believe that the Committee shares my view use
• 33:00
  Speaker 10: which is the historic problem with data dependence is the
• 33:05
  Speaker 10: data and the dependence. We are not relying on any
• 33:09
  Speaker 10: one individual piece of data as cover or as an
• 33:13
  Speaker 10: excuse or as validation. What I care about, what I
• 33:18
  Speaker 10: think the Committee cares about, is trends on the data.
• 33:22
  Speaker 10: I'm sure we got some encouraging inflation data. I think
• 33:26
  Speaker 10: at the meeting forty two days ago, I said something
• 33:28
  Speaker 10: like sixty three months of inflation above target. I didn't
• 33:32
  Speaker 10: say sixty four, though the final calculation might be a
• 33:35
  Speaker 10: close one. So we'll be watching inflation data over the
• 33:39
  Speaker 10: period ahead. But I also don't want you to leave
• 33:42
  Speaker 10: the misimpression that we're sort of breathlessly waiting that I've
• 33:47
  Speaker 10: called for a task force to revisit both the private
• 33:51
  Speaker 10: and public data we use to make our decision making.
• 33:54
  Speaker 10: That task force is out doing their work. I'll be
• 33:57
  Speaker 10: checking back in with them the next couple of weeks.
• 34:00
  Speaker 10: But I wouldn't say we overly relied on any one
• 34:02
  Speaker 10: piece of data, including that data which surprised a couple
• 34:05
  Speaker 10: of weeks ago.
• 34:08
  Speaker 13: Neal Hi Charmin worsh Thanks Neil Erlin with Facxios, Thank
• 34:13
  Speaker 13: you for taking our questions. So the Fed funds rate
• 34:16
  Speaker 13: is now about seventy five basis points below the two
• 34:18
  Speaker 13: year yield. It suggests markets think you'll have to tighten
• 34:20
  Speaker 13: eventually about a hundred basis points below most tailor rule estimates.
• 34:24
  Speaker 13: You're hitting your employment mandate. Inflation stays high. Why should
• 34:27
  Speaker 13: rates not be higher today?
• 34:29
  Speaker 9: There's a lot in there, Neil.
• 34:32
  Speaker 10: So rates are hired today than they were forty.
• 34:35
  Speaker 9: Two days ago.
• 34:38
  Speaker 10: Markets have made decisions because we step back, in part
• 34:42
  Speaker 10: from trying to influence those market judgments have moved up
• 34:47
  Speaker 10: on what nominal rates are across the Treasury curve. That
• 34:53
  Speaker 10: doesn't mean we take them as by dictation, but we're
• 34:57
  Speaker 10: observing them. So I think it's a miss characterization to
• 35:01
  Speaker 10: say that markets haven't reacted because we didn't move today.
• 35:04
  Speaker 10: Markets are reacting in real time. In the period ahead.
• 35:08
  Speaker 10: We've got important decisions to make about the policy rate
• 35:12
  Speaker 10: markets in the intervening period. I think have quite a
• 35:15
  Speaker 10: bit of decisions to make. I'll see if I can
• 35:18
  Speaker 10: put it this way, Monetary policy matters not just by
• 35:23
  Speaker 10: what we say or even what we do. Monetary policy
• 35:28
  Speaker 10: matters by how it affects the real economy, and these
• 35:32
  Speaker 10: prices that we see in financial markets is one of
• 35:34
  Speaker 10: the many ways in which it affects the real economy.
• 35:38
  Speaker 10: We'll be continuing to watch that market information, see how
• 35:42
  Speaker 10: it responds to incoming events, and that can help inform
• 35:45
  Speaker 10: our decision making when we meet in seven or eight weeks.
• 35:48
  Speaker 13: How would you characterize of the in the family fight
• 35:50
  Speaker 13: the last couple of days of you and the other
• 35:52
  Speaker 13: eight members who wanted to hold. Was that a strong
• 35:54
  Speaker 13: conviction or was that a hair trigger close call I'm
• 35:57
  Speaker 13: holding versus tighting?
• 36:00
  Speaker 10: Well, I think you know the vote. The vote was
• 36:02
  Speaker 10: nine to three. The broader discussion. To my ear, over
• 36:08
  Speaker 10: the course the last days showed a lot of agreement
• 36:11
  Speaker 10: on the hard questions, the four questions I raised at
• 36:15
  Speaker 10: the outset about what's really happening in the economy with
• 36:19
  Speaker 10: the shocks and absent the shocks, What are our tools
• 36:23
  Speaker 10: and our capabilities? What's the effect on prices on output?
• 36:30
  Speaker 10: I heard a lot of commonality on the questions. Were
• 36:33
  Speaker 10: there different leans on the answers?
• 36:35
  Speaker 9: You bet there was so.
• 36:37
  Speaker 10: Could people come to different conclusions, absolutely, But my own
• 36:41
  Speaker 10: judgment is this is a period of watchful thinking, not
• 36:46
  Speaker 10: watchful waiting. And I think the score on that vote
• 36:50
  Speaker 10: was unanimous.
• 36:53
  Speaker 14: Colby.
• 36:57
  Speaker 11: Thank you, Colby Smith of the New York Times. You've
• 37:00
  Speaker 11: mentioned that looking at the Fed's policy tools is one
• 37:02
  Speaker 11: element of a three prong strategy to address the inflation problem.
• 37:06
  Speaker 11: So I'm curious how you view the effectiveness of those tools.
• 37:10
  Speaker 11: If inflation is too high and not coming down, is
• 37:14
  Speaker 11: the best remedy to raise interest rates?
• 37:16
  Speaker 10: So that was the discussion in the last two days,
• 37:21
  Speaker 10: is that the dominant remedy if inflation continues to be
• 37:26
  Speaker 10: elevated through the forecast period, interest rates could well be
• 37:30
  Speaker 10: part of that solution.
• 37:32
  Speaker 9: But I wouldn't say it's in isolation.
• 37:34
  Speaker 10: I tried to describe in my remarks today point that
• 37:38
  Speaker 10: I made into the oversight committees a couple of weeks ago.
• 37:41
  Speaker 10: I think there was a misimpression by some in financial markets,
• 37:45
  Speaker 10: by some households and businesses, that central bankers, like me,
• 37:49
  Speaker 10: we said a two percent inflation target, but maybe we
• 37:52
  Speaker 10: were more tolerable of a somewhat higher inflation target, and
• 37:56
  Speaker 10: economics we'd call that the revealed preference have been rational
• 38:01
  Speaker 10: for people to think, well, they're inflation targets somewhat higher.
• 38:06
  Speaker 10: What I heard in the last two days, what I've
• 38:07
  Speaker 10: heard eight and a half weeks is no, we will
• 38:10
  Speaker 10: deliver the two percent inflation target. That is the committee's
• 38:14
  Speaker 10: definition of price stability. So one way, absent the tools
• 38:19
  Speaker 10: that you reference to ensure that we get there, is
• 38:23
  Speaker 10: ensure that expectations are centered around the right number. And
• 38:27
  Speaker 10: I think we've made some progress on that. I am
• 38:29
  Speaker 10: not suggesting we're done on that. It's worth reiterating. And ultimately,
• 38:35
  Speaker 10: the business we're in Colby's performance we are going to
• 38:38
  Speaker 10: be judged by how we perform, and that's what we
• 38:42
  Speaker 10: intend to do with the inflation target. Making clear expectations
• 38:45
  Speaker 10: is one part of it. Making sure we demonstrate we're
• 38:49
  Speaker 10: responsible for it, we're not blaming as another, and our
• 38:52
  Speaker 10: policy tools like you referenced is the third and equally
• 38:56
  Speaker 10: consequential part.
• 38:57
  Speaker 11: How are you factoring the fact that a large portion
• 39:00
  Speaker 11: of the inflation overshoot is being caused by supply shocks?
• 39:03
  Speaker 11: As it's mentioned again in the statement, does that blunt
• 39:07
  Speaker 11: the effectiveness of rate hikes in you review.
• 39:10
  Speaker 10: First on the premise here question. It was almost as
• 39:13
  Speaker 10: if you were listening to our discussion in the last
• 39:15
  Speaker 10: day and a half. A lot of our focus was
• 39:18
  Speaker 10: on trying to understand and identify underlying inflation dynamics amid shocks.
• 39:26
  Speaker 10: We take these shocks seriously. There have been a series
• 39:29
  Speaker 10: of them that have been hitting this economy. We're not
• 39:33
  Speaker 10: looking through them and saying, oh, they don't matter. What
• 39:35
  Speaker 10: we're trying to understand is to what extent are these
• 39:39
  Speaker 10: shocks broadening in their effects, broadening in their impact on
• 39:43
  Speaker 10: prices that are quite far removed from it. Our goal
• 39:46
  Speaker 10: is to have growth that is broadening and inflation that
• 39:50
  Speaker 10: is becoming more limited, more circumscribed. I'll be the first
• 39:54
  Speaker 10: to admit the shocks make this job and this policy
• 39:57
  Speaker 10: conjuncture a little tougher. But that's among the chief questions
• 40:01
  Speaker 10: we've asked ourselves, and around the room people have different
• 40:05
  Speaker 10: views on it. I tend to think in the coming
• 40:07
  Speaker 10: months we're going to refine that view and have a
• 40:10
  Speaker 10: better judgment, and we're going to have market prices trying
• 40:13
  Speaker 10: to help inform it too.
• 40:16
  Speaker 15: Edward, thank you, mister chairman. Edward Lawrence from Fox Business.
• 40:23
  Speaker 15: I guess I want to drill down maybe a little bit,
• 40:25
  Speaker 15: what specifically in your mind would be the argument then
• 40:28
  Speaker 15: for a pause today.
• 40:31
  Speaker 10: So I wouldn't characterize what we did as anything like
• 40:34
  Speaker 10: a pause. I would characterize what we did as a rigorous.
• 40:38
  Speaker 9: Review of the economic situation.
• 40:42
  Speaker 10: I would characterize what we did as a review of
• 40:46
  Speaker 10: the big heart questions, and I'd characterize it as a
• 40:50
  Speaker 10: view of what our own homework is to try to
• 40:53
  Speaker 10: resolve those questions in the period ahead. If you were
• 40:59
  Speaker 10: to try to force a description that this was a pause,
• 41:03
  Speaker 10: I would say financial market prices would take the other
• 41:06
  Speaker 10: side of that. Financial market prices in this inter meeting period,
• 41:10
  Speaker 10: they didn't pause. They reacted to the inflation data in
• 41:13
  Speaker 10: one direction. Strong economic growth in the other direction and
• 41:19
  Speaker 10: nominal and real rates went up. Did the FED take
• 41:22
  Speaker 10: an explicit change in its policy rate today? No, but
• 41:27
  Speaker 10: I think that's the beginning of the story, not the
• 41:29
  Speaker 10: end of the story.
• 41:30
  Speaker 15: And if I could, I did want to ask, not
• 41:32
  Speaker 15: for guidance, but looking forward.
• 41:33
  Speaker 9: Traditionally, if at a reserve.
• 41:35
  Speaker 15: Chairman uses the Jackson Hole Summit as a sort of
• 41:38
  Speaker 15: a reset of Monterey policy, how do you look at
• 41:40
  Speaker 15: the speech that you're going to make in August.
• 41:43
  Speaker 10: I look at it like a blank piece of paper
• 41:45
  Speaker 10: right now, I have not begun consideration with the incredible
• 41:51
  Speaker 10: team here. What would go into that document? I think
• 41:55
  Speaker 10: you characterized it correctly. Historically, at least from my first
• 41:59
  Speaker 10: tour of news at the FED the more recent periods,
• 42:01
  Speaker 10: it would be sort of a setting up speech, more
• 42:04
  Speaker 10: often than not, of what was going to be happening
• 42:06
  Speaker 10: in the fall.
• 42:07
  Speaker 9: I haven't made any.
• 42:08
  Speaker 10: Judgments on that, but those are judgments will have to
• 42:12
  Speaker 10: come to. If I could. In the high mountain air
• 42:16
  Speaker 10: in Jackson, Wyoming, I'd like to also frame the big questions.
• 42:21
  Speaker 10: There is a tendency, especially with the proliferation of meetings
• 42:25
  Speaker 10: and press conferences, to get caught up in the myopic
• 42:29
  Speaker 10: did you do this by a quarter?
• 42:31
  Speaker 7: Do that?
• 42:33
  Speaker 10: Ultimately, whether we deliver on price stability matter some the
• 42:36
  Speaker 10: decisions we make in six or seven or eight week periods,
• 42:40
  Speaker 10: but they matter more. What are the big questions, what's
• 42:42
  Speaker 10: really happening with productivity, what's really happening with demographics, what's
• 42:47
  Speaker 10: really happening to the global economy amid the shocks.
• 42:52
  Speaker 9: Haven't made a decision.
• 42:53
  Speaker 10: Whether it's going to be a big picture speech or
• 42:55
  Speaker 10: whether it's going to be a more traditional setup for
• 42:58
  Speaker 10: all the action we're going to have between September and December.
• 43:02
  Speaker 10: I will tell you one other thing that I am
• 43:03
  Speaker 10: doing between now and Jackson Hole. So I'm checking with
• 43:06
  Speaker 10: those task forces. My first principle of establishing a task
• 43:11
  Speaker 10: force is find the best subject matter experts anywhere in
• 43:14
  Speaker 10: the world and put them together, especially put them together
• 43:18
  Speaker 10: with other people who might disagree with them. In the
• 43:21
  Speaker 10: next couple weeks, I'm going to be doing a check
• 43:23
  Speaker 10: back in. I've given them time to sort of think
• 43:26
  Speaker 10: hard about their agenda, their debate, their schedule, and when
• 43:30
  Speaker 10: they might be ready for prime time. I'll be doing
• 43:32
  Speaker 10: a little bit of that checking, and that may or
• 43:35
  Speaker 10: may not inform anything I have to say in Jackson.
• 43:39
  Speaker 16: Nay Nick timmeros to The Wall Street Journal Chairman Warsha,
• 43:46
  Speaker 16: I want to follow up on Colby's question about policy transmission.
• 43:51
  Speaker 17: You've said there's no cruel choice between stable prices and
• 43:54
  Speaker 17: full employment rates. Bring inflation down by cooling demand fits
• 43:59
  Speaker 17: general thought that can show up in the labor market.
• 44:02
  Speaker 17: If that's not the channel you're relying on, what is
• 44:06
  Speaker 17: you know?
• 44:06
  Speaker 10: So let me go back to first principles, Nick, I
• 44:11
  Speaker 10: don't believe that either part of our mandate is generally
• 44:17
  Speaker 10: at war with the other part. I do not believe
• 44:20
  Speaker 10: that price stability and full employment is an either or proposition.
• 44:25
  Speaker 10: There have been policymakers over the last several generations who
• 44:29
  Speaker 10: have thought that there is a strict trade off there.
• 44:32
  Speaker 10: That isn't my judgment. In fact, my judgment is if
• 44:37
  Speaker 10: and when we deliver on our remit, we're going to
• 44:41
  Speaker 10: be satisfying both prongs. We're going to have price stability
• 44:45
  Speaker 10: and full employment. And in fact, if you want to
• 44:48
  Speaker 10: do the most harm to the labor markets, you would
• 44:51
  Speaker 10: run a period of high inflation that's variable such that
• 44:55
  Speaker 10: employers businesses wouldn't really know what's going on. So I
• 44:59
  Speaker 10: think the two parts of our mandate are equally important.
• 45:02
  Speaker 10: We have no legislative orphans here. I've been talking mostly
• 45:06
  Speaker 10: about price stability because we're doing pretty well.
• 45:09
  Speaker 2: All right.
• 45:10
  Speaker 1: So a couple of things here. One is that he
• 45:13
  Speaker 1: is coming in slightly dubbish. We're going to go back
• 45:15
  Speaker 1: and cut back to him. Some of these questions are
• 45:18
  Speaker 1: kind of reiterated, but I think some of the keys
• 45:21
  Speaker 1: that everybody's asking is the lack of forward guidance, which
• 45:25
  Speaker 1: he is trying to sidestep a little bit, and I
• 45:27
  Speaker 1: think that is a factor that we'll play into whether
• 45:30
  Speaker 1: or not we get a hike. Also, we were two
• 45:33
  Speaker 1: votes away from a rate hike. That is skinny, guys,
• 45:37
  Speaker 1: So we dodged a bullet on this one. The real
• 45:40
  Speaker 1: question is going to be the next FOMC, and I
• 45:42
  Speaker 1: don't know, we could actually see something start to move
• 45:46
  Speaker 1: the market in a big way, not necessarily based on
• 45:49
  Speaker 1: where we are right now, but Bitcoin is course on
• 45:51
  Speaker 1: the move right now. As the chart is moving up,
• 45:53
  Speaker 1: I mean it's just up one percent. We're on the
• 45:54
  Speaker 1: fifteen second. Just to give you guys kind of a
• 45:57
  Speaker 1: beef on this or a beat on this, but if
• 45:59
  Speaker 1: you look ok at Ethereum also climbing almost in unison,
• 46:03
  Speaker 1: Solana also almost in Unison.
• 46:06
  Speaker 2: The whole crypto market feels.
• 46:08
  Speaker 1: That this is a little bit more dubvish for now.
• 46:11
  Speaker 1: At least now could he say something yet to be revealed.
• 46:16
  Speaker 1: If there's a smart guy in there, they're going to
• 46:18
  Speaker 1: ask any correlation to Clarity because I think this has
• 46:22
  Speaker 1: a big impact on what's going to be going with crypto,
• 46:25
  Speaker 1: and we are going to be doing a.
• 46:26
  Speaker 2: Full Clarity video tomorrow.
• 46:28
  Speaker 1: There are big bombshells happening right now in Clarity.
• 46:33
  Speaker 2: We're working through the.
• 46:34
  Speaker 1: Details with all of our sources, So make sure and
• 46:37
  Speaker 1: stay tuned.
• 46:37
  Speaker 2: If you guys haven't.
• 46:38
  Speaker 1: Subscribed and hit that bell, well at least you'll get
• 46:40
  Speaker 1: a notification on that.
• 46:41
  Speaker 2: Let's go back to Kevin worsh.
• 46:43
  Speaker 10: I'll let the dissenters speak for themselves. The way I
• 46:48
  Speaker 10: heard it over the last two days was overwhelming agreement
• 46:52
  Speaker 10: on objectives and authority and commitment. I didn't hear anybody
• 46:57
  Speaker 10: walking away from it. The judgments as to how best
• 47:01
  Speaker 10: to achieve the price stability. That was probably the question
• 47:05
  Speaker 10: that we were trying to answer. What's the best move,
• 47:09
  Speaker 10: what's the best strategy, what's the best way to achieve it?
• 47:14
  Speaker 10: And a second question that was asked is when do
• 47:17
  Speaker 10: we need to make those harder calls? When do we
• 47:20
  Speaker 10: need to make those decisions? And like I said to
• 47:23
  Speaker 10: one of your colleagues, I was comforted that markets in
• 47:28
  Speaker 10: the inter meeting period.
• 47:30
  Speaker 9: Weren't reacting to us. They weren't reacting to dots or
• 47:33
  Speaker 9: to speeches.
• 47:33
  Speaker 10: They appeared more than ever to be reacting to real
• 47:37
  Speaker 10: time events. So they're gauging themselves how restrictive the treasury
• 47:44
  Speaker 10: curve should be, and that I think has been a
• 47:47
  Speaker 10: useful development. We don't endorse any particular market move, but
• 47:52
  Speaker 10: it also suggests we observe them with keen interest.
• 47:56
  Speaker 18: John L.
• 48:01
  Speaker 19: Janell Marte with Bloomberg following up on that there was
• 48:05
  Speaker 19: more uncertainty in the markets about what if I would
• 48:08
  Speaker 19: do at this meeting. To some extent, you might think
• 48:10
  Speaker 19: that's what you want to see, But my question is
• 48:13
  Speaker 19: about is there a point at which you would not
• 48:15
  Speaker 19: want to surprise the markets if they were pricing in
• 48:17
  Speaker 19: something with higher certainty that was opposite of what you
• 48:20
  Speaker 19: were intending to do. What are the risks that you
• 48:23
  Speaker 19: see associated with that.
• 48:25
  Speaker 10: Yes, so it's a good question. Surprise is not the
• 48:28
  Speaker 10: objective function. Surprise is not what we're solving for. We
• 48:34
  Speaker 10: have a clear north star. What we're solving for is
• 48:36
  Speaker 10: how to make the best decisions. Almost everything else should
• 48:40
  Speaker 10: be in service to that goal. By not spoon feeding markets,
• 48:46
  Speaker 10: by not previewing our decisions, by not sort.
• 48:49
  Speaker 9: Of giving nudges and leans.
• 48:52
  Speaker 10: My colleagues and I have found in the inter meeting
• 48:54
  Speaker 10: period what we're getting is the views from a very
• 48:58
  Speaker 10: accomplished economist, that's the keernals of financial markets. Instead of
• 49:03
  Speaker 10: just repeating or echoing what we were saying back to us,
• 49:07
  Speaker 10: they're giving us somewhat not perfect their own judgment. So
• 49:14
  Speaker 10: surprises are not the objective. But at the same time,
• 49:18
  Speaker 10: I would say, we didn't come into this meeting feeling
• 49:21
  Speaker 10: constrained by the full range of alternatives we had in
• 49:24
  Speaker 10: front of us.
• 49:25
  Speaker 19: So some of your peers have continued to discuss how
• 49:28
  Speaker 19: they think about policy decisions. And if you don't offer
• 49:32
  Speaker 19: your reaction function or your way of thinking about it,
• 49:36
  Speaker 19: how concerned are you that you're seeding control of the narrative.
• 49:40
  Speaker 9: So not very concerned, that's a short answer. To the
• 49:43
  Speaker 9: question when some people that follow the FED say, well.
• 49:49
  Speaker 10: We don't want your forecast, we don't want your DOT,
• 49:52
  Speaker 10: we just want your reaction function. Part of me here
• 49:55
  Speaker 10: is the What we really want is your forecast. What
• 49:58
  Speaker 10: we really want is your dot in terms of reaction function.
• 50:01
  Speaker 10: Let me sort of disabuse people of a question that
• 50:05
  Speaker 10: may or may not be real and be out there.
• 50:08
  Speaker 10: Any central banker, especially a central banker where the labor
• 50:15
  Speaker 10: markets are more or less at equilibrium, any central banker
• 50:20
  Speaker 10: he or she sees underlying inflation moving higher, he or
• 50:26
  Speaker 10: she is more inclined to titan policy. Again, when you've
• 50:30
  Speaker 10: achieved the other side of your mandate and you see
• 50:33
  Speaker 10: underlying inflation falling, he's more inclined to loosen policy. That's
• 50:39
  Speaker 10: my reaction function, and I don't suspect it will cause
• 50:44
  Speaker 10: people to not continue to pry for more, because the
• 50:48
  Speaker 10: truth is, for a very long time in a lot
• 50:50
  Speaker 10: of countries coming out of the two thousand and eight crisis,
• 50:53
  Speaker 10: where in crisis mode, we were purposely providing a lot
• 50:57
  Speaker 10: of information, trying to provide a lot of a insurance,
• 51:00
  Speaker 10: trying to tell people exactly what we're going to do,
• 51:03
  Speaker 10: offering forward guidance with clarity, as if we're tying our
• 51:07
  Speaker 10: own hands behind our back. Well, in crisis mode, that
• 51:10
  Speaker 10: strikes me as a very prudent policy, but in more
• 51:13
  Speaker 10: benign conditions it strikes me as worth revisiting. But markets
• 51:18
  Speaker 10: and market participants and reporters have learned to devour.
• 51:22
  Speaker 9: All that information.
• 51:23
  Speaker 10: So I take seriously that the pullback of forward guidance
• 51:28
  Speaker 10: requires some transition. Reform isn't easy, but our general judgment
• 51:33
  Speaker 10: is going to help us make better decisions and in
• 51:35
  Speaker 10: so doing satisfy our remit.
• 51:40
  Speaker 7: Paul, thanks of my coming.
• 51:45
  Speaker 9: Sorry, thank you.
• 51:48
  Speaker 13: When you talk about the two percent inflation target, what
• 51:52
  Speaker 13: measure are you relying on?
• 51:55
  Speaker 9: Yeah, so I'll.
• 51:56
  Speaker 10: Give two answers. First, let me give the proper standard answer.
• 52:01
  Speaker 10: The Federal Reserve every January outlines a statement of purposes
• 52:07
  Speaker 10: and strategy. And in that strategy document, which I believe
• 52:11
  Speaker 10: was dated January of this year, it describes a measure
• 52:15
  Speaker 10: of PC inflation as the objective function.
• 52:19
  Speaker 9: There.
• 52:21
  Speaker 10: I have enough of my own, so that's our number.
• 52:23
  Speaker 10: We're sticking with it. Who knows, come after next January
• 52:27
  Speaker 10: what we might say about strategy. I suspect the task
• 52:29
  Speaker 10: forces might have something to add. But I'll say this,
• 52:33
  Speaker 10: some version of the Lucas critique, some version of good
• 52:37
  Speaker 10: hearts law and economics should remind us that when we
• 52:42
  Speaker 10: talk about measures of inflation or something else, and we
• 52:48
  Speaker 10: describe those measures as being consistent with our objectives, we
• 52:52
  Speaker 10: might make them such that they're not very good measures
• 52:56
  Speaker 10: or very good objectives. Broadly, if you said to me
• 53:00
  Speaker 10: standing in front of you, I abide fully by the
• 53:02
  Speaker 10: strategy document, We're going to deliver two percent inflation and
• 53:06
  Speaker 10: not a whisper more. But to achieve that, I'm looking
• 53:11
  Speaker 10: at a broader set of inflation data than PCE So
• 53:14
  Speaker 10: without sort of fully revealing my cards, I'm trying to understand,
• 53:20
  Speaker 10: like my colleagues, what's the underlying generalized change in prices
• 53:25
  Speaker 10: that are happening in the economy.
• 53:27
  Speaker 9: It is not a perfect science, I might have.
• 53:30
  Speaker 10: Said forty two days ago, I've got a task course
• 53:33
  Speaker 10: for that. But we have a data project that's trying
• 53:36
  Speaker 10: to look and see whether we can't separate the noise
• 53:38
  Speaker 10: from the signal. And so if you would hear a
• 53:41
  Speaker 10: message from me, yes, I care about what the PCEE
• 53:44
  Speaker 10: prints are. I care about what the contributions are from
• 53:47
  Speaker 10: CPI and everything else. But my lens is broader than that,
• 53:53
  Speaker 10: even though the remit is quite narrow. Might be key.
• 54:02
  Speaker 14: Michael McKee from Bloomberg Radio and Television. I'm struggling a
• 54:07
  Speaker 14: little bit with some of what you've said today, and
• 54:10
  Speaker 14: maybe you can help clarify this. You've said over and
• 54:14
  Speaker 14: over again that your job is to bring down prices,
• 54:18
  Speaker 14: to get prices stable, to hit your target, and that
• 54:21
  Speaker 14: you will hit your target. The market says you're not
• 54:25
  Speaker 14: there yet because they've raised rates. But all you've talked
• 54:31
  Speaker 14: about today is talking about it, and it's not like
• 54:34
  Speaker 14: members of the committee weren't there before you talking about it.
• 54:38
  Speaker 14: So I guess what the American people might be asking
• 54:40
  Speaker 14: is what are you waiting for?
• 54:42
  Speaker 10: Yeah, so, believe it or not, this press conference is
• 54:46
  Speaker 10: not all I've done today.
• 54:48
  Speaker 9: We have spent an inordinate amount of time in the.
• 54:51
  Speaker 10: Last two days, two weeks looking at our monetary policy strategy,
• 54:57
  Speaker 10: evaluating our tools, thinking hard about the sources of data
• 55:03
  Speaker 10: that we have at our disposal and.
• 55:05
  Speaker 9: We wish we had.
• 55:07
  Speaker 10: We've also thought hard about the period ahead. What among
• 55:10
  Speaker 10: these questions will be answered with more clarity, certainly not certainty,
• 55:16
  Speaker 10: So the decision we'd made today. The discussion we had
• 55:20
  Speaker 10: in that room was the farthest thing from inertia I
• 55:24
  Speaker 10: can imagine as a point estimate at this very moment,
• 55:28
  Speaker 10: and a choice between two alternatives.
• 55:31
  Speaker 9: You heard the results.
• 55:32
  Speaker 10: Of it, but I would tell you that this discussion
• 55:35
  Speaker 10: was far more robust, and our thinking about how best
• 55:40
  Speaker 10: to achieve that target is advanced, and over the coming
• 55:43
  Speaker 10: months I expected to be advanced much more significantly. If
• 55:47
  Speaker 10: you were to sort of if I were to steal
• 55:49
  Speaker 10: a follow up question, I won't let you.
• 55:51
  Speaker 9: You won't be giving it up.
• 55:52
  Speaker 10: If I were to steal a follow up question, well,
• 55:55
  Speaker 10: what's the world think about what you've done? I would
• 55:59
  Speaker 10: again reiterate, what we do isn't just about what we say.
• 56:03
  Speaker 10: It's not just about what we do. We're in the
• 56:05
  Speaker 10: performance business.
• 56:08
  Speaker 13: And so.
• 56:10
  Speaker 10: If I look at the Treasury curve, if I look
• 56:13
  Speaker 10: at the dollar, if I look at a lot of
• 56:15
  Speaker 10: things that are internals inside of financial markets, I think
• 56:19
  Speaker 10: what they're broadly.
• 56:20
  Speaker 9: Saying is that this committee.
• 56:23
  Speaker 10: Does own it, has the credibility to deliver it, and
• 56:27
  Speaker 10: they believe, like I do, that we will. But I
• 56:32
  Speaker 10: don't want to leave you with a misimpression. We've got
• 56:34
  Speaker 10: no magic wand this isn't something that we're going to
• 56:38
  Speaker 10: be able to carry out in days or weeks. But
• 56:40
  Speaker 10: we're going to deliver on the responsibility that Congress gave us,
• 56:44
  Speaker 10: and today's meeting and the preparation for today's meeting was
• 56:48
  Speaker 10: an important step towards that destination.
• 56:51
  Speaker 14: I'd like to follow up on the task forces as
• 56:54
  Speaker 14: well and ask what vetting did you do of the
• 56:57
  Speaker 14: people that you appointed to the task forces? In particular,
• 57:00
  Speaker 14: given Mark Andriesen's substantial political spending twenty five million dollars
• 57:04
  Speaker 14: in just the past year to back candidates who oppose
• 57:07
  Speaker 14: stricter AI regulation, how can the public be confident that
• 57:12
  Speaker 14: a committee he co chairs will provide an independent assessment
• 57:15
  Speaker 14: of AI's economic effects rather than one aligned with the
• 57:19
  Speaker 14: interests of the AI industry.
• 57:20
  Speaker 10: Yeah, so, I selected fifteen incredible subject market subject matter
• 57:28
  Speaker 10: experts to tackle five of the most important questions that
• 57:33
  Speaker 10: if we get the answers right, we're going to do
• 57:36
  Speaker 10: a far better job in delivering. And if we get
• 57:38
  Speaker 10: the answers wrong.
• 57:39
  Speaker 9: We have a problem.
• 57:40
  Speaker 10: The comfort that I can give you and your listeners
• 57:43
  Speaker 10: is we're the decision makers, the Chairman of the Board
• 57:48
  Speaker 10: of the Federal Reserve and the members of the Board
• 57:51
  Speaker 10: and the FMC. We will be the consumers of the
• 57:55
  Speaker 10: outputs from five different committees. The judgments were making will
• 58:00
  Speaker 10: be informed by, but not at all determined by these
• 58:04
  Speaker 10: outside groups. My theory of the case in establishing the
• 58:08
  Speaker 10: task forces were to pick people with extraordinary talent, depth
• 58:14
  Speaker 10: of expertise in a divergence of views inside every committee,
• 58:20
  Speaker 10: so they too can have a family fight. This is
• 58:24
  Speaker 10: not outsourcing to people that aren't known and haven't been vetted.
• 58:29
  Speaker 10: This is seeing whether new ideas can catalyze a broader, better,
• 58:33
  Speaker 10: more informed discussion inside the room. And I'm very confident
• 58:37
  Speaker 10: that we're going to able to do that. I am
• 58:39
  Speaker 10: impressed by the credentials of these fifteen people, and full disclosure,
• 58:44
  Speaker 10: I've known almost all of them for a very long time,
• 58:47
  Speaker 10: and I think they're going to give their best views
• 58:49
  Speaker 10: on the subject. But ultimately, these are decisions we're going
• 58:53
  Speaker 10: to make, and we're accountable to our oversight committees and
• 58:56
  Speaker 10: to the remit Congress gave us to deliver.
• 59:05
  Speaker 20: Hi and Sofia with Reuter's nice to see you again.
• 59:09
  Speaker 20: So I need a little help here too. You've said
• 59:12
  Speaker 20: repeatedly you have no tolerance for inflation, and yet we
• 59:17
  Speaker 20: are seeing above target inflation repeatedly for five years and
• 59:23
  Speaker 20: through your term so far. And sure you have no
• 59:26
  Speaker 20: magic wand but you have not taken action. You just
• 59:30
  Speaker 20: gave us a little peak at your reaction function as well.
• 59:33
  Speaker 20: You said that if underlying inflation is rising, that you
• 59:38
  Speaker 20: would tend to think that you might need to tighten.
• 59:42
  Speaker 20: And with the exception of the most recent inflation print,
• 59:46
  Speaker 20: that is what we've been seeing. So could you explain
• 59:50
  Speaker 20: what you mean by no tolerance for inflation and what
• 59:54
  Speaker 20: you plan to do about it?
• 59:56
  Speaker 10: Sure so, and I hear from you what I hear
• 1:00:00
  Speaker 10: were broadly from households and businesses impatience.
• 1:00:04
  Speaker 9: Deliver it already. This is not a this is not
• 1:00:09
  Speaker 9: an excuse. This is effect.
• 1:00:11
  Speaker 10: This FOMC, this board has been in business for eight
• 1:00:13
  Speaker 10: and a half weeks. The patients, the impatients that households
• 1:00:21
  Speaker 10: and businesses feel, have been going on for sixty three months.
• 1:00:26
  Speaker 9: We are on the job. We will deliver.
• 1:00:30
  Speaker 10: We are focused like a laser on making sure we
• 1:00:32
  Speaker 10: can do it. But the suggestion that we're going to
• 1:00:36
  Speaker 10: be able to do it with our magic wand is
• 1:00:38
  Speaker 10: one I want to disabuse you and everyone else of.
• 1:00:41
  Speaker 10: But the discussion the last two days give me more
• 1:00:44
  Speaker 10: confidence even than I had eight and a half weeks ago.
• 1:00:47
  Speaker 10: This team that we have at the FMC, the support
• 1:00:51
  Speaker 10: that we have from board staff, and the new hard
• 1:00:53
  Speaker 10: questions we're asking, we need to resolve those, and as
• 1:00:57
  Speaker 10: we resolve those questions, get smarter on those going to
• 1:01:00
  Speaker 10: deliver on the remit.
• 1:01:02
  Speaker 9: You don't have to take my word for it.
• 1:01:04
  Speaker 10: If you look broadly at market prices, they are certainly
• 1:01:10
  Speaker 10: not saying all clear, but they are working in concert
• 1:01:14
  Speaker 10: to to keep us on our toes. And they have
• 1:01:17
  Speaker 10: titan financial conditions in this intra meeting period and that
• 1:01:23
  Speaker 10: has given us. That has provided us some comfort that
• 1:01:29
  Speaker 10: that we've got the ability and capability to deliver.
• 1:01:33
  Speaker 20: And is your read or your I guess faith in
• 1:01:40
  Speaker 20: market's ability to sort of make a judgment and then
• 1:01:44
  Speaker 20: you take signal from that judgment. Is that how does
• 1:01:48
  Speaker 20: that affect you when you come up on the September
• 1:01:54
  Speaker 20: meeting and markets are seeing a near one chance of
• 1:01:59
  Speaker 20: a great hike as they see now, how does that
• 1:02:04
  Speaker 20: feed into your decision making and your thinking?
• 1:02:07
  Speaker 10: So We're not going to be constrained by market prices.
• 1:02:12
  Speaker 10: We're not going to be constrained or take verbatim from
• 1:02:15
  Speaker 10: what the market's doing. But I think it's useful and
• 1:02:18
  Speaker 10: to understand that markets can be a very good source
• 1:02:22
  Speaker 10: of information, not a determinative source, not a perfect source.
• 1:02:27
  Speaker 10: But if we're trying to land the plane and deliver
• 1:02:31
  Speaker 10: two percent inflation, and we take a very useful source
• 1:02:36
  Speaker 10: of information and we get it all fogged up by
• 1:02:40
  Speaker 10: giving it our own forecasts, by providing rolling commentary, I
• 1:02:44
  Speaker 10: can assure you that we're going to have less information,
• 1:02:46
  Speaker 10: less ability to land the plane successfully and deliver price stability.
• 1:02:51
  Speaker 10: We're just trying to make sure that that source of
• 1:02:52
  Speaker 10: information is as direct and unfiltered as possible. It isn't
• 1:02:56
  Speaker 10: to the exclusion of data sources and opinions and others,
• 1:03:01
  Speaker 10: but if you're hearing from me, we wanted to make
• 1:03:03
  Speaker 10: sure we were getting a better source of information. I
• 1:03:06
  Speaker 10: think in a relatively short time we are good to
• 1:03:10
  Speaker 10: Brian Shung for the last question.
• 1:03:13
  Speaker 18: I tumber Brian Schung with NBC News. So you said
• 1:03:18
  Speaker 18: you'd be open to having press conferences when there's news
• 1:03:20
  Speaker 18: to make So today, no change to rates, no forward
• 1:03:23
  Speaker 18: guidance for the average household. I guess what was the
• 1:03:27
  Speaker 18: news today?
• 1:03:30
  Speaker 10: So apparently it was news that I had a press conference.
• 1:03:34
  Speaker 10: Let me just see if I can offer some clarity
• 1:03:36
  Speaker 10: on that between now and year end. My predecessors and
• 1:03:42
  Speaker 10: the Federal Reserve committed to press conferences this year. I'm
• 1:03:45
  Speaker 10: committing to press conferences this year. That might be news
• 1:03:48
  Speaker 10: to the people in this room and of no particular
• 1:03:50
  Speaker 10: interest to your viewers and your and your readers back
• 1:03:53
  Speaker 10: at home. What I can offer as as assurance is
• 1:03:59
  Speaker 10: that the Fed's on the case, that this FED chairman
• 1:04:04
  Speaker 10: feels better about this board and this committee's ability deliver
• 1:04:09
  Speaker 10: than I did when I showed up here on the
• 1:04:10
  Speaker 10: first day, and I showed up pretty confident.
• 1:04:13
  Speaker 9: I've been heartened by the reception that I received. No doubt.
• 1:04:17
  Speaker 10: In some of your commentaries today, you'll talk about a
• 1:04:20
  Speaker 10: divided Federal Reserve. Well, that's not the feeling I felt
• 1:04:24
  Speaker 10: the last couple of days and a couple of days
• 1:04:26
  Speaker 10: before it. What I felt was a group of professionals,
• 1:04:30
  Speaker 10: all the different perspectives, different views, different judgments, but eager
• 1:04:34
  Speaker 10: to roll up their sleeves and have a family fight
• 1:04:37
  Speaker 10: and eager to reform the way in which the FED
• 1:04:41
  Speaker 10: does policy, a keenness and open mindness and curiosity about that.
• 1:04:46
  Speaker 10: So we have a far better chance to deliver on
• 1:04:50
  Speaker 10: the remit that Congress gave us. And so I want
• 1:04:53
  Speaker 10: to leave you with the optimism of a new central
• 1:04:57
  Speaker 10: banker that we're committed as ever to the liver and
• 1:05:01
  Speaker 10: to offer an assurance we will thank you all very much.
• 1:05:20
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