Latest / The Paul Barron Crypto Show / Fed Rate Cut Decision🔴Jerome Powell

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Fed Rate Cut Decision🔴Jerome Powell · The Paul Barron Crypto Show

• 0:02
  Speaker 1: All right, so welcome into the livestream today. We of
• 0:04
  Speaker 1: course will be covering the FOMC meeting, what could be
• 0:08
  Speaker 1: the biggest FOMC meeting for the markets that we've had
• 0:11
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• 0:15
  Speaker 2: My name is Paul Barrew. Welcome back into the show.
• 0:17
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• 0:22
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  Speaker 1: can of course get going on all of that. We
• 0:40
  Speaker 1: are going to get going on all of this today.
• 0:42
  Speaker 1: There's a lot happening when it comes to what's going
• 0:45
  Speaker 1: on with the FED, and one of the things that
• 0:47
  Speaker 1: I want to focus in on, and the biggest issue
• 0:51
  Speaker 1: is really around what's going on on not only the
• 0:55
  Speaker 1: fed's position of whether or not we cut a quarter
• 0:58
  Speaker 1: basis points, whether or not we cut fifty basis points,
• 1:01
  Speaker 1: all of that right now is really kind of looming
• 1:04
  Speaker 1: in very in.
• 1:05
  Speaker 2: A big, big way.
• 1:06
  Speaker 1: And another factor that's going to play into this, I
• 1:08
  Speaker 1: think is and by the way, we're going to get
• 1:10
  Speaker 1: into some questions today, so make sure and leave some
• 1:13
  Speaker 1: of those over there in the comments. We'll try to
• 1:16
  Speaker 1: get to those the best we can. I'm going to
• 1:18
  Speaker 1: try to get into a tab or to here if
• 1:21
  Speaker 1: I can get our response monitors to get going here,
• 1:25
  Speaker 1: and we'll get started into that.
• 1:27
  Speaker 2: Hopefully that will happen.
• 1:28
  Speaker 1: If not, I may have to quit that and go
• 1:31
  Speaker 1: into a reboot there.
• 1:35
  Speaker 2: Yeah, let's go ahead. Let's go ahead.
• 1:36
  Speaker 1: Yeah, let me go into our first clip real quick,
• 1:39
  Speaker 1: because I think one of the things that I want
• 1:40
  Speaker 1: to play into is some of the strategies that many
• 1:44
  Speaker 1: of the analysts are starting to look at. And a
• 1:47
  Speaker 1: factor that you have to consider right now is because
• 1:50
  Speaker 1: there's kind of this back and forth between a quarter
• 1:52
  Speaker 1: basis and a fifty basis point, can we go to
• 1:55
  Speaker 1: that first?
• 1:55
  Speaker 2: Soot one? What does the market need? What does business need?
• 2:00
  Speaker 2: What does the economy need?
• 2:01
  Speaker 3: The neutral rate today is two and three quarters inflation
• 2:05
  Speaker 3: plus three quarters of one percent. I think it's probably
• 2:08
  Speaker 3: the real Fed funds rate the real neutral FED funds
• 2:12
  Speaker 3: rate that gets you to three and a half percent,
• 2:15
  Speaker 3: I think it's hard for me to argue it should
• 2:17
  Speaker 3: be lower than that. So at four and a quarter
• 2:19
  Speaker 3: four and a half FED doesn't have that much room.
• 2:22
  Speaker 3: It's got seventy five to one hundred basis points. And
• 2:25
  Speaker 3: so the reason I think the Fed will take at
• 2:27
  Speaker 3: one meeting of the time will be careful about committing
• 2:31
  Speaker 3: is one of these cross currents. The fact inflation is
• 2:34
  Speaker 3: running well above target, and also the fact I think
• 2:38
  Speaker 3: with inflation above target, you could argue being somewhat restrictive,
• 2:43
  Speaker 3: but I think it's harder to argue you want to
• 2:45
  Speaker 3: get all the way down to neutral.
• 2:46
  Speaker 2: And that tells you.
• 2:47
  Speaker 3: The FED has about maybe fifty to seventy five basis
• 2:50
  Speaker 3: points or rate cuts to work with. Unless the economy
• 2:54
  Speaker 3: weekends a lot or inflation improves meaningfully from where we are,
• 2:59
  Speaker 3: that would be a.
• 2:59
  Speaker 4: Good reason not to go fifty basis points today.
• 3:02
  Speaker 1: Right one, That was an interesting statement, right there, go
• 3:06
  Speaker 1: one hundred, go one hundred basis points. So I don't know,
• 3:09
  Speaker 1: do you guys think we are going to be in
• 3:11
  Speaker 1: a position where we get more than a.
• 3:13
  Speaker 2: Quarter basis points?
• 3:14
  Speaker 1: Because I think this is a factor that could have
• 3:17
  Speaker 1: a lot of a bearing going forward on just in
• 3:21
  Speaker 1: general what's happening around the FED rate cut. And I
• 3:25
  Speaker 1: do want to get into a couple of points real quick.
• 3:27
  Speaker 1: Let me just jump over to my screen. Hopefully we'll
• 3:30
  Speaker 1: be able to bring it back in, and it looks
• 3:31
  Speaker 1: like we are not going to be able to do that,
• 3:34
  Speaker 1: So let me get to this real quick. Let's go
• 3:37
  Speaker 1: ahead and play this next clip and I'll respond to
• 3:39
  Speaker 1: that one while we get this picked up.
• 3:42
  Speaker 5: Look, I mean, credit markets are extremely bullish at this point,
• 3:47
  Speaker 5: and you could argue that well, part of that is
• 3:49
  Speaker 5: that we have multiple rate cuts priced in. But if
• 3:52
  Speaker 5: you go back to one year ago when the FED
• 3:55
  Speaker 5: went into that September meeting and cut by fifty basis points,
• 4:00
  Speaker 5: financial conditions, credit mark market conditions are actually easier now
• 4:05
  Speaker 5: than they were one year ago. And inflation on a
• 4:09
  Speaker 5: three month annualized basis was very close to two percent
• 4:13
  Speaker 5: a year ago. Now we're closer to three percent. So
• 4:16
  Speaker 5: you have easier financial conditions and higher inflation today than
• 4:20
  Speaker 5: you did a year ago. And so, in my opinion,
• 4:24
  Speaker 5: I actually think the case is less persuasive for the
• 4:27
  Speaker 5: FED certainly fifty I think would be totally inappropriate, but
• 4:30
  Speaker 5: even twenty five, you know, I think that they could
• 4:33
  Speaker 5: end up delivering a message today that disappoints markets a
• 4:36
  Speaker 5: bit if they don't flame those expectations, which are for
• 4:41
  Speaker 5: you know, rates to fall one hundred and forty basis
• 4:43
  Speaker 5: points or so over the next twelve months. That seems
• 4:47
  Speaker 5: a bit steep considering the financial backdrop.
• 4:50
  Speaker 1: Here, all right, So I think this is the one
• 4:54
  Speaker 1: of the things that we are facing right now is
• 4:56
  Speaker 1: there is a lot of expectations built around what it
• 5:00
  Speaker 1: could be people expecting a fifty basis points or maybe
• 5:04
  Speaker 1: even multiple comps cuts here in a very short period
• 5:06
  Speaker 1: of times. So that's my concern right now, is that
• 5:09
  Speaker 1: there might be high expectations and how the market comes
• 5:13
  Speaker 1: off of that is going to be pretty critical. So
• 5:16
  Speaker 1: when you look at that, along with what we're just
• 5:18
  Speaker 1: seeing in general, I think that one of the big
• 5:20
  Speaker 1: factors that plays into this is where we are right
• 5:23
  Speaker 1: now on just inflation. Of course, if I bring up trueflation,
• 5:27
  Speaker 1: this is another factor that the Fed of course is
• 5:30
  Speaker 1: dealing with, and that is how do they balance what's
• 5:33
  Speaker 1: going on with inflation, which most likely will be I
• 5:36
  Speaker 1: won't say hyper inflation, but I anticipate we're going to continue.
• 5:38
  Speaker 2: To see ticks upward.
• 5:40
  Speaker 1: And if you look at it right now all the
• 5:41
  Speaker 1: way back here to April, let's pull that, yeah, one twenty,
• 5:45
  Speaker 1: you know it's like right at one point two two.
• 5:47
  Speaker 1: It has been on a slow pace up here over
• 5:49
  Speaker 1: the past few months. So I guess the real interesting
• 5:53
  Speaker 1: point right now that chair pal is facing is watching
• 5:57
  Speaker 1: that occur when it comes to inflation, and then at
• 6:00
  Speaker 1: the same time seeing all of these jobs reports in
• 6:04
  Speaker 1: terms of these just massive revisions coming out of the BLS.
• 6:08
  Speaker 1: That all of that plays into where we're dealing with
• 6:11
  Speaker 1: right now, which I think is whether or not we
• 6:12
  Speaker 1: see a pump or a dump in the market and going.
• 6:15
  Speaker 2: Forward here was Lark Davis says the FMC.
• 6:18
  Speaker 1: Of course, twenty twenty, every September FMC except during twenty
• 6:22
  Speaker 1: two bear market had set bitcoin up for a massive pump.
• 6:26
  Speaker 1: And this is regardless of whether the FED cuts rates
• 6:29
  Speaker 1: or not. It's less about the decision itself, It's more
• 6:31
  Speaker 1: about seasonality. Bitcoin thrives in these stretches. Now, I would
• 6:35
  Speaker 1: say this is I'm not really into cycles, other than
• 6:40
  Speaker 1: when you look at liquidity cycles in general, but right now,
• 6:43
  Speaker 1: what we're dealing with I think is a much more
• 6:46
  Speaker 1: economic pressure in general around how consumers are responding to this.
• 6:51
  Speaker 1: And this goes back to my theory that I've been
• 6:53
  Speaker 1: talking about here on the show quite a bit, and
• 6:55
  Speaker 1: that is, is this cycle going to be the halves
• 6:58
  Speaker 1: versus the halves? And what I'm mean by that is,
• 7:01
  Speaker 1: in general, you look at where Bitcoin has been, you
• 7:05
  Speaker 1: look at where the market is right now, and the
• 7:07
  Speaker 1: fact that we're seeing such institutional adoption and all of
• 7:10
  Speaker 1: those kind of issues playing into it. I think it's
• 7:13
  Speaker 1: still in a position right now where we are not
• 7:16
  Speaker 1: really seeing retail coming in. And the factor that plays
• 7:19
  Speaker 1: into this is the fact that we are not seeing
• 7:22
  Speaker 1: the kind of activity on a lot of the whether
• 7:24
  Speaker 1: you look at some of the all coins, we haven't
• 7:26
  Speaker 1: seen all coin season necessarily adopt or respond the way
• 7:31
  Speaker 1: that we had anticipated. All of those kind of things
• 7:34
  Speaker 1: are factoring into this. So it is still a big deal,
• 7:38
  Speaker 1: all right. So it looks like the number is in
• 7:41
  Speaker 1: is going to be a quarter basis point rate cut.
• 7:44
  Speaker 1: So just if you're brand new to the stream right now,
• 7:46
  Speaker 1: the FED has announced it's going to be a quarter
• 7:48
  Speaker 1: basis point. We are waiting for chair Pal to come on,
• 7:53
  Speaker 1: and this will be a very significant statement and response
• 7:57
  Speaker 1: to the press core probably the big one he's done yet,
• 8:01
  Speaker 1: because the pressure coming in from Trump and the administration,
• 8:05
  Speaker 1: and also what we're seeing about both sides of the market.
• 8:08
  Speaker 1: What I was getting at there where you have inflation
• 8:11
  Speaker 1: raising up a little bit, and if you go back
• 8:12
  Speaker 1: to trueflation, remember this chart right here, slightly going up
• 8:17
  Speaker 1: up to two.
• 8:17
  Speaker 2: Point twenty nine. Looks like we continue.
• 8:20
  Speaker 1: To rise a little bit in reality, almost weekly, and
• 8:24
  Speaker 1: I think this is a factor that will continue to
• 8:26
  Speaker 1: put a lot of pressure on Pal. I'm surprised that
• 8:30
  Speaker 1: we only got a quarter, but I anticipate that one
• 8:32
  Speaker 1: of the reasons for that is they're trying to adopt
• 8:35
  Speaker 1: or i should say, digest more data coming in on that.
• 8:38
  Speaker 1: If you look at this statement right here, when the
• 8:40
  Speaker 1: Fed ray cuts with stocks within two percent of record highs,
• 8:44
  Speaker 1: the S and P five hundred finish the next twelve
• 8:46
  Speaker 1: months higher every single time, and then twenty out of
• 8:49
  Speaker 1: twenty was the win rate, So pretty significant right there.
• 8:53
  Speaker 1: If you just look at the next run on the
• 8:55
  Speaker 1: S and P five hundred, so this would say that
• 8:58
  Speaker 1: it's bullish for stocks, it's likely that it could be
• 9:01
  Speaker 1: bullish for risk assets because of the nature of what's
• 9:05
  Speaker 1: going on with inflation and jobs. So you've got that
• 9:08
  Speaker 1: double edged shored that a FED is essentially having in
• 9:12
  Speaker 1: terms of a dual mandate, and that is trying to
• 9:15
  Speaker 1: preposition what's happening in the job market, but at the
• 9:18
  Speaker 1: same time deal with an inflationary situation from an economic standpoint.
• 9:23
  Speaker 1: So all of those things are playing out right now.
• 9:25
  Speaker 1: It's the worst possible case for Chair Powell, and I
• 9:28
  Speaker 1: think because of that, we get into some issues that
• 9:33
  Speaker 1: many people would say, well, this is why we didn't
• 9:35
  Speaker 1: need a fifty basis point rate cut. We need to
• 9:38
  Speaker 1: see how the data responds, and I think that's the
• 9:41
  Speaker 1: real question. The other thing that plays into this, this
• 9:45
  Speaker 1: is where we get into history. And let me go
• 9:47
  Speaker 1: to this one right here. If you look at how
• 9:50
  Speaker 1: it's been in the past, small stocks outperform when the
• 9:54
  Speaker 1: FED starts to do a rate cut after a long pause,
• 9:56
  Speaker 1: and that's what we've been in longest pot since last September.
• 10:00
  Speaker 1: Remember that was a fifty basis points, so this is
• 10:02
  Speaker 1: a first one we've seen in a year, and going
• 10:05
  Speaker 1: into a cycle that we're losing jobs at the pace
• 10:09
  Speaker 1: in which we're losing them. So I think this is
• 10:12
  Speaker 1: where risk assets start to play into. And if you
• 10:14
  Speaker 1: think about small stocks, mid caps, etc. That has a
• 10:18
  Speaker 1: lot of similarities to the crypto side of things when
• 10:20
  Speaker 1: it comes to what's happening in the all coin market,
• 10:23
  Speaker 1: but also in some of the other performers, even in
• 10:26
  Speaker 1: the blue chips out there other things you got to
• 10:29
  Speaker 1: look at within this. There's a few things I agree
• 10:31
  Speaker 1: with in this article. Somewhat unique characteristic of this cycle
• 10:35
  Speaker 1: has been the elongated nature, which we talked about earlier,
• 10:38
  Speaker 1: long pause since the last rate cut that was December,
• 10:41
  Speaker 1: and then returns following rate cuts have been coming after
• 10:44
  Speaker 1: a pause of at least one hundred and twenty six
• 10:47
  Speaker 1: trading days. That's the encouraging part. Market split on short
• 10:51
  Speaker 1: term reaction, and I think this is the real question mark.
• 10:54
  Speaker 1: And if we go over to the chart, let me
• 10:56
  Speaker 1: go over to let me see if I can pull
• 10:59
  Speaker 1: up Let me pull up a chart for you guys
• 11:01
  Speaker 1: real quick, because this is going to be interesting. If
• 11:04
  Speaker 1: we go to the short minute, let me go to
• 11:06
  Speaker 1: the five minute chart right here on bitcoin, and we'll
• 11:10
  Speaker 1: take a look at how it's responding to the early
• 11:15
  Speaker 1: call right now.
• 11:16
  Speaker 2: All right here we go, let's zoom in on this one.
• 11:19
  Speaker 1: So looks pretty good right now. You see a little
• 11:21
  Speaker 1: bit of a retlacement. But I think the question is
• 11:23
  Speaker 1: is how does this perform over the next week to
• 11:27
  Speaker 1: ten days, especially as the data comes in from jobs
• 11:32
  Speaker 1: course EPI and what we'll see in Powell's remarks to
• 11:36
  Speaker 1: the press today, Because this is the real question now
• 11:40
  Speaker 1: that we know we have the quarter is now we're
• 11:43
  Speaker 1: setting on a position where we got to understand is
• 11:47
  Speaker 1: he ready to really receive information differently to save jobs
• 11:53
  Speaker 1: because he's got to pick one. You can't do both.
• 11:56
  Speaker 1: It's likely that either inflation is going to continue up.
• 11:59
  Speaker 1: The question is this is Kenny thwart the job loss.
• 12:02
  Speaker 1: I still believe that's going to take a few months,
• 12:04
  Speaker 1: possibly a full quarter into early next year before we'd
• 12:08
  Speaker 1: start to see that kind of response. And again still
• 12:12
  Speaker 1: on the five minute candles, two green candles right now
• 12:14
  Speaker 1: on bitcoin going up, Let's take a look and see
• 12:18
  Speaker 1: what ethereum has been doing. Of course, that big beer
• 12:20
  Speaker 1: tracement right there and back above forty five hundred right
• 12:23
  Speaker 1: now as we are recording this and going live again.
• 12:27
  Speaker 1: If you guys are not part of our Diamond Circle,
• 12:30
  Speaker 1: I want you guys to jump in on that. It
• 12:31
  Speaker 1: is our free We always leave a link down in
• 12:34
  Speaker 1: the description, but it is our free newsletter. It's one
• 12:37
  Speaker 1: that I write out to you guys and the team
• 12:40
  Speaker 1: every week. I send out here's what I think is happening.
• 12:44
  Speaker 1: A lot of this is compiled from our current research,
• 12:47
  Speaker 1: so a lot of times we can't get all the
• 12:49
  Speaker 1: research here on the show. We try to get that
• 12:51
  Speaker 1: out to you guys in a follow up, and also
• 12:53
  Speaker 1: it will give you a little bit of an insight
• 12:55
  Speaker 1: on where I think the markets are heading. Around all
• 12:59
  Speaker 1: of that, let me go over to this whole theory
• 13:01
  Speaker 1: that I have, and this is the halves versus the halves,
• 13:04
  Speaker 1: and I've been talking about this. Here's Lisa Browmowitz coming
• 13:07
  Speaker 1: over from Bloomberg. She says, hey, consumers in the top
• 13:09
  Speaker 1: ten percent of the income distribution account for fifty percent
• 13:13
  Speaker 1: of US spending in Q two. This is up from
• 13:16
  Speaker 1: forty eight percent. Okay, I know those aren't big, you know, variables,
• 13:20
  Speaker 1: but when you look at fifty percent of the market
• 13:23
  Speaker 1: and where it's setting, that's pretty significant. That was in
• 13:27
  Speaker 1: Q one and reaching its highest level in data going
• 13:30
  Speaker 1: back to nineteen eighty nine. Okay, so many of you
• 13:34
  Speaker 1: guys probably weren't even alive in nineteen eighty nine. So
• 13:37
  Speaker 1: that's the kind of impact that we have not seen
• 13:41
  Speaker 1: from the top ten percent carrying an economy. This is
• 13:45
  Speaker 1: the thing that gets me into this cycle. And if
• 13:48
  Speaker 1: you have the halves versus the halves, and it's a
• 13:52
  Speaker 1: real number unless we get into something that I feel
• 13:56
  Speaker 1: maybe an opportunity for a younger audience and people that
• 14:00
  Speaker 1: are more meme and or all coin oriented, is they're
• 14:05
  Speaker 1: going to start to see the inflationary pressure that could
• 14:09
  Speaker 1: push them into risk assets quicker and away from what
• 14:14
  Speaker 1: we've seen in the past, which is, hey, let's try
• 14:17
  Speaker 1: to figure out how to go buy real estate or
• 14:18
  Speaker 1: other kind of assets like that. So I'm in agreement
• 14:21
  Speaker 1: in the sense that this issue right now that we're
• 14:24
  Speaker 1: dealing with around the house versus the house. That's where
• 14:27
  Speaker 1: I think a lot of the blue chip tokens are
• 14:29
  Speaker 1: going to be traded. So look for that top fifty
• 14:32
  Speaker 1: to be the ones that probably end up with the
• 14:35
  Speaker 1: most volume. Typically that's obviously the case, but do we
• 14:38
  Speaker 1: get an outlier that starts to make a run in
• 14:41
  Speaker 1: the top fifty. Let me know in the comments of
• 14:44
  Speaker 1: what token or a series of tokens that you guys
• 14:47
  Speaker 1: think will be coming in. And I know we're going
• 14:50
  Speaker 1: to get to some polls as well. I don't know
• 14:52
  Speaker 1: if the guys have put up a pole yet for
• 14:55
  Speaker 1: you guys to kind of go in this direction. But
• 14:57
  Speaker 1: this is the point I'm getting at. This is the
• 14:59
  Speaker 1: housing day right here. This is renting which is now
• 15:03
  Speaker 1: significantly more affordable than buying a home, so by one
• 15:07
  Speaker 1: of the biggest gaps ever recorded. And this is a
• 15:10
  Speaker 1: big one because again it goes back to the point
• 15:12
  Speaker 1: I'm getting at around the issue with new investors coming
• 15:16
  Speaker 1: to the market. They have to make a decision now
• 15:18
  Speaker 1: of where do they put their money. So you can
• 15:21
  Speaker 1: either say, all right, I can go into something like
• 15:24
  Speaker 1: gold and silver which is barely maybe not going to
• 15:26
  Speaker 1: move as much unless we see a debasement acceleration, or
• 15:30
  Speaker 1: I can go into bitcoin and ethereum maybe I don't
• 15:33
  Speaker 1: see the kind of run that I'm looking for, Or
• 15:36
  Speaker 1: I can go ahead and jump into these in this
• 15:39
  Speaker 1: particular case, all coins which are the MidCap kind of
• 15:41
  Speaker 1: concepts behind that that's where it gets interesting, because that's
• 15:45
  Speaker 1: when you have a market that I think could flip
• 15:47
  Speaker 1: to the positive side for all coins. And this is
• 15:51
  Speaker 1: good example. Eric Trump calls crypto the perfect hedge to
• 15:55
  Speaker 1: real estate assets. And that's the concern I have right
• 15:57
  Speaker 1: now is that the American dream has been changed. The
• 16:01
  Speaker 1: American dream now, I think is digital assets, and that's
• 16:04
  Speaker 1: coming from the under thirty crowd, maybe even the under
• 16:07
  Speaker 1: thirty five crowd, that have either abandoned the idea of
• 16:12
  Speaker 1: owning a home and understand that they're going to rent.
• 16:15
  Speaker 1: Many many people in the top ten percent believe that
• 16:19
  Speaker 1: is the strategy is that you should never put money
• 16:22
  Speaker 1: in those kind of assets. You should be looking at
• 16:24
  Speaker 1: either cash flow assets or looking at dividend assets, or
• 16:28
  Speaker 1: in this particular case, assets are going to be able
• 16:30
  Speaker 1: to appreciate in value. And that's the whole point around
• 16:33
  Speaker 1: risk assets that makes this really a good position I
• 16:36
  Speaker 1: think right now for the market in general.
• 16:38
  Speaker 2: We're going to get to some questions. I'll try to
• 16:40
  Speaker 2: get into a few of those.
• 16:41
  Speaker 1: Let me view the queue and see what they got
• 16:44
  Speaker 1: in the queue here. Let's go to all right, so
• 16:50
  Speaker 1: let's see if we can get a few questions in
• 16:52
  Speaker 1: here looks like imagine the hike everybody's looking for like
• 16:57
  Speaker 1: a fifty.
• 16:58
  Speaker 2: Where it's going to go from here?
• 16:59
  Speaker 1: I think that's going to be the issue right now.
• 17:02
  Speaker 1: Let me view the queue, all right, Well, maybe they're
• 17:05
  Speaker 1: gonna send me some questions here in a minute, because
• 17:06
  Speaker 1: I'm seeing the queue come in blank. Other things that
• 17:09
  Speaker 1: are playing into this. And as a reminder, if you
• 17:11
  Speaker 1: just join the livestream, we have a quarter basis point
• 17:16
  Speaker 1: coming in cut coming in from the FED. So as anticipated,
• 17:21
  Speaker 1: that was like the ninety percent odds on what was
• 17:24
  Speaker 1: happening over on poly market, and I think the big
• 17:27
  Speaker 1: question right now obviously goes into the next layer. There's
• 17:31
  Speaker 1: the quick rundown. People are still looking at three basic
• 17:35
  Speaker 1: three cuts now at sixty percent odds for the rest
• 17:39
  Speaker 1: of the year, that would look pretty solid for the market,
• 17:42
  Speaker 1: I think in general, and we may find that out today.
• 17:45
  Speaker 1: So stick around for this because we will go to
• 17:48
  Speaker 1: the FED.
• 17:49
  Speaker 2: Here they go.
• 17:49
  Speaker 1: On about two thirty, he'll come in, he'll start addressing
• 17:53
  Speaker 1: the press corps. And one of the points behind what
• 17:57
  Speaker 1: we're getting at right now is when you look at
• 17:58
  Speaker 1: the three basis cuts or three cuts twenty five basis
• 18:02
  Speaker 1: points each playing into this because I don't anticipate an acceleration.
• 18:07
  Speaker 1: I guess the key here will be two things. One
• 18:10
  Speaker 1: CPI data coming in, how the jobs numbers come in
• 18:13
  Speaker 1: on the next report, because if we continue to see
• 18:16
  Speaker 1: that loss, that would be a problem, and that of
• 18:20
  Speaker 1: course could flow into maybe a more aggressive cut cycle.
• 18:24
  Speaker 2: I don't know just yet, because again we'll see how
• 18:27
  Speaker 2: chair Pale reviews.
• 18:29
  Speaker 1: How they're looking at the data right now, and it's
• 18:30
  Speaker 1: very possible they may already have some early data because
• 18:34
  Speaker 1: remember the BLS is trying to accelerate how the data
• 18:37
  Speaker 1: is being delivered to the FEDS, so that in itself
• 18:40
  Speaker 1: could change a little bit of a course of action
• 18:42
  Speaker 1: here for chair pal going forward. But a big spike
• 18:46
  Speaker 1: right here on three twenty five basis points coming up,
• 18:51
  Speaker 1: and of course the two starting to slide down. So
• 18:54
  Speaker 1: maybe it is just the fact that we saw the
• 18:56
  Speaker 1: quarter come in and we feel confident.
• 18:59
  Speaker 2: That we're there. Is this a sell the.
• 19:01
  Speaker 1: News event coming in from commendal right there? I don't
• 19:05
  Speaker 1: know that it is. And two ways that this could
• 19:09
  Speaker 1: go is if you look at the situation right now
• 19:12
  Speaker 1: where bitcoin is holding steady currently, now, of course everything
• 19:16
  Speaker 1: will depend on what shair Pal says in the actual
• 19:19
  Speaker 1: press conference. But if we start to see a little
• 19:22
  Speaker 1: bit of movement in bitcoin and ethereum, could it be
• 19:26
  Speaker 1: a short term issue? And I think that's maybe more
• 19:30
  Speaker 1: of a scenario. If you guys are a trader, maybe
• 19:32
  Speaker 1: that might give you an entry opportunity or at least
• 19:35
  Speaker 1: a chance to maybe even do a short if you
• 19:37
  Speaker 1: wanted to. But I'm looking at this beyond this, and
• 19:40
  Speaker 1: when I say that, I'm looking at mid October, what
• 19:43
  Speaker 1: does this look like, What does this look like in
• 19:45
  Speaker 1: the November meeting, and then what do we see at
• 19:50
  Speaker 1: the end of the year. Because this is all really
• 19:53
  Speaker 1: narrowing down, I think, to some very key times in
• 19:56
  Speaker 1: terms of how this plays out. A couple other things
• 19:59
  Speaker 1: I want to get into is let's go to the
• 20:03
  Speaker 1: government shut down. Let me pull this up real quick,
• 20:05
  Speaker 1: and then we've got a clip on this as well.
• 20:07
  Speaker 1: So the government shut down, this is an issue right
• 20:10
  Speaker 1: now that is being faced again. This is a little
• 20:13
  Speaker 1: bit more bearish for how the markets might respond. But
• 20:16
  Speaker 1: policymakers basically have until midnight September thirtieth, that's just around
• 20:20
  Speaker 1: the corner, to be able to set this up and
• 20:22
  Speaker 1: I've got a clip of Mike Johnson talking about this.
• 20:25
  Speaker 2: Let's go to that clip real quick.
• 20:27
  Speaker 6: The Democrats want concessions on healthcare. I guess medicaid or
• 20:32
  Speaker 6: something that was in the BBB. So if you don't
• 20:36
  Speaker 6: do what they want, you are responsible for shutting down
• 20:40
  Speaker 6: the government. It's totally Republican's fault because you're not doing
• 20:44
  Speaker 6: what Jeffries and Schumer want you to do. So it's
• 20:48
  Speaker 6: obvious that it's Republican's fault.
• 20:51
  Speaker 7: Yeah, you frame that exactly right.
• 20:53
  Speaker 8: Here's what's happened.
• 20:54
  Speaker 7: We have been trying to force the government appropriations process
• 20:57
  Speaker 7: back to what we call regular order, supposed to work.
• 21:01
  Speaker 7: That's what's happening here. What they're trying to argue for,
• 21:03
  Speaker 7: not to get too deep in the weeds, is that
• 21:05
  Speaker 7: trying to insist that the Obamacare premium subsidies be continued.
• 21:09
  Speaker 7: That's a December policy debate and decision, not a September
• 21:14
  Speaker 7: funding matter. So they're trying to insert unrelated matters into
• 21:17
  Speaker 7: the middle of a clean government extension. And I don't
• 21:21
  Speaker 7: think that's going to work. If the government is shut down,
• 21:23
  Speaker 7: because they make their last stand, it will solely be
• 21:26
  Speaker 7: blamed on Democrats, because we're not playing politics with this
• 21:29
  Speaker 7: at all. We're just trying to keep the lights on.
• 21:31
  Speaker 1: All right, So that could be a little bit of
• 21:34
  Speaker 1: a concern right now going into the latter half of
• 21:37
  Speaker 1: this year, if we get any kind of shenanigans. My
• 21:40
  Speaker 1: guess is that, like most of the cases are corrupt,
• 21:44
  Speaker 1: politicians will do what they do, and that is they
• 21:46
  Speaker 1: do deals.
• 21:47
  Speaker 2: Behind each behind the doors.
• 21:49
  Speaker 1: They put together something that gives this guy that, and
• 21:52
  Speaker 1: this guy gets that, and you end up with a
• 21:54
  Speaker 1: deal at the end, and it'll be at the last minute,
• 21:57
  Speaker 1: and of course there's going to be all sorts of
• 21:59
  Speaker 1: suations that play into this that probably will not be
• 22:02
  Speaker 1: good for whatever project is being dealt with at least
• 22:05
  Speaker 1: at that voting block time. But for the markets, I
• 22:08
  Speaker 1: think the key is just keep it into a position
• 22:11
  Speaker 1: that is positive where the SMP continues to see strength
• 22:15
  Speaker 1: coming in from the administration.
• 22:16
  Speaker 2: That's the key. There.
• 22:18
  Speaker 1: One big news item that just broke around the issue
• 22:22
  Speaker 1: of this quarter basis coin. The FED approved quarter point
• 22:25
  Speaker 1: interest rate cut and sees two more coming this year. Now,
• 22:29
  Speaker 1: this is based off of what was right now and
• 22:33
  Speaker 1: eleven to one. Let me see if I can zoom
• 22:34
  Speaker 1: in on this for you guys real quick.
• 22:36
  Speaker 2: This was an.
• 22:37
  Speaker 1: Eleven to one vote, signaling less dissent than even Wall
• 22:41
  Speaker 1: Street had anticipated.
• 22:42
  Speaker 2: So it looks like, guys, this.
• 22:45
  Speaker 1: May be the turning point for what we see in
• 22:49
  Speaker 1: the market. And if this is what everybody is waiting for,
• 22:52
  Speaker 1: whether it is people coming off the sidelines from money
• 22:55
  Speaker 1: markets number seven and a half trillion setting over there,
• 22:58
  Speaker 1: whether it is major institutional capital trying to reposition family offices,
• 23:03
  Speaker 1: high networth individuals trying to figure out are we ready
• 23:07
  Speaker 1: for this? All of that now looks to be where
• 23:11
  Speaker 1: we could be in the right direction here. And if
• 23:13
  Speaker 1: Chair Pale actually confirms this this is not confirmed data,
• 23:16
  Speaker 1: this of course coming in from right now from CNBC.
• 23:21
  Speaker 1: I think that would be very positive for the markets,
• 23:24
  Speaker 1: and it could help kind of thwart what's going on
• 23:27
  Speaker 1: right now, you know, at least from Capitol Hill, if
• 23:30
  Speaker 1: we get into situations around you know, slowing of government,
• 23:35
  Speaker 1: other things that are happening right now. You've got a
• 23:37
  Speaker 1: lot of money coming into exchanges, which is huge. This
• 23:40
  Speaker 1: will be good inflow. I anticipate this is going to
• 23:42
  Speaker 1: grow significantly after that day's quarter basis point, because people
• 23:46
  Speaker 1: want to be ready. So right now this is going
• 23:49
  Speaker 1: to expect more stable cooins starting to move in USDC.
• 23:52
  Speaker 1: This will of course benefit all the ETH ecosystem. All
• 23:56
  Speaker 1: of that I think is going to be good. Ray
• 23:58
  Speaker 1: cut was already baked in. I disagree, Blaine. I don't
• 24:01
  Speaker 1: know that it was now. Granted Bitcoin had moved to
• 24:04
  Speaker 1: one P seventeen started to recorrect, but I'm not sure
• 24:07
  Speaker 1: that we don't see a pop from here going forward
• 24:10
  Speaker 1: if we look at ETH and bitcoin Bitcoin back to
• 24:13
  Speaker 1: the chart kind of up and down here on the five.
• 24:17
  Speaker 1: But I think the real question will play and I
• 24:20
  Speaker 1: don't know that a lot of people understand what that
• 24:22
  Speaker 1: c C article just gave. That was very very bullish,
• 24:27
  Speaker 1: and if that is true, if Chirpal comes in and
• 24:30
  Speaker 1: validates what that was basically reporting, this could be pretty
• 24:34
  Speaker 1: significant in terms of how the chart comes in. Jerome
• 24:38
  Speaker 1: should have cut by one percent. I agree with you, Daniel.
• 24:42
  Speaker 1: We are in a position right now where I think
• 24:45
  Speaker 1: playing catch up, unfortunately is.
• 24:47
  Speaker 2: The situation we're in.
• 24:48
  Speaker 1: And you know it's going to be one of those
• 24:50
  Speaker 1: things if we get another three quarter basis points this year,
• 24:55
  Speaker 1: at least two and then maybe they sat back and
• 24:57
  Speaker 1: look at it, because remember, I think we're still going
• 25:00
  Speaker 1: to be in for higher inflation of that period of time.
• 25:03
  Speaker 1: But the key is did we thwart any of the
• 25:05
  Speaker 1: job loss that are that are now coming into this?
• 25:09
  Speaker 2: So that in itself is a big deal.
• 25:10
  Speaker 1: Let me load up a couple other topics here that
• 25:13
  Speaker 1: I want to get to.
• 25:15
  Speaker 2: Here we go. This is another one I want to
• 25:17
  Speaker 2: hit to.
• 25:18
  Speaker 1: New York Bank Regulator is now directing banks to use
• 25:22
  Speaker 1: blockchain analytics. This is a good signal going forward because
• 25:26
  Speaker 1: as we start to see the bank ecosystem adopting crypto
• 25:29
  Speaker 1: in general, of course stable coins are going to play
• 25:32
  Speaker 1: into this. You'll get some bank tokens that will play
• 25:34
  Speaker 1: into that. I'm kind of curious on a poll, would
• 25:37
  Speaker 1: you guys trust tether you know, usd C or a
• 25:42
  Speaker 1: bank token. I think I know the answer to that,
• 25:45
  Speaker 1: but let me know in the comments what.
• 25:47
  Speaker 2: You would do.
• 25:47
  Speaker 1: Just put put your favorite stable coin in there, maybe
• 25:50
  Speaker 1: our l U, s D, whatever it might be.
• 25:52
  Speaker 2: Let me know. This is another thing that's kind of big,
• 25:55
  Speaker 2: And this was a tweet we put out.
• 25:57
  Speaker 1: This is if you guys didn't watch our show yesterday,
• 25:58
  Speaker 1: go back and check this. This is good clip by
• 26:00
  Speaker 1: Tom Lee, and he's onto something and I would agree
• 26:04
  Speaker 1: with that, and that is that he basically stated in
• 26:07
  Speaker 1: this clip that banks right now have started to explore
• 26:12
  Speaker 1: blockchain at such a level that they themselves have started
• 26:16
  Speaker 1: to pivot into what is a tech first company. And
• 26:21
  Speaker 1: I think a lot of companies are in that space
• 26:23
  Speaker 1: right now, mainly because of just AI integration that's being
• 26:26
  Speaker 1: put into so many different companies out there.
• 26:28
  Speaker 2: So yeah, I would have to agree with Tom.
• 26:30
  Speaker 1: I think you're at a position right now where banks
• 26:33
  Speaker 1: are now starting to become tech companies, and that in itself,
• 26:36
  Speaker 1: I think is just going to be one of those
• 26:37
  Speaker 1: things that starts to move the vision of where crypto
• 26:41
  Speaker 1: is going to go. Ryan shan Adams from Bankless came
• 26:44
  Speaker 1: in with this prediction right here. I don't know that, Ryan,
• 26:46
  Speaker 1: I don't know if this is much of a prediction.
• 26:48
  Speaker 1: I think this is kind of known, and that is
• 26:50
  Speaker 1: US dollar stable coins would yield is going to drain
• 26:53
  Speaker 1: bank accounts. This is something, as we've said for a
• 26:55
  Speaker 1: very long time. The question is when does it happen.
• 26:58
  Speaker 1: Do we actually get that now? And I think we
• 27:01
  Speaker 1: do because you're looking at now a competing landscape of exchanges.
• 27:07
  Speaker 1: We're starting to see a lot of aggressive moves by
• 27:10
  Speaker 1: with Robin hood Gemini after going public coinbase. My anticipation
• 27:16
  Speaker 1: is we're going to start seeing even more yields paid
• 27:19
  Speaker 1: in the DeFi ecosystem. Follow the DeFi ecosystem, because those
• 27:22
  Speaker 1: yields will also indicate a lot of strength because that
• 27:26
  Speaker 1: will pull away from the traditional exchanges. And when that
• 27:29
  Speaker 1: a cant happens, then you've got another up level for
• 27:33
  Speaker 1: how people that are under the age of thirty five
• 27:35
  Speaker 1: who do not trust the system, do not trust the system,
• 27:39
  Speaker 1: they will be in a position where they're going to
• 27:41
  Speaker 1: start to play into this. So I would agree in
• 27:43
  Speaker 1: that particular case. I don't know if it's much of
• 27:45
  Speaker 1: a of a prediction. I think it's we're already here. Wow,
• 27:50
  Speaker 1: Holy moly.
• 27:52
  Speaker 2: Okay, r l USD. When's the when's the when's the day?
• 27:55
  Speaker 1: Where the I think the guys were just messing with
• 27:57
  Speaker 1: me the you know, to show the amount of Okay, fine,
• 28:00
  Speaker 1: r l us DR is your stable point of choice.
• 28:05
  Speaker 1: Other things I want to hit on because we're going
• 28:06
  Speaker 1: to be getting to chair pal here in a second.
• 28:09
  Speaker 1: Just for those of you who just joined the live stream,
• 28:12
  Speaker 1: we have a quarter basis point coming in from the Fed.
• 28:16
  Speaker 1: We have eleven no dissension, So basically eleven governors voted
• 28:21
  Speaker 1: for the quarter basis point. Trump's tactics apparently worked. Continue
• 28:26
  Speaker 1: to pressure. I mean, he just seems like he's playing
• 28:29
  Speaker 1: out an episode of The Apprentice here. You know, he
• 28:32
  Speaker 1: puts pressure on everybody. They they're jumping around trying to
• 28:35
  Speaker 1: get things done, and then at the end they come
• 28:37
  Speaker 1: through and maybe they deliver something that in itself, but
• 28:40
  Speaker 1: the biggest news of today is that there is anticipation
• 28:44
  Speaker 1: the chair Pal is getting ready to come on live
• 28:48
  Speaker 1: with the Press Corps and tell us that we got
• 28:51
  Speaker 1: two more rate cuts that are in store for this year.
• 28:55
  Speaker 2: What would that do to the markets? Guys?
• 28:56
  Speaker 1: What would that do to the markets if you saw
• 28:58
  Speaker 1: that happen right here on PBN of Chairpal saying yeah,
• 29:03
  Speaker 1: we think the market is going to be allowing two
• 29:05
  Speaker 1: more raycuts and then we're going to step back and
• 29:07
  Speaker 1: look at it at that point, what would you do?
• 29:09
  Speaker 1: Where do you think the market would be? If you
• 29:11
  Speaker 1: look at bitcoin, it's still holding somewhat sideways right now,
• 29:16
  Speaker 1: eth holding at forty four to eighty one, somewhat sideways
• 29:19
  Speaker 1: right now. These are the five minute charts out there,
• 29:21
  Speaker 1: so definitely one Philip says that we are going to
• 29:25
  Speaker 1: get another flush out and then on longs before it
• 29:30
  Speaker 1: goes up.
• 29:30
  Speaker 2: So I don't know.
• 29:32
  Speaker 1: I mean, there are some opportunities here, but that could
• 29:36
  Speaker 1: be crazy going forward. The I commander says that article
• 29:41
  Speaker 1: is hot air FOMC meeting hasn't happened yet. Well, yeah,
• 29:45
  Speaker 1: the FOBMC meeting has happened. They actually meet and make
• 29:48
  Speaker 1: these decisions and then they announce it to the press.
• 29:53
  Speaker 1: And that's what Chairpal is going to do here. In
• 29:55
  Speaker 1: a few minutes and seven minutes we will be live
• 29:59
  Speaker 1: with mister Powell going forward on all of this, and
• 30:02
  Speaker 1: of course that will start to move things to the
• 30:05
  Speaker 1: next level, and that of course is going to be
• 30:07
  Speaker 1: whether or not we start to see other parts of
• 30:10
  Speaker 1: the economy and other parts of crypto starting to move
• 30:13
  Speaker 1: with this market.
• 30:14
  Speaker 2: Do we have the TikTok clip? Yeah, okay, let's play
• 30:17
  Speaker 2: that real quick. So I want to comment on this
• 30:19
  Speaker 2: because this is a big news.
• 30:21
  Speaker 1: If you guys didn't hear TikTok, well, let me play
• 30:23
  Speaker 1: the clip for you and then we'll go.
• 30:24
  Speaker 9: Into and the TikTok deal could be a blueprint for
• 30:28
  Speaker 9: how we can find those tense relationships. Maybe, Like to
• 30:34
  Speaker 9: your point, China is holding on to a pun intended
• 30:37
  Speaker 9: chip by doing what they're doing to restrict some of
• 30:40
  Speaker 9: the chips from Nvidia.
• 30:42
  Speaker 8: So we shall see.
• 30:43
  Speaker 10: But I do think that it's think it's all on
• 30:45
  Speaker 10: the bargaining table exactly.
• 30:47
  Speaker 9: That's exactly where we are ultimately. I think this administration
• 30:51
  Speaker 9: is very deal oriented and wants to see a deal
• 30:53
  Speaker 9: on the table. I think we are seeing indications of
• 30:57
  Speaker 9: that just by virtue of what's happening with TikTok, and
• 31:01
  Speaker 9: I do believe that there will be some easing and
• 31:04
  Speaker 9: I think once those details come out from the TikTok deal,
• 31:07
  Speaker 9: what we will see is that it's an opportunity for
• 31:11
  Speaker 9: a little bit of face saving as well.
• 31:14
  Speaker 1: All right, So there's a lot to be decided on
• 31:17
  Speaker 1: this deal. It is an issue though in the sense
• 31:21
  Speaker 1: that maybe it was used as a negotiating ploy in
• 31:23
  Speaker 1: some way for tariffs, could have been done with other
• 31:26
  Speaker 1: deals that are being done around in Nvidia and how
• 31:30
  Speaker 1: those chips play out within China right now, I mean,
• 31:33
  Speaker 1: right now, listen, this is definitely a lot of chess
• 31:36
  Speaker 1: moves being made by all of these major nations that
• 31:40
  Speaker 1: are trying to figure out this next step up into technology. Guys,
• 31:43
  Speaker 1: I'm telling you we are in a very interesting time,
• 31:47
  Speaker 1: whether you compile not only AI but also what's happening
• 31:51
  Speaker 1: with blockchain and the advancements of all this tech and
• 31:54
  Speaker 1: the fact that we've got government regulation now somewhat favoring.
• 31:57
  Speaker 2: All of this.
• 31:58
  Speaker 1: This is very very these rate cuts and I granted,
• 32:02
  Speaker 1: yes we have inflation, Yes we're going to have to
• 32:04
  Speaker 1: deal with that, but markets will correct and I anticipate
• 32:07
  Speaker 1: that these rate cuts will help businesses start putting people
• 32:11
  Speaker 1: back to work. And that's the key thing that Trump
• 32:14
  Speaker 1: will try to claim victory on is putting people back
• 32:17
  Speaker 1: to work.
• 32:17
  Speaker 2: Mark my word.
• 32:19
  Speaker 1: Market right here on September seventeenth on this Live that
• 32:22
  Speaker 1: he's going to be looking at by Q one the
• 32:25
  Speaker 1: ability to start claiming victory around getting jobs back. And
• 32:29
  Speaker 1: if that is the case, he's going to be going
• 32:30
  Speaker 1: into a midterm that is going to really start to
• 32:33
  Speaker 1: put a lot of pressure on that.
• 32:35
  Speaker 2: Here's Eleanor Tarrett. Remember this is interesting.
• 32:37
  Speaker 1: Remember that the White House voted not to include the anti
• 32:39
  Speaker 1: CBDC bill and Clarity Act in July favor in favor
• 32:43
  Speaker 1: of putting it on the Defense spending bill instead, And
• 32:46
  Speaker 1: now they just voted to retroactively combine him back to
• 32:49
  Speaker 1: the Clarity Act before sending it over to the Saidate.
• 32:51
  Speaker 2: Remember this gut adjusted here. So we've got a big.
• 32:54
  Speaker 1: Deal happening right now in DC. I asked a couple
• 32:58
  Speaker 1: of hillsources if there's a big deal. Broad response was
• 33:01
  Speaker 1: doesn't change anything as Senate is working on. Don't trust
• 33:03
  Speaker 1: them eleanor which bill will include anti CBDC language anyway,
• 33:08
  Speaker 1: hopefully that will stay on point.
• 33:10
  Speaker 2: Be careful how that goes.
• 33:12
  Speaker 1: French Hill basically said, by coming combining both measures and
• 33:16
  Speaker 1: send them to the Senate, the House continues to advance
• 33:18
  Speaker 1: both priorities. We stand ready to work with Chair Scott
• 33:22
  Speaker 1: and Lummus on a pathway forward to get both provisions
• 33:26
  Speaker 1: signed into law. If that is the case, that will
• 33:28
  Speaker 1: be more bullishness around the crypto market and blockchain in general.
• 33:34
  Speaker 1: If we get Clarity Act through, guys, I don't know
• 33:37
  Speaker 1: what else could happen that would be more bullish than that.
• 33:41
  Speaker 11: Now.
• 33:42
  Speaker 1: Granted, yes, inflation will be a problem, but that's good
• 33:44
  Speaker 1: for risk assets you've got to look at dedollarization. That
• 33:48
  Speaker 1: is real, it's happening right now. So why are you
• 33:52
  Speaker 1: not investing in digital assets? Why would you not go
• 33:54
  Speaker 1: that route? And if you're say, well that's just too riskue, well,
• 33:57
  Speaker 1: they're investing gold or silver away from the US dollar
• 34:01
  Speaker 1: and trying to keep up with inflation.
• 34:03
  Speaker 2: It just doesn't work.
• 34:06
  Speaker 1: Other things Drome might surprise everyone. Marod, Okay, you must
• 34:10
  Speaker 1: have joined late. We got a quarter basis point, so
• 34:12
  Speaker 1: we're good there. The question is whether or not he's
• 34:16
  Speaker 1: going to give us two more this year. So if
• 34:18
  Speaker 1: you are brand new to the livestream, a quarter basis
• 34:22
  Speaker 1: point point two five is the rate cut right now.
• 34:26
  Speaker 2: This is the Fed Founds rate.
• 34:27
  Speaker 1: This will start to take some interesting scenarios into the
• 34:31
  Speaker 1: market because real estate could get affected on this. And
• 34:35
  Speaker 1: what I see by that because a quarter racist point
• 34:37
  Speaker 1: you might say that's not really going to move interest rates,
• 34:40
  Speaker 1: think about this.
• 34:41
  Speaker 2: Guys.
• 34:41
  Speaker 1: Banks will be jockeying for position. They will start looking
• 34:46
  Speaker 1: at ways to lever up on giving a lower interest
• 34:50
  Speaker 1: rate on mortgage deals, even though the Fed Founds rate
• 34:53
  Speaker 1: isn't there just yet, but they know it's coming. That
• 34:56
  Speaker 1: is a factor that has been done in banking for
• 34:58
  Speaker 1: a very long time. And if you see early bank
• 35:01
  Speaker 1: banking move that says they're dropping mortgage rates or car
• 35:03
  Speaker 1: loan rates, then you know that you're going to start
• 35:05
  Speaker 1: to see a little bit of softness in the market.
• 35:08
  Speaker 1: And of course that goes back to the point I'm
• 35:10
  Speaker 1: getting at, which is get ready for a big move forward.
• 35:16
  Speaker 1: And that's that's the thing right now that I'm looking
• 35:18
  Speaker 1: at a couple other things.
• 35:19
  Speaker 2: One how many cuts this year? Looks like it could
• 35:21
  Speaker 2: be three?
• 35:22
  Speaker 1: We will find out here in a minute, and if
• 35:24
  Speaker 1: we're lucky, if we get two more. The real question
• 35:28
  Speaker 1: will be December. He may skip a month, so be
• 35:31
  Speaker 1: on the lookout for that. We'll cover that throughout the
• 35:33
  Speaker 1: month because there's gonna be a lot to talk about
• 35:35
  Speaker 1: there because there is a ton going forward.
• 35:38
  Speaker 2: Is this I saw something come in? Should we take profit?
• 35:42
  Speaker 2: All right?
• 35:42
  Speaker 1: First of all, not financial advice, but anything that I
• 35:46
  Speaker 1: would do right now. I wait, in my position I'm
• 35:49
  Speaker 1: looking at mid October, would there be some options, some
• 35:53
  Speaker 1: options and some opportunities to dollar cost average out of
• 35:57
  Speaker 1: certain assets. And if you're really bullish toward an all
• 36:01
  Speaker 1: coin run, then maybe you know factoring into those all
• 36:04
  Speaker 1: coins would be an option to go in that direction,
• 36:06
  Speaker 1: But right now, I think it's a little bit too early.
• 36:09
  Speaker 1: It's a good thing. I mean, obviously Eth has not
• 36:11
  Speaker 1: hit its stride just yet. I think Solana is going
• 36:14
  Speaker 1: to go to three hundred. I think XRP is going
• 36:17
  Speaker 1: to see a big run here at the end of
• 36:18
  Speaker 1: the year. And I think we're going to see Ethereum
• 36:21
  Speaker 1: and probably Suite and a handful of other tokens make
• 36:24
  Speaker 1: some pretty serious runs going forward.
• 36:28
  Speaker 2: Pradeep says Eth versus soul.
• 36:31
  Speaker 1: Right now, as we trade today, I would probably pick
• 36:35
  Speaker 1: Solana only just because of where I think it will
• 36:37
  Speaker 1: be in the short term.
• 36:38
  Speaker 2: Now, long term Eth might be a.
• 36:41
  Speaker 1: Better play if you're a big, big proponent of how
• 36:44
  Speaker 1: Eth is as an asset in general, meaning a long
• 36:47
  Speaker 1: term asset that could be two to three years.
• 36:49
  Speaker 2: Here's chair palell.
• 36:51
  Speaker 1: Let's get ready to cut to this live all right, guys,
• 36:53
  Speaker 1: here we go.
• 37:00
  Speaker 8: Good afternoon.
• 37:02
  Speaker 12: My colleagues and I remain squarely focused on achieving our
• 37:05
  Speaker 12: dual mandate goals of maximum employment and stable prices for
• 37:08
  Speaker 12: the benefit of the American people. While the unemployment rate
• 37:12
  Speaker 12: remains low, it has edged up job gains have slowed
• 37:16
  Speaker 12: and downside risks to employment have risen. At the same time,
• 37:20
  Speaker 12: inflation has risen recently and remained somewhat elevated. In support
• 37:25
  Speaker 12: of our goals and in light of the shift in
• 37:27
  Speaker 12: the balance of risks, today, the Federal Open Market Committee
• 37:31
  Speaker 12: decided to lower our policy interest rate by a quarter
• 37:33
  Speaker 12: percentage point. We also decided to continue to reduce our
• 37:37
  Speaker 12: securities holdings. I'll have more to say about monetary policy
• 37:41
  Speaker 12: after briefly reviewing economic developments. Recent indicators suggest that growth
• 37:47
  Speaker 12: of economic activity has moderateddp GDP rose at a pace
• 37:53
  Speaker 12: of around one and a half percent in the first
• 37:55
  Speaker 12: half of the year, down from two point five percent
• 37:58
  Speaker 12: last year. The moderation and growth largely reflects a slow
• 38:02
  Speaker 12: down in consumer spending. In contrast, business investment in equipment
• 38:08
  Speaker 12: and intangibles has picked up from last year's pace. Activity
• 38:12
  Speaker 12: in the housing sector remains weak. In our summary of
• 38:16
  Speaker 12: economic projections, the median participant projects GDP to rise one
• 38:20
  Speaker 12: point six percent this year and one point eight percent
• 38:23
  Speaker 12: next year, a touch stronger than projected in June. In
• 38:29
  Speaker 12: the labor market, the unemployment rate edged up to four
• 38:31
  Speaker 12: point three percent in August but remains little changed over
• 38:34
  Speaker 12: the past year. At a relatively low level, payroll job
• 38:39
  Speaker 12: gains have slowed significantly to a pace of just twenty
• 38:42
  Speaker 12: nine thousand per month over the past three months. A
• 38:46
  Speaker 12: good part of the slowing likely reflects a decline in
• 38:49
  Speaker 12: the growth of the labor force due to lower immigration
• 38:52
  Speaker 12: and lower labor force participation. Even so, labor demand has
• 38:57
  Speaker 12: softened and the recent pace of job creation appears to
• 39:00
  Speaker 12: be running below the break even rate needed to hold
• 39:03
  Speaker 12: the unemployment rate constant. In addition, wage growth has continued
• 39:09
  Speaker 12: to moderate, while still outpacing inflation. Overall, the market slowing
• 39:14
  Speaker 12: in both the supply of and demand four workers is unusual.
• 39:19
  Speaker 12: In this less dynamic and somewhat softer labor market. The
• 39:23
  Speaker 12: downside risks to employment appear to have arisen in our SEP.
• 39:28
  Speaker 12: The median projection for the unemployment rate is four point
• 39:31
  Speaker 12: five percent at the end of this year and edges
• 39:34
  Speaker 12: down thereafter. Inflation has eased significantly from its highs in
• 39:39
  Speaker 12: mid twenty twenty two, but remains somewhat elevated relative to
• 39:43
  Speaker 12: our two percent longer run goals. Estimates based on the
• 39:48
  Speaker 12: Consumer Price Index and other data indicate that total PCEE
• 39:52
  Speaker 12: prices rose two point seven percent over the twelve months
• 39:55
  Speaker 12: ending in August, and that excluding the volatile food and
• 39:58
  Speaker 12: energy categories, core PCEE prices rose two point nine percent.
• 40:04
  Speaker 12: These readings are higher than earlier in the year, as
• 40:07
  Speaker 12: inflation for goods has picked up. In contrast, disinflation appears
• 40:12
  Speaker 12: to be continuing for services. Near term measures of inflation
• 40:16
  Speaker 12: expectations have moved up on balance over the course of
• 40:20
  Speaker 12: this year on news about tariffs, as reflected in both
• 40:23
  Speaker 12: market and survey based measures. Beyond the next year or so, however,
• 40:29
  Speaker 12: most measures of longer term expectations remain consistent with our
• 40:32
  Speaker 12: two percent inflation goal. The median projection in the SEP
• 40:37
  Speaker 12: for total PCEE inflation is three point zero percent this
• 40:41
  Speaker 12: year and falls to two point six percent in twenty
• 40:44
  Speaker 12: twenty six and to two point one percent in twenty
• 40:47
  Speaker 12: twenty seven. Our monetary policy actions are guided by our
• 40:52
  Speaker 12: dual mandate to promote maximum employment and stable prices for
• 40:56
  Speaker 12: the American people. At today's meeting, the Committee decided to
• 41:00
  Speaker 12: lower the target range for the federal friends rate by
• 41:03
  Speaker 12: a quarter percentage point to four to foreign a quarter percent,
• 41:08
  Speaker 12: and to continue reducing the size of our balance sheet.
• 41:12
  Speaker 12: Changes to government policies continue to evolve, and their effects
• 41:16
  Speaker 12: on the economy remain uncertain. Higher tariffs have begun to
• 41:20
  Speaker 12: push up prices in some categories of goods, but their
• 41:23
  Speaker 12: overall effects on economic activity and inflation remain to be seen.
• 41:28
  Speaker 12: A reasonable base case is that the effects on inflation
• 41:31
  Speaker 12: will be relatively short lived a one time shift in
• 41:34
  Speaker 12: the price level, but it is also possible that the
• 41:38
  Speaker 12: inflationary effects could instead be more persistent, and that is
• 41:42
  Speaker 12: a risk to be assessed and managed. Our obligation is
• 41:46
  Speaker 12: to ensure that a one time increase in the price
• 41:48
  Speaker 12: level does not become an ongoing inflation problem. In the
• 41:53
  Speaker 12: near term, risks to inflation are tilted to the upside
• 41:56
  Speaker 12: and risks to employment to the downside, a challenging situation
• 42:01
  Speaker 12: when our goals are intentioned like this. Our framework calls
• 42:04
  Speaker 12: for us to balance both sides of our dual mandate,
• 42:08
  Speaker 12: with downside risks to employment having increased, the balance of
• 42:11
  Speaker 12: risks has shifted accordingly, we judged appropriate at this meeting
• 42:16
  Speaker 12: to take another step toward more neutral policy stance. With
• 42:20
  Speaker 12: today's decision, we remain well positioned to respond in a
• 42:23
  Speaker 12: timely way to potential economic developments. We will continue to
• 42:27
  Speaker 12: determine the appropriate stance of monetary policy based on the
• 42:31
  Speaker 12: incoming data, the evolving outlook, and the balance of risks.
• 42:36
  Speaker 12: In our SEP FOMC, participants wrote down their individual assessments
• 42:41
  Speaker 12: of an appropriate path for the federal funds rate based
• 42:44
  Speaker 12: on what each participant judges to be the most likely
• 42:46
  Speaker 12: scenario for the economy. The median participant projects at the
• 42:51
  Speaker 12: appropriate level of the federal funds rate will be three
• 42:53
  Speaker 12: point six percent at the end of this year, three
• 42:55
  Speaker 12: point four percent at the end of twenty twenty six,
• 42:58
  Speaker 12: and three point one percent at the end of twenty
• 43:01
  Speaker 12: twenty seven. This path is one quarter percentage point lower
• 43:05
  Speaker 12: than projected in June. As is always the case, these
• 43:09
  Speaker 12: individual forecasts are subject to uncertainty and they're not a
• 43:13
  Speaker 12: committee plan or decision. Policy is not on a preset course.
• 43:19
  Speaker 12: The FED has been assigned two goals for monetary policy,
• 43:22
  Speaker 12: maximum employment and stable prices. We remain committed to supporting
• 43:26
  Speaker 12: maximum employment, bringing inflation sustainably to our two percent goal,
• 43:30
  Speaker 12: and keeping longer term inflation expectations well anchored. Our success
• 43:35
  Speaker 12: in delivering on these goals matters to all Americans. We
• 43:39
  Speaker 12: understand that our actions affect communities, families, and businesses across
• 43:43
  Speaker 12: the country. Everything we do is in service to our
• 43:46
  Speaker 12: public mission, and we at the FED will do everything
• 43:48
  Speaker 12: we can to achieve our maximum employment and price stability goals.
• 43:53
  Speaker 8: Thank you. I look forward to our discussion.
• 44:00
  Speaker 13: Thank you, Chris Rygabert, Associated Press. As you know, FED
• 44:04
  Speaker 13: Governor Stephen Myron has continued kept his position at the
• 44:08
  Speaker 13: White House even as he's joined the FED board. This
• 44:10
  Speaker 13: is the first time I believe the Fed's board has
• 44:13
  Speaker 13: had someone with executive branch ties in decades. Does this
• 44:17
  Speaker 13: compromise the Fed's independence from day to day politics? And relatedly,
• 44:22
  Speaker 13: how can you maintain the public's perception the FED is
• 44:24
  Speaker 13: politically independent with this dynamic think.
• 44:28
  Speaker 12: So, we did welcome a new committee member today as
• 44:31
  Speaker 12: we always do, and the Committee remains united and in
• 44:34
  Speaker 12: pursuing our dual mandate goals. We're strongly committed to maintaining
• 44:40
  Speaker 12: our independence and beyond that, I really don't have anything
• 44:43
  Speaker 12: to share.
• 44:44
  Speaker 2: And then just as quick follow I'm SARTs.
• 44:46
  Speaker 13: Can you? You and other FED officials have spoken extensively
• 44:49
  Speaker 13: about the impact of tariffs on infletion, although perhaps with
• 44:53
  Speaker 13: many companies appearing to eat the tariffs, and tariffs may
• 44:58
  Speaker 13: be impacting the labor market other parts of the economy instead.
• 45:02
  Speaker 13: Do you see that as a possible outcome here, that
• 45:03
  Speaker 13: tariffs are the reason we're seeing some slowing, particularly the
• 45:06
  Speaker 13: labor market, rather than in inflation.
• 45:09
  Speaker 8: Thanks, you know, it's certainly possible.
• 45:12
  Speaker 12: You know, we're beginning to see we have begun to
• 45:15
  Speaker 12: see goods prices showing through into higher inflation. And actually
• 45:20
  Speaker 12: the increase in goods prices accounts for most of the
• 45:23
  Speaker 12: increase in inflation, or perhaps all of the increase in
• 45:25
  Speaker 12: inflation over the course of this year. Those are not
• 45:29
  Speaker 12: very large effects at this point, and we do expect
• 45:33
  Speaker 12: them to continue to build over the course of the
• 45:36
  Speaker 12: rest of the year and into next year. And you know,
• 45:39
  Speaker 12: it's also possible and that there may be effects on unemployment,
• 45:43
  Speaker 12: but that I would say, if you're looking at why
• 45:46
  Speaker 12: employment is doing what it's doing, that's much more about
• 45:49
  Speaker 12: the change in immigration. So the supply of workers has
• 45:51
  Speaker 12: obviously come way down. There's very little growth, if any,
• 45:55
  Speaker 12: in the supply of workers, and at the same time
• 45:57
  Speaker 12: demand for workers has also come down sharply and to
• 46:02
  Speaker 12: the point where we see what I've called a curious balance.
• 46:06
  Speaker 12: You know, typically when we say things are in balance,
• 46:08
  Speaker 12: that sounds good. But in this case, the balance is
• 46:11
  Speaker 12: because both supply and demand have come down quite sharply.
• 46:15
  Speaker 8: Now demand coming down.
• 46:16
  Speaker 12: A little more sharply because we see we now see
• 46:18
  Speaker 12: the unemployment rate edging up.
• 46:26
  Speaker 14: Nick tim Rossa to Wall Street Journal Chairpell do economic
• 46:29
  Speaker 14: conditions and the balance of risks no longer warrant a
• 46:32
  Speaker 14: restrictive policy setting.
• 46:35
  Speaker 12: So I don't think we can say we can say that.
• 46:38
  Speaker 12: What we can say is this that over the course
• 46:40
  Speaker 12: of this year, we've kept our polly A policy at
• 46:43
  Speaker 12: a restrictive level. And people have different views, but a
• 46:46
  Speaker 12: clearly restrictive level, I would say so, And we were
• 46:49
  Speaker 12: able to do that over the course of this year
• 46:52
  Speaker 12: because the labor market was in very solid condition, with
• 46:54
  Speaker 12: strong job creation and all those things. I think if
• 46:58
  Speaker 12: you go back to April and now look the revised
• 47:00
  Speaker 12: job creation numbers for May, June, July, and August, you
• 47:05
  Speaker 12: can kind of I can no longer say that.
• 47:07
  Speaker 8: So what that means is that.
• 47:09
  Speaker 12: The risks, which the risks were clearly tilted toward inflation.
• 47:13
  Speaker 12: I would say they're moving toward toward equality. Maybe they're
• 47:17
  Speaker 12: not quite out of quality. We don't need to know that,
• 47:19
  Speaker 12: but we do know that they've moved meaningfully toward greater
• 47:23
  Speaker 12: equality the risks between the two goals, and that suggests
• 47:26
  Speaker 12: that we should be moving in the direction of neutral.
• 47:28
  Speaker 8: And that's what we did today.
• 47:30
  Speaker 14: Under what circumstances would a larger than twenty five basis
• 47:33
  Speaker 14: points rate cut be warranted and how seriously was that
• 47:37
  Speaker 14: option entertained at your meeting this week?
• 47:40
  Speaker 12: There wasn't widespread support at all for a fifty basis
• 47:43
  Speaker 12: point cut today. You know, I think we've done We've
• 47:47
  Speaker 12: done very large rate hikes and very large rate cuts
• 47:50
  Speaker 12: in the last five years, and you tend to do
• 47:52
  Speaker 12: those at a time when you feel that policy is
• 47:56
  Speaker 12: out of place and needs to move quickly to a
• 47:59
  Speaker 12: new place.
• 48:00
  Speaker 8: Not at all what I feel certainly now.
• 48:02
  Speaker 12: I feel like our policy has been doing the right
• 48:04
  Speaker 12: thing so far this year. I think we were right
• 48:06
  Speaker 12: to wait and see how tariffs and inflation and the
• 48:10
  Speaker 12: labor market evolved. I think we're now reacting to you
• 48:14
  Speaker 12: to the much lower level of job creation and other
• 48:17
  Speaker 12: evidence of softening in the labor market. And saying, well,
• 48:19
  Speaker 12: those risks are maybe not fully balanced, but moving in
• 48:23
  Speaker 12: the direction of balance now, and so that warrants a
• 48:25
  Speaker 12: change in policy.
• 48:29
  Speaker 15: Colby Smith of The New York Times. Should we be
• 48:32
  Speaker 15: viewing today's cut as the Committee taking out some insurance
• 48:35
  Speaker 15: against the possibility that the labor market is at risk
• 48:38
  Speaker 15: of weakening? Or is it the committee's view that the
• 48:40
  Speaker 15: dynamics of a downturn are already in place. I guess
• 48:43
  Speaker 15: I'm just trying to square the shift and the rate
• 48:46
  Speaker 15: forecasts in the SEP towards more cuts than just three
• 48:50
  Speaker 15: months ago with the fact that the forecast for unemployment
• 48:53
  Speaker 15: didn't change.
• 48:54
  Speaker 12: Yeah, I think you can think of this in a
• 48:56
  Speaker 12: way as a risk management cut, because if you look
• 48:59
  Speaker 12: at the SEP, actually the projections for growth this year
• 49:04
  Speaker 12: and next actually ticked up just a little bit, and
• 49:07
  Speaker 12: inflation and unemployment didn't really move on.
• 49:09
  Speaker 8: So what's different now.
• 49:10
  Speaker 12: What's different now is that you see a very different
• 49:12
  Speaker 12: picture of the risks to the labor market you've seen.
• 49:16
  Speaker 12: You know, we were looking at one hundred and fifty
• 49:17
  Speaker 12: thousand jobs a month at the time of the last meeting,
• 49:20
  Speaker 12: and now we see the revisions and we see the
• 49:22
  Speaker 12: new numbers, and I didn't I don't want to put
• 49:24
  Speaker 12: too much emphasis on payroll job creation, but it's just
• 49:27
  Speaker 12: one of the things that suggests that the labor market
• 49:29
  Speaker 12: is really cooling off, and that tells you that it's
• 49:33
  Speaker 12: time to take that into account in our policy.
• 49:38
  Speaker 15: The SEP once again the median participant has inflation higher
• 49:41
  Speaker 15: than previously expected by the end of next year, and
• 49:44
  Speaker 15: the FED not getting back to the two percent target
• 49:46
  Speaker 15: until twenty twenty eight. So I guess I'm just wondering
• 49:49
  Speaker 15: how you characterize the risk to price pressures of kicking
• 49:51
  Speaker 15: off a series of cuts at this point.
• 49:54
  Speaker 8: Yeah, So I would look at it this way.
• 49:56
  Speaker 12: We fully understand and appreciate that we need to remain
• 50:02
  Speaker 12: fully committed to restoring two percent inflation on a sustained basis,
• 50:07
  Speaker 12: and we will do that. At the same time, we've
• 50:09
  Speaker 12: got a weigh the risks to the two goals, and
• 50:12
  Speaker 12: I would say, since really since April, to me, the
• 50:16
  Speaker 12: risks of higher and more persistent inflation have probably become
• 50:20
  Speaker 12: a little less, and that's partly because the labor market
• 50:23
  Speaker 12: is softened. GDP growth has slowed, and so I would
• 50:29
  Speaker 12: just say that the risks there have been less than
• 50:35
  Speaker 12: one might think. And in terms of the labor market,
• 50:38
  Speaker 12: what we're seeing is it's unemployment is still low, it's
• 50:42
  Speaker 12: still relatively low ripe, but we're seeing downside.
• 50:44
  Speaker 16: Risks Michael McKee from Bloomberg Radio and Television. I'm a
• 50:55
  Speaker 16: little confused by your explanation of the FED cutting rates
• 50:59
  Speaker 16: because of unemployment. If you think that most of what's
• 51:02
  Speaker 16: happening in the employment area is related to immigration, which
• 51:06
  Speaker 16: your rate cuts wouldn't address, how do you see that
• 51:11
  Speaker 16: as more important than inflation, which has remained almost a
• 51:16
  Speaker 16: full percentage point above your target.
• 51:18
  Speaker 12: Well, I was saying that what's happening in the labor
• 51:20
  Speaker 12: market has more to do with immigration than it has
• 51:23
  Speaker 12: to do with tariffs. That was the question I was answering.
• 51:26
  Speaker 12: So I wouldn't say that all of what's happening in
• 51:28
  Speaker 12: the labor market is due to tariffs. I mean, you
• 51:30
  Speaker 12: clearly have a slowing in it due to immigration. You
• 51:33
  Speaker 12: clearly have a slowing in demand which is now perhaps
• 51:36
  Speaker 12: more than that in supply, and we know that because
• 51:39
  Speaker 12: the unemployment.
• 51:40
  Speaker 8: Rate has ticked up. So that's how that's what I
• 51:45
  Speaker 8: meant by that.
• 51:46
  Speaker 16: I follow up every year since twenty fifteen, the SEP
• 51:49
  Speaker 16: has forecast that you would hit your target two years later,
• 51:53
  Speaker 16: and this year, this SEP says you're going to hit
• 51:57
  Speaker 16: your target two years later. Two percent does not seem
• 52:00
  Speaker 16: to be in sight. Does that suggest that the two
• 52:03
  Speaker 16: percent target is not really achievable? And does this present
• 52:07
  Speaker 16: any credibility problems for you in telling people that that's
• 52:12
  Speaker 16: what you're going to do if you can never reach it?
• 52:15
  Speaker 8: Well, I mean that you're right.
• 52:16
  Speaker 12: It does say we're going to get to two percent
• 52:17
  Speaker 12: inflation in twenty twenty eight at the end of twenty eight,
• 52:20
  Speaker 12: But that's you know, that's literally how you put the
• 52:22
  Speaker 12: projections together. You're writing down a rate path which is
• 52:26
  Speaker 12: designed to create over the course of the SEP, you know,
• 52:30
  Speaker 12: timeframe two percent inflation and maximum employment too.
• 52:33
  Speaker 8: So that's that's that's all that is.
• 52:35
  Speaker 12: You know, we don't no one really knows where the
• 52:38
  Speaker 12: economy will be in three years, But the nature of
• 52:41
  Speaker 12: the exercise is to write down policy that you believe
• 52:45
  Speaker 12: would return to the two percent goal over the over
• 52:47
  Speaker 12: at least at least by the end of the exercise.
• 52:54
  Speaker 17: Thanks so much, Elizbiechlzie with ABC News. The latest inflation
• 52:59
  Speaker 17: report shows that price are still going up across key
• 53:01
  Speaker 17: categories from many households, including groceries. What will the FED
• 53:05
  Speaker 17: do if prices pick up more so?
• 53:09
  Speaker 12: Our expectation, and you can see this consistently through the year,
• 53:13
  Speaker 12: has been that inflation will move up this year, but
• 53:16
  Speaker 12: that the effect basically because of the effects on goods
• 53:20
  Speaker 12: prices from tariffs, but that those will turn out to
• 53:24
  Speaker 12: be a one time price increase as opposed to creating
• 53:27
  Speaker 12: an inflationary process. That's been our forecast pretty much every
• 53:32
  Speaker 12: all the individual forecasts say that we can't just assume
• 53:36
  Speaker 12: that though right we have to. Our job is literally
• 53:39
  Speaker 12: to make sure that that is what happens, and we
• 53:41
  Speaker 12: will do that job right now. The situation we're in
• 53:45
  Speaker 12: is that we see we see inflation. We continue to
• 53:49
  Speaker 12: expect it to move up, maybe not as high as
• 53:50
  Speaker 12: we would have expected it to move up a few
• 53:53
  Speaker 12: months ago. The pass through into of the tariffs into
• 53:57
  Speaker 12: inflation has been slower and smaller. The labor market has softened,
• 54:01
  Speaker 12: so the case for there being a persistent inflation outbreak
• 54:06
  Speaker 12: is less. And so that's why we think it's time
• 54:10
  Speaker 12: for us really to acknowledge that the risks to the
• 54:12
  Speaker 12: other mandate have grown and that we should move in
• 54:15
  Speaker 12: the direction of neutral.
• 54:17
  Speaker 8: So what'll we do. We'll do what we need to do.
• 54:19
  Speaker 12: But we have two mandates and we try to balance
• 54:21
  Speaker 12: them for a long time. Our framework says that when
• 54:26
  Speaker 12: our two goals are intentioned, this is quite an unusual situation.
• 54:29
  Speaker 12: How do we decide what to do? Because our tools
• 54:32
  Speaker 12: can't do two things at once. What we do is
• 54:35
  Speaker 12: we ask which is farther from how far is each
• 54:37
  Speaker 12: from the goal? And how long is it expected to
• 54:39
  Speaker 12: get to the goal. And then we think about those
• 54:42
  Speaker 12: things and we see, as I mentioned, we have been
• 54:45
  Speaker 12: our policy had been really skewed toward inflation for a
• 54:48
  Speaker 12: long time. Really, now we see that there's downside risks
• 54:51
  Speaker 12: clearly in the labor market, and so we're moving in
• 54:54
  Speaker 12: direction of more neutral.
• 54:55
  Speaker 17: Policycerned are you about the slowdown in the jobs market
• 54:58
  Speaker 17: for households at homes, especially younger Americans struggling to land
• 55:01
  Speaker 17: a job.
• 55:02
  Speaker 12: So it's it's an interesting labor market, and obviously we
• 55:06
  Speaker 12: think it's appropriate that we reduce our rates so that
• 55:10
  Speaker 12: we become more neutral, which will be which presumably will
• 55:13
  Speaker 12: be better for the labor market. You see people who
• 55:17
  Speaker 12: are sort of more at the margin, so kids coming
• 55:20
  Speaker 12: out of college and younger people minorities are are having
• 55:26
  Speaker 12: a hard time finding jobs. The overall job finding rate
• 55:29
  Speaker 12: is very very low. However, the layoff rate is also
• 55:33
  Speaker 12: very low, so you've got a low firing, low hiring environment,
• 55:37
  Speaker 12: and the concern is that if you start to see layoffs,
• 55:41
  Speaker 12: the people who are laid off won't There won't be
• 55:43
  Speaker 12: a lot of hiring going on, so that could very
• 55:45
  Speaker 12: quickly flow into into higher unemployment.
• 55:48
  Speaker 8: In a healthier economy, healthier labor market, there would be
• 55:53
  Speaker 8: jobs for those people. But now the hiring rate is
• 55:55
  Speaker 8: very very low. So that's been a.
• 55:57
  Speaker 12: Growing concern over the last few months, and it's one
• 56:00
  Speaker 12: of the reasons why we think it's appropriate that we
• 56:02
  Speaker 12: begin to begin to shift our policy focus toward a
• 56:05
  Speaker 12: more balanced one.
• 56:11
  Speaker 11: Steve Lee spent c mister Kerr in the past during
• 56:16
  Speaker 11: raycuse you use the word recalibration, and I wonder if
• 56:20
  Speaker 11: you pointedly did not use it this time, and in fact,
• 56:23
  Speaker 11: when you said policy is not in a preset course
• 56:25
  Speaker 11: that you mean to that is sort of the opposite
• 56:28
  Speaker 11: of recalibration. Are we meeting to meeting data point by data?
• 56:33
  Speaker 2: Point.
• 56:33
  Speaker 11: Are we in the process here of getting back to neutral?
• 56:36
  Speaker 11: Thank you?
• 56:38
  Speaker 12: So I think we are. We're in a meeting by
• 56:40
  Speaker 12: meeting situation. We're going to be looking at the data.
• 56:43
  Speaker 5: You know.
• 56:43
  Speaker 12: Let me let me say a word about the SEP
• 56:45
  Speaker 12: really here, So we often point this out. This is
• 56:48
  Speaker 12: what the SEP is. It's it's an accumulation a accumulation
• 56:54
  Speaker 12: of the individual projections of nineteen people showing what they
• 56:57
  Speaker 12: believe at a particular moment in time to be the
• 57:00
  Speaker 12: most likely path for the economy and thus the appropriate
• 57:03
  Speaker 12: path for monetary policy as well. And as you know,
• 57:06
  Speaker 12: we don't debate or try to agree on what that is.
• 57:09
  Speaker 12: We just write them down and accumulate them. We do
• 57:11
  Speaker 12: sometimes discuss them, and so we always say we're not
• 57:14
  Speaker 12: on a preset path. Then we really mean that the
• 57:17
  Speaker 12: actual decisions we make are going to be based on
• 57:19
  Speaker 12: the incoming data of the evolving outlook and the balance
• 57:22
  Speaker 12: of risks at the time the decisions are actually made.
• 57:25
  Speaker 8: So you will have seen that we have ten.
• 57:28
  Speaker 12: Participants out of nineteen who wrote down two or more
• 57:32
  Speaker 12: cuts for the remainder of the year, and nine who
• 57:34
  Speaker 12: wrote down fewer than In fact, in a good number
• 57:37
  Speaker 12: of cases, no more cuts. So rather than looking at so,
• 57:42
  Speaker 12: rather than looking at this as certainty, I would encourage people,
• 57:45
  Speaker 12: as always to look at the sep as through the
• 57:48
  Speaker 12: lens of probability and so there are different possible outcomes
• 57:52
  Speaker 12: and likelihoods, rather than this one is certain and this
• 57:56
  Speaker 12: one isn't happening.
• 57:57
  Speaker 8: So that's what I would say.
• 57:59
  Speaker 11: Thank you for getting to my follow up question, is
• 58:02
  Speaker 11: the time right?
• 58:03
  Speaker 1: So there's a lot happening here on what he's doing
• 58:06
  Speaker 1: in terms he's waffling both ways in terms of these
• 58:09
  Speaker 1: right cuts.
• 58:10
  Speaker 2: We'll talk about this in a minute. As he tries
• 58:12
  Speaker 2: to get himself out of more grave digging, which is
• 58:15
  Speaker 2: what I think he's doing. It's terrible. Let's take a look.
• 58:19
  Speaker 8: Labor market is really strong. That's when you be careful man. Inflation.
• 58:22
  Speaker 12: So we have a situation where we have two sided risk,
• 58:26
  Speaker 12: and that means there's no risk free path. And so
• 58:28
  Speaker 12: it's quite a different, difficult situation for policymakers. And it's
• 58:32
  Speaker 12: it's not at all surprising to me that you have
• 58:36
  Speaker 12: a range of views. It's not so much about having
• 58:40
  Speaker 12: different views for the path of the economy, but it's
• 58:42
  Speaker 12: partly that. But it's also partly about what's the right
• 58:45
  Speaker 12: thing to do in light of this, of the tension
• 58:48
  Speaker 12: between the two goals, how do you wait them? How
• 58:51
  Speaker 12: worry to you about one versus the other?
• 58:52
  Speaker 8: End? And so it's it's natural.
• 58:54
  Speaker 12: I think it would actually be surprising if you didn't
• 58:57
  Speaker 12: have a pretty wide range of views based on you know,
• 59:00
  Speaker 12: in this kind of highly unusual situation.
• 59:02
  Speaker 8: And we do so. But you know, we get.
• 59:06
  Speaker 12: Together, we discuss, we have a great discussion, and then
• 59:09
  Speaker 12: we decide what to do and we act. But you're
• 59:12
  Speaker 12: right there, it is it's a wide dispersion of views,
• 59:15
  Speaker 12: and I think that's understandable and natural in the current situation.
• 59:24
  Speaker 10: Hi, Victoria Aguida with Politico, You've talked a lot about
• 59:28
  Speaker 10: FED independence and the importance of it over the years.
• 59:31
  Speaker 10: But as as markets have questions about what exactly President
• 59:35
  Speaker 10: Trump's intentions are with the FED, what would you point
• 59:38
  Speaker 10: to as the things they should be watching to determine
• 59:42
  Speaker 10: that the FED is still making decisions based on you know,
• 59:46
  Speaker 10: the economic outlook rather than political considerations.
• 59:50
  Speaker 12: Look, it's deeply in our culture to do to do
• 59:53
  Speaker 12: our work based on the incoming data and and never
• 59:57
  Speaker 12: consider anything else. That's just everybody who is at the
• 59:59
  Speaker 12: FED really feel strongly about that way. So you know,
• 1:00:04
  Speaker 12: you'll know it by the way we talk about what
• 1:00:05
  Speaker 12: we're doing, by by the speeches that people give, by
• 1:00:08
  Speaker 12: the decisions that we make, you'll know that we're just
• 1:00:10
  Speaker 12: still going to do that. That's all we do, and
• 1:00:13
  Speaker 12: we don't we don't frame these questions at all or
• 1:00:15
  Speaker 12: see them in terms.
• 1:00:17
  Speaker 8: Of political outcomes.
• 1:00:18
  Speaker 12: I think when you get to another part of Washington,
• 1:00:21
  Speaker 12: everything is seen through the lens of does it help
• 1:00:24
  Speaker 12: or hurt this political party, this politician. You know, that's
• 1:00:27
  Speaker 12: that's the framework, and I think people find it hard
• 1:00:29
  Speaker 12: to believe that that's just that is not at all
• 1:00:32
  Speaker 12: the way we think about things at the FED. We're
• 1:00:34
  Speaker 12: taking a longer perspective. We're trying to you know, serve
• 1:00:37
  Speaker 12: the American people as best we can. So I think
• 1:00:40
  Speaker 12: I think you'll you would be able to tell I don't.
• 1:00:42
  Speaker 12: I don't believe we'll ever get to that place. You know,
• 1:00:45
  Speaker 12: I would say, we're we're doing our work exactly as
• 1:00:48
  Speaker 12: we always have now, and people are they're making their
• 1:00:51
  Speaker 12: their arguments and and we're having really a great discussion
• 1:00:54
  Speaker 12: around these challenging issues.
• 1:00:56
  Speaker 10: So do you see the court case around Lisa Cook
• 1:01:00
  Speaker 10: as being related to questions that FED independence.
• 1:01:03
  Speaker 12: You know, I see it as a court case that
• 1:01:05
  Speaker 12: it would be inappropriate for me to comment on.
• 1:01:13
  Speaker 18: Thanks mister chairman, Edward Lawrence from Fox Business. So we
• 1:01:16
  Speaker 18: saw the preliminary benchmark revisions down nine hundred and eleven thousand.
• 1:01:21
  Speaker 18: The revisions for June were the first negative revisions we've
• 1:01:24
  Speaker 18: seen since December of twenty twenty. You know, how can
• 1:01:27
  Speaker 18: the FED base important decisions on rate and what to
• 1:01:30
  Speaker 18: do with the with the interest rates on data that
• 1:01:33
  Speaker 18: seems to be, as you've called it in the past, noise.
• 1:01:36
  Speaker 12: So on the QCW, the revision that we saw was
• 1:01:40
  Speaker 12: almost exactly what we expected.
• 1:01:42
  Speaker 8: It was amazing how close the expectation was so and.
• 1:01:45
  Speaker 12: The reason for that is for the last bunch of
• 1:01:49
  Speaker 12: quarters there's been almost a predictable overcount and I think,
• 1:01:55
  Speaker 12: you know, the Fear of Labor Statistics really does understand
• 1:01:58
  Speaker 12: this and they're working hard to fix it. Got to do,
• 1:02:01
  Speaker 12: of course, it has something to do with low response rates,
• 1:02:03
  Speaker 12: but it's also got to do with what's called the
• 1:02:05
  Speaker 12: birth death model. Because a good amount of job creation
• 1:02:08
  Speaker 12: happens around new companies and how many go out of business,
• 1:02:12
  Speaker 12: how many are founded, And it's just really hard. You
• 1:02:14
  Speaker 12: can't survey for that. You've got to have a model
• 1:02:16
  Speaker 12: that predicts that, and it's quite difficult to do, especially
• 1:02:19
  Speaker 12: when the economy is undergoing big changes. And they've been
• 1:02:22
  Speaker 12: working on that and are making progress on it. But
• 1:02:25
  Speaker 12: you know, the data we get is still well good
• 1:02:29
  Speaker 12: enough for us to do our work to the extent
• 1:02:32
  Speaker 12: we have issues around data right now. It's about low
• 1:02:35
  Speaker 12: response rates. That's happened all over all over. Really, response
• 1:02:40
  Speaker 12: rates are just lower to surveys now, both in and
• 1:02:42
  Speaker 12: out of the government. And it's no great secret. You know,
• 1:02:46
  Speaker 12: we want higher response rates and we need those to
• 1:02:48
  Speaker 12: have you know, less volatile data. And the way to
• 1:02:51
  Speaker 12: get that is to make sure that the agencies that
• 1:02:53
  Speaker 12: collect the data have sufficient resources to drive higher response rates.
• 1:02:58
  Speaker 12: It's not a complicated problem, but that's what it takes.
• 1:03:00
  Speaker 12: It's not a mystery.
• 1:03:02
  Speaker 8: That's what it takes.
• 1:03:03
  Speaker 12: The other thing I'll say, Edward is, in the case
• 1:03:06
  Speaker 12: of the job's job creation, the first the response rate
• 1:03:10
  Speaker 12: is quite low for the first month, or lower for
• 1:03:12
  Speaker 12: the first month. By the time you get to the
• 1:03:13
  Speaker 12: second or third month, you're still collecting responses for that
• 1:03:17
  Speaker 12: last month, for that prior month, and you get to
• 1:03:20
  Speaker 12: the place where the data are much more reliable by
• 1:03:22
  Speaker 12: the second and certainly the third month. So it's not
• 1:03:25
  Speaker 12: that we don't get the data, it's just that we.
• 1:03:26
  Speaker 8: Get it a little later.
• 1:03:29
  Speaker 18: If well, for the benchmarks, if that holds, it's fifty
• 1:03:32
  Speaker 18: one percent of the jobs that we thought were there
• 1:03:34
  Speaker 18: weren't really there. Shows a weaker market job market coming
• 1:03:37
  Speaker 18: into this year. If you had had that information, would
• 1:03:40
  Speaker 18: it have changed your mind related to where the interest
• 1:03:43
  Speaker 18: rates should be? Should there have been a cutter earlier?
• 1:03:45
  Speaker 12: You know, we have to live life looking through the
• 1:03:47
  Speaker 12: windshield rather than the rearview mirror, as you know. And
• 1:03:50
  Speaker 12: all I can tell you is we see where we
• 1:03:52
  Speaker 12: are now and we.
• 1:03:53
  Speaker 8: Take appropriate action.
• 1:03:54
  Speaker 12: We took that appropriate action today.
• 1:04:00
  Speaker 19: Thanks Howard Scheiner with Ruyters. So, as you mentioned a
• 1:04:05
  Speaker 19: minute ago, some margins of the job market would suggest
• 1:04:07
  Speaker 19: that the slide's already happening. A black unemployment right in
• 1:04:10
  Speaker 19: August was above seven percent, declining work week difficulty among
• 1:04:14
  Speaker 19: college graduates finding work, high rising youth unemployment. Why do
• 1:04:19
  Speaker 19: you think a quarter percentage point now is going to
• 1:04:22
  Speaker 19: arrest that.
• 1:04:24
  Speaker 8: Well, I hadn't say that.
• 1:04:26
  Speaker 12: I thought a quarter point would make a huge difference
• 1:04:28
  Speaker 12: to the economy. But you've got to look at the
• 1:04:29
  Speaker 12: whole path of rates, right, and markets has already been
• 1:04:34
  Speaker 12: baking in expectations. I mean, our market works through expectations, right.
• 1:04:39
  Speaker 12: So I think our policy path really does matter, and
• 1:04:42
  Speaker 12: I think it's important that we use our tools to
• 1:04:44
  Speaker 12: support the labor market when we do see signs like that.
• 1:04:46
  Speaker 8: I did mention that.
• 1:04:47
  Speaker 12: You know, you see minority unemployment going up, You see
• 1:04:52
  Speaker 12: younger people, people who are more vulnerable economically, more susceptible
• 1:04:56
  Speaker 12: to economic cycles. That's one of the reasons. In addition
• 1:04:59
  Speaker 12: to just overall all lower payroll job creation, that shows
• 1:05:03
  Speaker 12: you that at the margin, the labor market is weakening.
• 1:05:06
  Speaker 12: I would also point to labor force participation. Some part
• 1:05:09
  Speaker 12: of the significant decline in labor force participation over the
• 1:05:12
  Speaker 12: last year has probably been cyclical in nature rather than
• 1:05:16
  Speaker 12: just the usual aging process. So we put all this
• 1:05:19
  Speaker 12: together and we see that the labor market is softening,
• 1:05:22
  Speaker 12: and we don't need it to soften anymore, don't want
• 1:05:24
  Speaker 12: it to, so we use our tools, and you know,
• 1:05:27
  Speaker 12: we It starts with a twenty five basis point rate cut.
• 1:05:31
  Speaker 12: But you know, the market's also pricing in a rate path.
• 1:05:34
  Speaker 12: I'm not blessing what the market's doing at all. I'm
• 1:05:36
  Speaker 12: just saying it's not just one action.
• 1:05:41
  Speaker 19: As a follow up to that, the growth mix right
• 1:05:43
  Speaker 19: now seems very concentrated in an investment and on the
• 1:05:48
  Speaker 19: consumer spending side in the higher income groups. Do you
• 1:05:52
  Speaker 19: feel that that's an unsustainable mix for the economy moving forward.
• 1:05:59
  Speaker 8: I wouldn't say that.
• 1:05:59
  Speaker 12: I mean, you're right, those are two we're getting unusually
• 1:06:04
  Speaker 12: large amounts of economic activity through the AI build out
• 1:06:08
  Speaker 12: and corporate investment.
• 1:06:12
  Speaker 8: I don't know how long that will go on. No
• 1:06:13
  Speaker 8: one does.
• 1:06:14
  Speaker 12: In terms of spending, you saw the spend The consumer
• 1:06:17
  Speaker 12: spending numbers were well above expectations, and that may well
• 1:06:21
  Speaker 12: be skewed toward higher earning consumers. There's a lot of
• 1:06:25
  Speaker 12: anecdotal elevens to suggest that. Nonetheless, it's spending. So, I mean,
• 1:06:30
  Speaker 12: I think the economy is, you know, it's moving along.
• 1:06:35
  Speaker 12: Economic growth is going to be one and a half
• 1:06:37
  Speaker 12: in the one and a half percent or better this year,
• 1:06:39
  Speaker 12: maybe a little better. Forecasts have been coming up as
• 1:06:42
  Speaker 12: you can see, so labor market is unemployment is low,
• 1:06:48
  Speaker 12: but you know, down downside risks, but it's still still
• 1:06:51
  Speaker 12: a low unemployment rate.
• 1:06:53
  Speaker 8: So that's how we see it.
• 1:07:00
  Speaker 20: Hi Stephanie Rule, MSNBC. Treasury Secretary Scott Besson has said
• 1:07:05
  Speaker 20: that the Federal Reserve suffers from mission creep and institutional bloat.
• 1:07:10
  Speaker 20: He's now calling for an independent review. Would you support
• 1:07:13
  Speaker 20: an independent review or are you open to any sort
• 1:07:16
  Speaker 20: of reform in any areas of the FED? I.
• 1:07:20
  Speaker 12: Of course I'm not going to comment on anything the
• 1:07:22
  Speaker 12: Secretary says. There really any other officer says. So in
• 1:07:28
  Speaker 12: terms of reform at the FED, you know, we just
• 1:07:31
  Speaker 12: we just went through a lengthy and I think very
• 1:07:34
  Speaker 12: successful process of updating our monetary policy framework.
• 1:07:40
  Speaker 8: I would say there's a lot of work.
• 1:07:41
  Speaker 12: Going on behind the scenes around the assets we have
• 1:07:46
  Speaker 12: in the Federal Reserve banks, Federal Reserve system, and at
• 1:07:49
  Speaker 12: the Board.
• 1:07:51
  Speaker 8: Are they the right size.
• 1:07:52
  Speaker 12: We're actually going through a ten percent, ten percent head
• 1:07:56
  Speaker 12: count reduction through the whole FED, including the Board and
• 1:08:00
  Speaker 12: all the reserve banks. The employment employment at the FED
• 1:08:03
  Speaker 12: at the end of that will be basically at the
• 1:08:06
  Speaker 12: same level it was more than ten years ago, so
• 1:08:08
  Speaker 12: we will have had zero job growth for more than
• 1:08:11
  Speaker 12: a decade when we're finished with that, and I think
• 1:08:13
  Speaker 12: we'll probably we'll probably do more than that. So I
• 1:08:16
  Speaker 12: think we're certainly open to constructive criticism and ways to
• 1:08:20
  Speaker 12: do our jobs.
• 1:08:21
  Speaker 20: Better, not an independent review.
• 1:08:24
  Speaker 8: We're certainly open to you to always trying to do better.
• 1:08:32
  Speaker 21: Mister Chairman Neil Irwin with Axios, there's been some debate
• 1:08:35
  Speaker 21: lately on whether AI is already starting to affect the
• 1:08:38
  Speaker 21: labor market in terms of lower labor demand high productivity.
• 1:08:41
  Speaker 2: By contrast, do.
• 1:08:44
  Speaker 21: Buy that and if that is true, does that have
• 1:08:46
  Speaker 21: implications for the monetary policy setting.
• 1:08:49
  Speaker 12: So there's great uncertainty around that. I think my view,
• 1:08:53
  Speaker 12: which is also a bit of a guess but widely shared,
• 1:08:56
  Speaker 12: I think is that you are seeing some effects, but
• 1:08:57
  Speaker 12: it's not the not the main thing driving it, And
• 1:09:00
  Speaker 12: so particular focus on young people coming out of college
• 1:09:05
  Speaker 12: and yeah, there may be something there. It may be
• 1:09:07
  Speaker 12: that companies or other institutions that have been hiring younger
• 1:09:12
  Speaker 12: people right out of college are able to use AI
• 1:09:15
  Speaker 12: that more than they had in the past. That may
• 1:09:17
  Speaker 12: be part of the story. It's also part of the
• 1:09:20
  Speaker 12: story though, that you know, job creation more broadly has
• 1:09:23
  Speaker 12: slowed down, the economy has slowed down, and so it's
• 1:09:26
  Speaker 12: probably a number of things. But yeah, it's it's.
• 1:09:29
  Speaker 8: Probably a factor. Hard to say how big it is.
• 1:09:34
  Speaker 14: Yeah, thanks, mister chairman.
• 1:09:38
  Speaker 21: What evidence do you see tariffs showing up in inflation?
• 1:09:44
  Speaker 12: Well, if you can take goods just sort of the
• 1:09:46
  Speaker 12: broad goods category, and last year, goods inflation was negative.
• 1:09:53
  Speaker 12: If you go back twenty five years, that was the
• 1:09:55
  Speaker 12: typical thing, was that goods inflation was goods prices generally
• 1:10:00
  Speaker 12: went down, even adjusting for quality, so that was not
• 1:10:04
  Speaker 12: the case. During the pandemic. Of course, goods inflation went
• 1:10:06
  Speaker 12: very high, but we essentially returned to zero or slightly
• 1:10:10
  Speaker 12: negative inflation. Now, I think goods inflation over the course
• 1:10:14
  Speaker 12: of the past year is one point two percent, which
• 1:10:16
  Speaker 12: doesn't sound like a lot, but it's a big change.
• 1:10:18
  Speaker 12: So we think, I mean, analysts have different views, but
• 1:10:21
  Speaker 12: we think it's contributing, you know, point three or point
• 1:10:25
  Speaker 12: four or something like that to the current core PCEE
• 1:10:28
  Speaker 12: inflation reading, which is two point nine percent.
• 1:10:30
  Speaker 8: So it's contributing.
• 1:10:33
  Speaker 12: What's what seems to be happening is that you know,
• 1:10:36
  Speaker 12: the tariffs are not mostly not being paid by exporters
• 1:10:42
  Speaker 12: mostly being paid by really the companies that sit between
• 1:10:48
  Speaker 12: the exporter and the consumer. So if you if you
• 1:10:51
  Speaker 12: buy something and you sell sell it through retail, or
• 1:10:53
  Speaker 12: you use it to make a product, you're probably taking
• 1:10:57
  Speaker 12: those a lot of those costs on and not able
• 1:10:59
  Speaker 12: to pass it fully along to the consumer. Yet that's
• 1:11:02
  Speaker 12: a lot that appears to be what we're seeing all
• 1:11:05
  Speaker 12: of the all of those companies and entities in the middle.
• 1:11:08
  Speaker 12: They'll tell you that they have every intention of passing
• 1:11:10
  Speaker 12: that through in time, but they're not doing that now.
• 1:11:13
  Speaker 12: Consum to the consumer. The pass through has been been
• 1:11:16
  Speaker 12: pretty small. It's been slower and later, slower and smaller
• 1:11:20
  Speaker 12: than we thought. But the evidence is it's very clear
• 1:11:24
  Speaker 12: that there's some pass through.
• 1:11:27
  Speaker 13: I also wanted to ask if you could share with
• 1:11:30
  Speaker 13: us the conditions under which you might consider leaving the
• 1:11:33
  Speaker 13: FED in in in May.
• 1:11:36
  Speaker 12: I have nothing new on that for you today.
• 1:11:41
  Speaker 22: Arena Hi Ketterina Sarival with Bloomberg News. I just wanted
• 1:11:47
  Speaker 22: to follow up on, you know, one of your answers
• 1:11:51
  Speaker 22: just a couple of minutes ago. You know, we've often
• 1:11:54
  Speaker 22: heard you talk about how you and your colleagues, you know,
• 1:11:57
  Speaker 22: do not think about politics. This does not enter the room,
• 1:12:02
  Speaker 22: but one of your new colleagues does come from this world,
• 1:12:06
  Speaker 22: right where everything is seen through this framework of politics
• 1:12:10
  Speaker 22: and of what party is being helped, and and that
• 1:12:14
  Speaker 22: person is still employed by the White House. How how
• 1:12:18
  Speaker 22: can markets and the public interpret you know, some of
• 1:12:25
  Speaker 22: his speeches for example, and then some of you know,
• 1:12:28
  Speaker 22: the forecast that we see today. I mean, the median
• 1:12:31
  Speaker 22: for this year was moved because of the introduction of
• 1:12:35
  Speaker 22: his forecast. I'm talking about the number of ray cuts
• 1:12:39
  Speaker 22: seen this year. What do you you know, what do
• 1:12:41
  Speaker 22: you say to markets and the public that are trying
• 1:12:43
  Speaker 22: to interpret you know, what you guys are saying.
• 1:12:47
  Speaker 12: So there's twelve twelve vote, nineteen participants, of whom twelve vote,
• 1:12:52
  Speaker 12: as you know, on a rotating basis, so no one voter,
• 1:12:56
  Speaker 12: you know, can Really the only way for any voter
• 1:13:00
  Speaker 12: to really move things around is to be incredibly persuasive.
• 1:13:03
  Speaker 12: And the only way to do that in the context
• 1:13:06
  Speaker 12: in which we work is to make really strong arguments
• 1:13:10
  Speaker 12: based on the data. And you're one's understanding of the economy.
• 1:13:13
  Speaker 12: That's really all that matters, and that's how it's going
• 1:13:17
  Speaker 12: to work. And I think that is the way the
• 1:13:21
  Speaker 12: institution that's in the DNA of the institution.
• 1:13:24
  Speaker 8: That's not going to change.
• 1:13:25
  Speaker 22: And then I want to ask about a Gallup poll
• 1:13:27
  Speaker 22: that showed that Americans now have more confidence in the
• 1:13:31
  Speaker 22: President than the Federal Reserve when it comes to doing
• 1:13:34
  Speaker 22: what's right for the economy. Why do you think that
• 1:13:37
  Speaker 22: is and what's your response, what's your message the public.
• 1:13:40
  Speaker 12: Our response is we're going to do everything we can
• 1:13:43
  Speaker 12: to use our tools to achieve the goals that Congress
• 1:13:46
  Speaker 12: has given us, and we're not going to get distracted
• 1:13:48
  Speaker 12: by anything. So I think that's what we're going to do.
• 1:13:52
  Speaker 12: We're just going to keep doing our jobs.
• 1:14:00
  Speaker 23: Jones Financial Times. Given the range of views express prior
• 1:14:04
  Speaker 23: to the meeting, I think there was a lot less
• 1:14:07
  Speaker 23: descent today than a lot of people expected. It'd be
• 1:14:11
  Speaker 23: good to know just what you think the drivers were
• 1:14:13
  Speaker 23: of coming to their very strong consensus in the meeting.
• 1:14:16
  Speaker 23: And also on the flip side, to just explain why
• 1:14:20
  Speaker 23: the plots are really so scattered between you know, someone
• 1:14:24
  Speaker 23: even expecting rates to end up higher by the end
• 1:14:26
  Speaker 23: of the year to five cuts. I mean, what were
• 1:14:29
  Speaker 23: the kind of range of views you had about on
• 1:14:31
  Speaker 23: one side, why there was so much support for a
• 1:14:34
  Speaker 23: cut today, and on the flip side, why there's so
• 1:14:37
  Speaker 23: much divergence about what comes next.
• 1:14:39
  Speaker 12: So I think there's quite a wide react, of wide
• 1:14:43
  Speaker 12: assessment that the situation has changed with respect to the
• 1:14:47
  Speaker 12: labor market. Whereas we could still say, and did say
• 1:14:51
  Speaker 12: in July at the time of the July meeting, if
• 1:14:53
  Speaker 12: the labor market was in solid condition, and we could
• 1:14:56
  Speaker 12: point to one hundred and fifty thousand jobs per month
• 1:14:59
  Speaker 12: and many other things. I think that the new data
• 1:15:04
  Speaker 12: that we've had, and it's not just payrolls, it's it's
• 1:15:07
  Speaker 12: other things as well, suggests that there really is meaningful
• 1:15:11
  Speaker 12: downside risk. I said there was downside risk then, but
• 1:15:14
  Speaker 12: I think that that downside risk is now a reality
• 1:15:17
  Speaker 12: and there's clearly more downside risk. So I think that
• 1:15:20
  Speaker 12: was I think that's broadly accepted, and so that meant
• 1:15:24
  Speaker 12: different things for different people. Some, you know, some wrote
• 1:15:27
  Speaker 12: down almost everyone wrote down supported this cut, and some
• 1:15:32
  Speaker 12: supported more cuts, and some didn't, as you will see
• 1:15:35
  Speaker 12: from the dot plot.
• 1:15:36
  Speaker 8: So just the way, that's just the way it is.
• 1:15:37
  Speaker 12: I mean, people have it's you have people who take
• 1:15:41
  Speaker 12: this work very seriously think about it all the time
• 1:15:44
  Speaker 12: do their work, discuss it with our colleagues, you know,
• 1:15:47
  Speaker 12: we endlessly discuss this in between ourselves, and then we
• 1:15:52
  Speaker 12: have a meeting where and we put it all out
• 1:15:53
  Speaker 12: on the table, and this.
• 1:15:55
  Speaker 8: Is what you get.
• 1:15:55
  Speaker 12: And you're right, there is there's a range of views
• 1:15:58
  Speaker 12: in the dots, and and I think that's, like I said,
• 1:16:03
  Speaker 12: very unsurprising given the quite unusual, historically unusual nature of
• 1:16:09
  Speaker 12: the challenges that we face. Let's remember, though the unemployment
• 1:16:13
  Speaker 12: rates four point three percent, the economy is growing at
• 1:16:16
  Speaker 12: one and a half percent, so it's not a bad
• 1:16:20
  Speaker 12: economy or anything like that. We've seen much more challenging
• 1:16:23
  Speaker 12: economic times. But from a policy standpoint, the same point
• 1:16:26
  Speaker 12: of what we're trying to accomplish, it's challenging to know
• 1:16:30
  Speaker 12: what to do. There are, as I mentioned earlier, there
• 1:16:33
  Speaker 12: are no risk free paths. Now it's not incredibly obvious
• 1:16:37
  Speaker 12: what to do. So we have to keep our eye
• 1:16:41
  Speaker 12: on inflation. At the same time, we cannot ignore and
• 1:16:43
  Speaker 12: must keep our eye on maximum employment, which is those
• 1:16:47
  Speaker 12: are two equal goals, and you will see that they
• 1:16:50
  Speaker 12: are just there're a range of views on what to do. Nonetheless,
• 1:16:54
  Speaker 12: we came together today at the meeting and acted with
• 1:16:58
  Speaker 12: a high degree of unity.
• 1:17:05
  Speaker 24: Thank you, Archie Hawk and the economist. You mentioned earlier
• 1:17:08
  Speaker 24: that job creature was running below your guess at it's
• 1:17:11
  Speaker 24: break even rate. Here's two bit more about that, and
• 1:17:14
  Speaker 24: where you think the break heathen rate is.
• 1:17:16
  Speaker 12: You know, so there are many different ways to calculate it,
• 1:17:20
  Speaker 12: and none of them is perfect. But you know, it's
• 1:17:23
  Speaker 12: it's clearly come way down. You could you could say
• 1:17:27
  Speaker 12: it's somewhere between zero and fifty thousand, and you'd be
• 1:17:30
  Speaker 12: right or wrong. I mean, there's just many different ways
• 1:17:33
  Speaker 12: to do it. So whatever wherever it was one hundred
• 1:17:37
  Speaker 12: and fifty thousand, two hundred thousand a few months ago,
• 1:17:41
  Speaker 12: it's come down quite significantly. And that's because very a
• 1:17:45
  Speaker 12: very lower amount of people are joining the labor force.
• 1:17:48
  Speaker 12: The labor force really not growing much at this point,
• 1:17:51
  Speaker 12: and that's that's a lot of where the supply of
• 1:17:54
  Speaker 12: labor was coming from over the last two or three years,
• 1:17:57
  Speaker 12: so we're not getting that now. We're also we've got
• 1:17:59
  Speaker 12: much lower demand. You know, it's interesting that supply and
• 1:18:03
  Speaker 12: demand have really come down together so far, except now
• 1:18:07
  Speaker 12: we do have inflation, sorry, unemployment ticking up. Outside just
• 1:18:11
  Speaker 12: one tick outside of the range where it's been for
• 1:18:14
  Speaker 12: a year. Four point three percent is still a low level.
• 1:18:18
  Speaker 12: But you know, I think this level of this speedy
• 1:18:22
  Speaker 12: decline in both supply and demand has certainly gotten everyone's attention.
• 1:18:28
  Speaker 24: By may you mentioned the downside risk to employment a
• 1:18:30
  Speaker 24: fair amount, but it's striking that measures of kind of
• 1:18:33
  Speaker 24: activity and output for the third quarter, those that we
• 1:18:35
  Speaker 24: have seen pretty strong. The Atlanta FAD's GP now is
• 1:18:38
  Speaker 24: very strong. He mentionured strong PC numbers as well. How
• 1:18:42
  Speaker 24: do you square those things? Is there is there a
• 1:18:43
  Speaker 24: shance actually could be upside risk to the label market
• 1:18:45
  Speaker 24: if there's activity bashes all right.
• 1:18:46
  Speaker 12: Well that that would be great, that we'd love that
• 1:18:48
  Speaker 12: to happen. So I don't know that you see a
• 1:18:52
  Speaker 12: big tension there, but it's gratifying to see that that
• 1:18:55
  Speaker 12: economic activity is holding in and it's you know, so
• 1:18:57
  Speaker 12: it's it's a good but a good bit from consumption.
• 1:19:00
  Speaker 12: It looks like consumption was stronger than expected what we
• 1:19:04
  Speaker 12: got earlier this this week, I guess, and also we're
• 1:19:08
  Speaker 12: getting you know, a fairly narrow sector is producing a
• 1:19:13
  Speaker 12: lot of activity, which is the the AI build out.
• 1:19:16
  Speaker 8: And you know business investment, so.
• 1:19:20
  Speaker 12: You know, we watch all of it, and I would
• 1:19:22
  Speaker 12: say we you know, we we did move up the
• 1:19:25
  Speaker 12: media and for growth for this year, actually moved up
• 1:19:28
  Speaker 12: in the sep between the June and September uh SEPs
• 1:19:32
  Speaker 12: so and really the inflation and labor market didn't change much.
• 1:19:37
  Speaker 8: It's really the risks that we're.
• 1:19:38
  Speaker 12: Seeing to the labor market that that that were the
• 1:19:41
  Speaker 12: focus of today's decision.
• 1:19:46
  Speaker 25: Nicole Hi, Nicole good Kind with Barons, Thank you for
• 1:19:50
  Speaker 25: taking my question. Given the cumulative impact of high interest
• 1:19:54
  Speaker 25: rates on the housing sector, I'm wondering how concerned you
• 1:19:58
  Speaker 25: are that current rate levels are pascerbating housing affordability issues
• 1:20:01
  Speaker 25: and potentially hindering household formation and wealth accumulation for a
• 1:20:06
  Speaker 25: segment of the population.
• 1:20:09
  Speaker 12: You know, housing is an intrasensitive activity, so it's at
• 1:20:14
  Speaker 12: the very center of monetary policy. When the pandemic hit
• 1:20:20
  Speaker 12: and we cut rates to zero, the housing companies were
• 1:20:25
  Speaker 12: incredibly grateful, and it was really they said that was
• 1:20:27
  Speaker 12: the only thing that kept them going, was that we
• 1:20:29
  Speaker 12: cut so aggressively and provided credit and things like that,
• 1:20:32
  Speaker 12: and they were able to finance because because we did that.
• 1:20:35
  Speaker 12: The other side of that is when inflation gets high,
• 1:20:37
  Speaker 12: and we raise rates, and you're right, it does burden
• 1:20:40
  Speaker 12: the housing industry, and so rates have come down a bit.
• 1:20:45
  Speaker 12: And as that happens. We don't set the we don't
• 1:20:48
  Speaker 12: set mortgage rates, but our policy rate changes do tend
• 1:20:51
  Speaker 12: to affect mortgage rates, and that has been happening, and
• 1:20:55
  Speaker 12: that will of course raise demand.
• 1:20:58
  Speaker 8: Lower borrowing rates for for.
• 1:21:01
  Speaker 12: Builders will help you know, get builders, will help supply.
• 1:21:05
  Speaker 2: Uh.
• 1:21:05
  Speaker 8: And so some of that should happen.
• 1:21:07
  Speaker 12: I think most analysts think that we have to be
• 1:21:10
  Speaker 12: pretty big changes for it to matter a lot for
• 1:21:12
  Speaker 12: the big changes in rates for the for the to
• 1:21:14
  Speaker 12: matter a lot for the housing sector. And you know,
• 1:21:17
  Speaker 12: the other thing is by you know, by achieving maximum
• 1:21:19
  Speaker 12: employment and price stability. That's a strong economy, that's a
• 1:21:22
  Speaker 12: good economy for for housing. And then the last thing
• 1:21:26
  Speaker 12: I'll say is, uh, you know, there's a deeper problem here.
• 1:21:29
  Speaker 12: There's not a cyclical problem that the FED can address,
• 1:21:31
  Speaker 12: and that just is a pretty much nationwide housing shortage
• 1:21:35
  Speaker 12: or put a lot of places in the country just
• 1:21:37
  Speaker 12: don't have enough enough housing for people.
• 1:21:40
  Speaker 2: Uh.
• 1:21:41
  Speaker 12: And and you know, all of the areas around metropolitanarians
• 1:21:44
  Speaker 12: like Washington for example, are very built up and so
• 1:21:47
  Speaker 12: you're having to build farther and farther out and that
• 1:21:49
  Speaker 12: that So that's where it is.
• 1:21:52
  Speaker 25: And just a quick follow up, during the last SEP
• 1:21:55
  Speaker 25: or the press conference following the last SEP, you seem
• 1:21:58
  Speaker 25: to indicate that policymakers life conviction about there are projections,
• 1:22:02
  Speaker 25: and I'm wondering if you still feel that way.
• 1:22:06
  Speaker 12: You know, forecasts, Forecasting is very difficult, even in placid times,
• 1:22:11
  Speaker 12: and as I've mentioned before, forecasters are a humble lot
• 1:22:15
  Speaker 12: with much to be humble about. So I think right
• 1:22:19
  Speaker 12: now is a particularly challenging time, even more uncertain than usual.
• 1:22:23
  Speaker 12: And so I don't know any forecaster anywhere. Really Ask
• 1:22:28
  Speaker 12: any of the forecasters whether they have great confidence in
• 1:22:31
  Speaker 12: their forecast right now, I think they'll honestly say no.
• 1:22:39
  Speaker 15: Thank you.
• 1:22:39
  Speaker 4: Chair Pal Jennifer schawan Berger with Yahoo Finance. If you're
• 1:22:42
  Speaker 4: cutting rates, why continue to reduce the size of your
• 1:22:46
  Speaker 4: balance sheet than pause the unwinding.
• 1:22:50
  Speaker 12: Well, I think we're you know, we're cutting the size
• 1:22:54
  Speaker 12: of our balance sheet quite marginally now. As you know,
• 1:22:56
  Speaker 12: with the balance sheet, we're still in an abundant reserves condition,
• 1:23:02
  Speaker 12: and we've said that we would stop somewhat above a
• 1:23:08
  Speaker 12: somewhat above an ample reserves levels. That's what we are
• 1:23:12
  Speaker 12: and we're you know, we're getting closer to that. We're
• 1:23:13
  Speaker 12: monitoring it very carefully. We don't think that that has
• 1:23:16
  Speaker 12: at all significant macroeconomic effects. These are pretty small numbers
• 1:23:21
  Speaker 12: moving around inside a giant economy. You know that the
• 1:23:24
  Speaker 12: number that the level of runoff is not very large,
• 1:23:27
  Speaker 12: So I wouldn't attribute macroeconomic consequences to that at this point.
• 1:23:31
  Speaker 4: And at his recent confirmation hearing, Stephen Myron brought up
• 1:23:34
  Speaker 4: that the FED actually has three mandates from Congress, not
• 1:23:38
  Speaker 4: just jobs and stable crisis, but also moderate long term
• 1:23:41
  Speaker 4: interest rates.
• 1:23:42
  Speaker 1: So what does.
• 1:23:43
  Speaker 4: Congress mean by moderate long term interest rates? How should
• 1:23:46
  Speaker 4: we understand that when we see the ten year treasury moving?
• 1:23:50
  Speaker 4: And how do you think about this part of the
• 1:23:52
  Speaker 4: mandate when policy choices like right cuts or balance sheet
• 1:23:55
  Speaker 4: reductions affect the long end of.
• 1:23:56
  Speaker 10: The yield curve.
• 1:23:59
  Speaker 12: So we always think of it as the dual mandate
• 1:24:03
  Speaker 12: maximum employment and price stability for a long time, because
• 1:24:06
  Speaker 12: we think moderate long term interest rates are something that
• 1:24:09
  Speaker 12: will result from stable inflation low and stable inflation and
• 1:24:15
  Speaker 12: maximum employment. So we don't we don't, haven't we haven't
• 1:24:18
  Speaker 12: thought about that as for a very long time as
• 1:24:22
  Speaker 12: a third mandate that requires independent action.
• 1:24:25
  Speaker 8: So that's where that is.
• 1:24:27
  Speaker 12: And there's no there's no thought of as far as
• 1:24:30
  Speaker 12: I'm concerned, there's no thought of considering that, you know,
• 1:24:35
  Speaker 12: considering that we somehow incorporate that in as something in
• 1:24:38
  Speaker 12: a different way.
• 1:24:44
  Speaker 8: Thanks Chapello. Matt Egan from CNN.
• 1:24:47
  Speaker 26: We recently learned that average FICO credit scores are down
• 1:24:52
  Speaker 26: this year by two points, the most since two thousand
• 1:24:54
  Speaker 26: and nine during the Great Recession, and delinquencies are high
• 1:24:57
  Speaker 26: for car loans, personal loans, credit cards. How concerned, if
• 1:25:01
  Speaker 26: at all, are you about the health of consumer finances
• 1:25:04
  Speaker 26: and do you expect today's cut will help?
• 1:25:08
  Speaker 8: So, you know, we're aware of that.
• 1:25:11
  Speaker 12: I think this default rates have been kind of ticking up,
• 1:25:14
  Speaker 12: and we do watch that they're not at a level
• 1:25:17
  Speaker 12: I don't believe they're at a level or overall they're
• 1:25:20
  Speaker 12: they're you know, terribly concerning, but it is something that
• 1:25:23
  Speaker 12: we watch. You know, lower rates should support economic activity.
• 1:25:27
  Speaker 12: I don't know that one rate cut will have you know,
• 1:25:29
  Speaker 12: a visible effect on that, but over time, you know,
• 1:25:31
  Speaker 12: a strong economy with a strong labor.
• 1:25:33
  Speaker 8: Market is what we're what we're aiming for.
• 1:25:36
  Speaker 12: And stable and stable prices, so that should help.
• 1:25:41
  Speaker 26: This rate cut is coming at a time when the
• 1:25:43
  Speaker 26: stock market is at or near all time highs and
• 1:25:47
  Speaker 26: some valuation metrics are elevated historically, is there a risk
• 1:25:52
  Speaker 26: of cutting rates could overheat financial markets, potentially fueling a bubble?
• 1:25:58
  Speaker 12: You know, we we're tightly folksocused on our goals, right,
• 1:26:01
  Speaker 12: and our goals are maximum employment and price stability, and
• 1:26:05
  Speaker 12: so we take the actions that we take it with
• 1:26:09
  Speaker 12: an eye on those goals separately, and that's what we
• 1:26:13
  Speaker 12: why we did what we did today.
• 1:26:14
  Speaker 8: Separately.
• 1:26:14
  Speaker 12: We monitor financial stability very very carefully. And you know,
• 1:26:18
  Speaker 12: I would say it's a it's a mixed picture, but
• 1:26:21
  Speaker 12: households are in good shape, Banks are in good shape. Overall,
• 1:26:24
  Speaker 12: households are still in good shape in the aggregate. And
• 1:26:28
  Speaker 12: I know that people to lower into the income spectrum
• 1:26:30
  Speaker 12: are under pressure obviously, But from a financial stability perspective,
• 1:26:34
  Speaker 12: we monitor that picture. We don't have a view that
• 1:26:37
  Speaker 12: there's a right or wrong level of asset prices for
• 1:26:40
  Speaker 12: any particular financial asset, but we monitor the whole picture
• 1:26:45
  Speaker 12: really looking for structural vulnerabilities. And I would say those
• 1:26:49
  Speaker 12: are not elevated right now?
• 1:26:53
  Speaker 2: Gene do you fee the last question.
• 1:26:57
  Speaker 27: I share Perrell Gene Young with M and I Market News.
• 1:27:00
  Speaker 27: I wanted to ask about inflation expectations. You've said the
• 1:27:05
  Speaker 27: FED can't take the stability of inflation expectations for granted.
• 1:27:09
  Speaker 27: You mentioned at the short run they've gone up a
• 1:27:11
  Speaker 27: little bit. I wonder if you can talk a bit
• 1:27:13
  Speaker 27: about that, and then also at the long run, wondering
• 1:27:17
  Speaker 27: do you see evidence that the debate over FED independence
• 1:27:21
  Speaker 27: and the growing deficit is putting pressure on inflation expectations.
• 1:27:26
  Speaker 12: So as as you said, shorter term inflation expectations have
• 1:27:31
  Speaker 12: tended to respond to near term inflation, so if inflation
• 1:27:34
  Speaker 12: goes up, inflation expectations will predict that it takes just
• 1:27:38
  Speaker 12: a little while to get back down. Fortunately, throughout this period,
• 1:27:43
  Speaker 12: longer term inflation expectations both both break even in the markets,
• 1:27:46
  Speaker 12: and almost all of the longer term surveys Michigan being
• 1:27:50
  Speaker 12: a bit of an outlier lately, have have have been
• 1:27:53
  Speaker 12: just rock solid in terms of, you know, running at
• 1:27:58
  Speaker 12: levels that are consistent with two percent inflation over time.
• 1:28:00
  Speaker 12: So we don't take that for granted. We we actually
• 1:28:03
  Speaker 12: assume that our actions have a real effect on that,
• 1:28:07
  Speaker 12: and that you know we need to you know, continually
• 1:28:10
  Speaker 12: show and also mentioned discuss our commitment to two percent inflation,
• 1:28:16
  Speaker 12: and so you'll hear us doing that. It's but you
• 1:28:20
  Speaker 12: know that we're as I mentioned, it's a difficult situation
• 1:28:23
  Speaker 12: because we have we have risks that are both affecting
• 1:28:26
  Speaker 12: the labor market and inflation. Those are two goals, and
• 1:28:30
  Speaker 12: so we have to balance those two. When they're both
• 1:28:32
  Speaker 12: at risk, we have to balance them and that's really
• 1:28:34
  Speaker 12: what we're trying to do. I don't inter your latter
• 1:28:37
  Speaker 12: part of your question was about independence, you know, I don't.
• 1:28:41
  Speaker 12: I don't see market participants.
• 1:28:44
  Speaker 8: I don't see it.
• 1:28:45
  Speaker 12: That's something they're factoring in right now in terms of
• 1:28:47
  Speaker 12: setting interest rates.
• 1:28:50
  Speaker 8: Thanks very much.
• 1:28:58
  Speaker 2: All right, guys, So it's not happening here. Getting somebody
• 1:29:01
  Speaker 2: out there.
• 1:29:01
  Speaker 1: Okay, So we'll break this down for you in detail
• 1:29:06
  Speaker 1: on coming shows, but just some reports in case you
• 1:29:08
  Speaker 1: came in late. It's a quarter basis point cut right now.
• 1:29:13
  Speaker 1: The likelihood is that there is some pressure from current
• 1:29:16
  Speaker 1: Fed governors that we could see more ray cuts coming.
• 1:29:21
  Speaker 2: Of course, Powell was very I feel like it was
• 1:29:22
  Speaker 2: a little bit.
• 1:29:23
  Speaker 1: More dubbish or hawkish, I should say around whether or
• 1:29:27
  Speaker 1: not we're going to get the ray cuts this year.
• 1:29:28
  Speaker 2: But the big key is is they are.
• 1:29:30
  Speaker 1: Facing a big, big issue right now between both inflation
• 1:29:33
  Speaker 1: and jobs. We've been saying this all along. He's in
• 1:29:35
  Speaker 1: a rock and a hard place. I don't know that
• 1:29:37
  Speaker 1: he gets out of this. The other thing I think
• 1:29:38
  Speaker 1: that plays into this right now is more pressure from Trump,
• 1:29:42
  Speaker 1: whether or not Trump will go at him as hard
• 1:29:45
  Speaker 1: or if he feels like, okay, we got a quarter
• 1:29:47
  Speaker 1: basis points. We're on our way to getting corrected. As
• 1:29:50
  Speaker 1: Powell goes into the end of his term, which is
• 1:29:53
  Speaker 1: in May of next year.
• 1:29:54
  Speaker 2: So this is going to break.
• 1:29:56
  Speaker 1: Down, I think into a lot of situations on the charts.
• 1:30:00
  Speaker 1: I guess is that we are going to and I
• 1:30:01
  Speaker 1: shouldn't say guess where I feel that the market is
• 1:30:03
  Speaker 1: going to be heading is is most likely in a
• 1:30:06
  Speaker 1: bullish position right now. If you look at the four
• 1:30:08
  Speaker 1: hour on almost everything, I'll just go to XRP going
• 1:30:12
  Speaker 1: sideways on the four B and B is on a breakout,
• 1:30:15
  Speaker 1: Solana is on a breakout.
• 1:30:17
  Speaker 2: Let's say if Cardono's on a little.
• 1:30:19
  Speaker 1: Bit of a breakout, Sui was on a move right there,
• 1:30:21
  Speaker 1: so you can see some of the market is not
• 1:30:24
  Speaker 1: necessarily looking at this as a bad thing. So I
• 1:30:27
  Speaker 1: think the real question is how much pressure does the
• 1:30:30
  Speaker 1: rest of the Fed governors put on Powell to go
• 1:30:33
  Speaker 1: ahead for an additional rate cut in the upcoming meetings.
• 1:30:36
  Speaker 1: My guess is we will see more rising inflation that's
• 1:30:40
  Speaker 1: going to make it hard, and we're going to see
• 1:30:42
  Speaker 1: even worse job numbers that will probably offset it going forward.
• 1:30:47
  Speaker 1: So there is a lot to unpack here. The good
• 1:30:50
  Speaker 1: thing is is markets did not crash, markets did not boom.
• 1:30:55
  Speaker 1: That tells me that investors are a little bit more
• 1:30:59
  Speaker 1: numb to it in our I'm probably waiting to see
• 1:31:01
  Speaker 1: how this plays out. Remember, we have Clarity Act coming
• 1:31:03
  Speaker 1: through this fall, more regulation. We also have I think
• 1:31:08
  Speaker 1: a lot playing around international and global macro scenarios that.
• 1:31:14
  Speaker 2: Will continue to push in this direction.
• 1:31:15
  Speaker 1: And this is the first move by the United States
• 1:31:19
  Speaker 1: in reference to a rate cut since last year. So
• 1:31:24
  Speaker 1: very very good I think, at least direction going forward.
• 1:31:29
  Speaker 1: But again I feel like the Fed is and was late.
• 1:31:31
  Speaker 1: They're trying to correct. Whether or not they can catch
• 1:31:34
  Speaker 1: up is the real critical point. And when you look
• 1:31:37
  Speaker 1: about it right now. I think the scenario right now
• 1:31:41
  Speaker 1: bullish at sixty one sixty two percent. When you look
• 1:31:44
  Speaker 1: at it right now, the real question mark is how
• 1:31:48
  Speaker 1: to businesses respond. So I'm going to be watching retail
• 1:31:51
  Speaker 1: sales like a hawk going into the fall, because that
• 1:31:54
  Speaker 1: will give.
• 1:31:54
  Speaker 2: Us a little bit of indicator.
• 1:31:55
  Speaker 1: Credit is already in a basically shambles, and I'm talking
• 1:31:58
  Speaker 1: about retail credit that is a problem going into the
• 1:32:02
  Speaker 1: kind of scenario we're facing right now because it could
• 1:32:05
  Speaker 1: stimulate recession concerns. And this goes back to my whole
• 1:32:09
  Speaker 1: theory on hals versus the halves. So this market is different.
• 1:32:13
  Speaker 1: It feels very unique in the way of these cycles. Granted,
• 1:32:17
  Speaker 1: there are cycles that could push us into movement around
• 1:32:21
  Speaker 1: the end of the year, and I think towards the
• 1:32:22
  Speaker 1: end of the year that is when we are going
• 1:32:25
  Speaker 1: to have to make some very hard decisions on what
• 1:32:27
  Speaker 1: you're holding in your portfolios and how you're going to
• 1:32:30
  Speaker 1: manage whether you're going to stay in it for the
• 1:32:34
  Speaker 1: long term or you're going to start to dollar cost
• 1:32:37
  Speaker 1: average out of portfolios and into more other assets and diversify.
• 1:32:42
  Speaker 2: All of that will break down for you. We're going
• 1:32:43
  Speaker 2: to get to all of that for you guys this week.
• 1:32:45
  Speaker 1: We've got a lot coming in in terms of additional interviews,
• 1:32:49
  Speaker 1: will of course be doing these additional lives when we
• 1:32:51
  Speaker 1: do these big FMC If you like these, if you
• 1:32:54
  Speaker 1: like the live streams, just let me know in the comments.
• 1:32:57
  Speaker 2: That's all you have to do, and make.
• 1:32:58
  Speaker 1: Sure and hit like on the video if you do
• 1:33:00
  Speaker 1: like the livestream, that's the bare minimum. Last thing is
• 1:33:04
  Speaker 1: that right now. If you're not subscribed, get in on
• 1:33:06
  Speaker 1: the Diamond Circle. That is my private group that I
• 1:33:10
  Speaker 1: send out an.
• 1:33:11
  Speaker 2: Email to each week. It's called the Baron Market Edge.
• 1:33:13
  Speaker 1: And basically I break down a lot of what's happening
• 1:33:16
  Speaker 1: in the market, also play a little bit of where
• 1:33:17
  Speaker 1: I'm going in the markets in general.
• 1:33:20
  Speaker 2: So get in. It's absolutely free.
• 1:33:22
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• 1:33:24
  Speaker 1: me out there on X at Paul Baron. We'll catch
• 1:33:27
  Speaker 1: you next time right here on The Paul Baron Show.