Latest / The Paul Barron Crypto Show / Fed Meeting Rate Cut📈Jerome Powell

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Fed Meeting Rate Cut📈Jerome Powell · The Paul Barron Crypto Show

• 0:00
  Speaker 1: We are going to be covering, of course, the FOMC
• 0:02
  Speaker 1: meeting with Shair Pale. He'll do a whole run up.
• 0:05
  Speaker 1: Welcome back into the show. If you have not subscribed
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  Speaker 1: so very easy to do, all right, let's get into
• 0:59
  Speaker 1: it today. We will be going live with Chare Pal here.
• 1:03
  Speaker 1: Around two thirty is when he sometimes he comes in
• 1:05
  Speaker 1: a littlety, but around two thirty we'll get into it.
• 1:08
  Speaker 1: And the way it works is he comes out and
• 1:12
  Speaker 1: we'll get the notification here in a minute on whether
• 1:15
  Speaker 1: we get a rate cut or not.
• 1:18
  Speaker 2: Yeah, is it in? Okay? So we got all right?
• 1:21
  Speaker 1: So anticipated the twenty five basis points are in on
• 1:25
  Speaker 1: the rate cut. So we know that what happens after
• 1:28
  Speaker 1: this Board of Governors meets is the final addressing to
• 1:35
  Speaker 1: the reporter gaggle. Now, the reporter gaggle is where we
• 1:39
  Speaker 1: get a lot of Q and A from Chair Pal. Now,
• 1:41
  Speaker 1: this is typically where he starts to reveal the forward
• 1:45
  Speaker 1: looking statements, the potential for quantitative easing, and maybe even
• 1:50
  Speaker 1: what could be occurring in the next FOMC meeting, which
• 1:54
  Speaker 1: is in December. So now we've got two quarter point
• 1:58
  Speaker 1: basis point cuts this year. The anticipation, of course, is
• 2:02
  Speaker 1: that three, and it most likely will be the case.
• 2:04
  Speaker 1: The real question is, now, with all these jobs numbers
• 2:07
  Speaker 1: that are playing into this, could this shift his narrative.
• 2:11
  Speaker 1: So Nestley plus seven more companies have announced massive job
• 2:15
  Speaker 1: cuts just in the last ten months, and this gets
• 2:19
  Speaker 1: into a whole slew. Nestley is a big company in
• 2:22
  Speaker 1: the AG space and in the large food space, both
• 2:26
  Speaker 1: on retail and also on the food service sector, so
• 2:29
  Speaker 1: that really starts to get into a big cut if
• 2:32
  Speaker 1: we're starting to see layoffs in this area. Sixteen thousand,
• 2:35
  Speaker 1: and I can't imagine that this company is in a
• 2:38
  Speaker 1: position where they can start to integrate AI. I think
• 2:42
  Speaker 1: this is because they themselves are in a little bit
• 2:44
  Speaker 1: more of a struggle within that. You had Amazon coming
• 2:48
  Speaker 1: in fifteen percent of their job roles in departments including
• 2:51
  Speaker 1: human resources, tech team, consumer business, among others. That's fourteen
• 2:57
  Speaker 1: thousand I think it was fourteen thousand jobs.
• 2:59
  Speaker 2: Google is coming up on.
• 3:00
  Speaker 1: They laid off some of their early roles, and then
• 3:04
  Speaker 1: Accenture also laying off another eleven thousand. I mean, these
• 3:07
  Speaker 1: numbers are crazy. Four thousand coming in from Salesforce, Microsoft
• 3:11
  Speaker 1: even coming in at two thousand, and this is a
• 3:14
  Speaker 1: fifteen thousand employees, and then around two thousand more staff
• 3:17
  Speaker 1: that were under performers, so seventeen thousand basically that are out.
• 3:21
  Speaker 1: So this gets into a real effect on the economy.
• 3:25
  Speaker 1: And this is what I think the FED has to
• 3:28
  Speaker 1: be concerned with more so than anything, is to.
• 3:32
  Speaker 2: Lose the grasp on jobs.
• 3:34
  Speaker 1: They have two mandates, of course, and one of course
• 3:37
  Speaker 1: is understanding inflation and maintaining it. The other is making
• 3:41
  Speaker 1: sure that the job narrative stays positive in the United States,
• 3:45
  Speaker 1: because if we get into both rising inflation and the
• 3:48
  Speaker 1: loss of jobs, we have stagflation going.
• 3:51
  Speaker 2: Forward to all of that.
• 3:52
  Speaker 1: If you look at trueflation over here, it's holding it
• 3:55
  Speaker 1: about two point four to four percent. Notice this right here,
• 3:58
  Speaker 1: guysnment data blackout twenty eight days, thirteen hours and fifty
• 4:04
  Speaker 1: seven minutes and counting. Look at the Challenger job cut
• 4:08
  Speaker 1: data down thirty seven percent, US government domestic product down
• 4:14
  Speaker 1: twenty eight percent, and then new residential home sales starting
• 4:17
  Speaker 1: to climb up. So maybe there's something brewing here. When
• 4:21
  Speaker 1: you look at trueflation, if you look at the indexes themselves,
• 4:24
  Speaker 1: just to give you a quick view, the stabilization around
• 4:28
  Speaker 1: two to two and a half is there. However, if
• 4:32
  Speaker 1: you go to this dip right here, which was August third,
• 4:35
  Speaker 1: that was the lowest we had seen here at least
• 4:37
  Speaker 1: in the recent months, at one point sixty one percent.
• 4:41
  Speaker 1: It has been climbing since then. So this is the
• 4:43
  Speaker 1: concern that the FED has. Do we have a control
• 4:47
  Speaker 1: on inflation?
• 4:48
  Speaker 3: Now?
• 4:48
  Speaker 2: One thing that you have to remember with the FED is.
• 4:51
  Speaker 1: That they have reposited their idea of where inflation neutral is.
• 4:57
  Speaker 1: In the past, it's always been two percent the FED,
• 5:00
  Speaker 1: and even share Pal said this in the last FED meeting,
• 5:03
  Speaker 1: which was huge, and that is that we could be
• 5:07
  Speaker 1: recommending a three percent or closer to a three percent inflation.
• 5:11
  Speaker 1: That would be absolutely destructive for the American economy, I believe,
• 5:16
  Speaker 1: because that does start to raise prices across the board
• 5:19
  Speaker 1: on almost every asset and everything out there. As I said,
• 5:23
  Speaker 1: if you just joined, make sure and hit the like
• 5:25
  Speaker 1: button on this video and subscribe to the show. We
• 5:28
  Speaker 1: will be doing a live airing of the FOMC Press conference. That,
• 5:33
  Speaker 1: of course, is where Chair Pale will address his forward
• 5:36
  Speaker 1: looking statements how we look into the next FOMC. I
• 5:40
  Speaker 1: think more importantly is how he's looking at both the
• 5:43
  Speaker 1: situation with President Trump and Gigiping. We have some stuff
• 5:48
  Speaker 1: on that and whether or not we're gonna get a
• 5:50
  Speaker 1: trade deal. But the bigger part, I think is how
• 5:53
  Speaker 1: stable is the job market and will they be able
• 5:56
  Speaker 1: to get it under control, because if we do see
• 5:58
  Speaker 1: more of this playing in and then we got a
• 6:00
  Speaker 1: problem ahead of us. So I put this out the
• 6:03
  Speaker 1: twenty five basis coin almost certain that's now happened. If
• 6:07
  Speaker 1: you didn't hear FED has already announced a point qure
• 6:10
  Speaker 1: point basis cut on this the second one of the year.
• 6:15
  Speaker 1: And now, even though I still think we're extremely high
• 6:18
  Speaker 1: on overall interest rates, rates dropping to three point seventy
• 6:21
  Speaker 1: five to the four range on the medium range and
• 6:23
  Speaker 1: then more liquidity could be Bitcoin getting a little bit
• 6:27
  Speaker 1: of flight here, But there's some problems and I've kind
• 6:30
  Speaker 1: of you know, referred to those.
• 6:32
  Speaker 2: Labor market is.
• 6:33
  Speaker 1: A big one, and I think this is maybe bigger
• 6:36
  Speaker 1: than we think because all this data is still hidden
• 6:39
  Speaker 1: because of this shutdown. So just remember inflation still about
• 6:42
  Speaker 1: two percent, and then sell the news volatility could happen
• 6:45
  Speaker 1: all of this. One hidden indicator from Powell could change
• 6:48
  Speaker 1: everything for crypto. And the hidden indicator could be the
• 6:52
  Speaker 1: labor market. And also what could be coming in from
• 6:56
  Speaker 1: what I think is going to be GDP, and I
• 6:59
  Speaker 1: think that is factor that we got to look forward
• 7:01
  Speaker 1: to in terms of data coming back in. Here was
• 7:05
  Speaker 1: a poll we put out today over on x By
• 7:08
  Speaker 1: the way, if you're not following us on the network account,
• 7:11
  Speaker 1: it's Paul baron TV and you can kind.
• 7:14
  Speaker 2: Of see it right there.
• 7:14
  Speaker 1: But the poll is the bigger bull catalyst for today's
• 7:18
  Speaker 1: FMC meeting are priced end quarter. Nobody was going there
• 7:22
  Speaker 1: only twenty seven. I agree everybody anticipated end of QT.
• 7:27
  Speaker 1: This is the anticipation that would be very bullish for
• 7:30
  Speaker 1: the market in general. Now it's negative in the sense
• 7:33
  Speaker 1: that we've lost control of possibly jobs, but for quantitative
• 7:37
  Speaker 1: tightening to end, this would be a huge step in
• 7:41
  Speaker 1: the right direction. So good stuff going in that. We
• 7:44
  Speaker 1: will get into the live stream here shortly. We're going
• 7:47
  Speaker 1: to be taking some questions today as well. If we
• 7:50
  Speaker 1: get a chance before the live stream, I'll take a
• 7:51
  Speaker 1: few of those. If the guys have it open, we'll
• 7:55
  Speaker 1: make sure that it's available and we'll if you have
• 7:58
  Speaker 1: some questions, we'll try to get to the as we can,
• 8:00
  Speaker 1: so drop them down in the side. A couple of
• 8:03
  Speaker 1: points I want to hit on right here. If you
• 8:06
  Speaker 1: guys remember bitcoin dropped six to eight percent. This is
• 8:09
  Speaker 1: on the last three FOMC meetings, and it made a
• 8:11
  Speaker 1: new all time high before the next FMC, so we
• 8:14
  Speaker 1: could see a retlacement and then December could be the
• 8:18
  Speaker 1: blow off top. Many people look at this fourth quarter.
• 8:20
  Speaker 1: If you agree with some analyst out there still looking
• 8:24
  Speaker 1: at that four year cycle, they say, this.
• 8:26
  Speaker 2: Is the quarter that all this happens. In that quarter.
• 8:29
  Speaker 1: We are right there in the middle of it as
• 8:32
  Speaker 1: we record this at the end of October. If you're
• 8:34
  Speaker 1: catching this in early twenty twenty six thinking about what's
• 8:36
  Speaker 1: going on in the crypto markets, other things that you
• 8:39
  Speaker 1: got to consider is how does the situation play out
• 8:43
  Speaker 1: with China. You got Trump, of course, in Jijipang meeting.
• 8:48
  Speaker 1: This was a statement that came out with the President
• 8:51
  Speaker 1: saying satisfactory, very satisfactory. Now I'm not sure what that means.
• 8:56
  Speaker 1: Trump is a interesting deal maker. He kind of throws
• 9:01
  Speaker 1: things out there and almost manifest certain things, and then
• 9:06
  Speaker 1: you get reaction from the markets. Then you also get
• 9:09
  Speaker 1: reaction from the people he's negotiating with. Now, what was
• 9:12
  Speaker 1: interesting to me was this that Gigiping.
• 9:16
  Speaker 2: I love that. I love these guys.
• 9:19
  Speaker 1: These memes are just I mean, come on, we got
• 9:21
  Speaker 1: to show that that's just too good. China purchases one
• 9:26
  Speaker 1: hundred and eighty thousand tons of US soybeans in their
• 9:29
  Speaker 1: first order in months. So this is showing a good
• 9:33
  Speaker 1: faith move ahead of tomorrow's meeting between Trump and President g.
• 9:38
  Speaker 1: Isn't a master stroke by g to try to get
• 9:40
  Speaker 1: his way or.
• 9:44
  Speaker 2: Does he know something?
• 9:45
  Speaker 1: Does Ggping know something and say, hey, I feel like
• 9:48
  Speaker 1: we might have an angle here. There could be some
• 9:51
  Speaker 1: things here that really start to bring us to neutral
• 9:55
  Speaker 1: against the United States and maybe we can start to
• 9:58
  Speaker 1: work together.
• 9:58
  Speaker 2: With the United States.
• 9:59
  Speaker 1: If Ping is thinking that way, I guarantee you Trump
• 10:02
  Speaker 1: is ready to make a deal. And if that happens,
• 10:05
  Speaker 1: this will be a global monumentous move because it is
• 10:09
  Speaker 1: going to put pressure on DC to get the government
• 10:12
  Speaker 1: back open. It's going to put pressure on capital market,
• 10:15
  Speaker 1: it's going to put pressure on investors, and best of all,
• 10:19
  Speaker 1: it's going to put pressure on some of these bad
• 10:21
  Speaker 1: deals that are out there that will get restructured here
• 10:25
  Speaker 1: around the United States, which means that Trump's going to
• 10:28
  Speaker 1: have kind of a new angle for negotiation. If he
• 10:32
  Speaker 1: pulls this off with China, that will be one of
• 10:34
  Speaker 1: the biggest deals he's done yet. Doesn't mean that he will,
• 10:37
  Speaker 1: but it means that we could see it the SNP
• 10:41
  Speaker 1: five hundred close hired today. This broke sixty nine hundred
• 10:43
  Speaker 1: first time in history. Guys, we are watching history. Three
• 10:47
  Speaker 1: hundred and ninety eight components in the SNP close red.
• 10:50
  Speaker 2: Though.
• 10:50
  Speaker 1: This is a problem because now you're talking about eighty
• 10:53
  Speaker 1: percent of the S and P five hundred companies close red.
• 10:59
  Speaker 1: Yet the end is still going up. So it only
• 11:03
  Speaker 1: tells you one thing, and that is big tech is everything.
• 11:06
  Speaker 1: We've got breaking news, I think. All right, so we've
• 11:10
  Speaker 1: got an announcement from the Fed that tightening is over.
• 11:16
  Speaker 2: Okay, we can end the show now, all.
• 11:19
  Speaker 1: Right, December one, we are going to get easing into
• 11:23
  Speaker 1: a FED balance sheet that is quite different than it
• 11:28
  Speaker 1: looked quite some time ago. Remember that was around nine
• 11:30
  Speaker 1: trillion had backed off to around six point six. If
• 11:33
  Speaker 1: we get another two point two off of that, easing
• 11:36
  Speaker 1: will start to loosen up, and you know what that means,
• 11:38
  Speaker 1: guys money into the market, and this.
• 11:41
  Speaker 4: Will be huge for the markets.
• 11:44
  Speaker 1: I'm just going to go to the chart real quick
• 11:46
  Speaker 1: just to see how bitcoin and the markets are responding
• 11:50
  Speaker 1: to that announcement, because it may not even be.
• 11:52
  Speaker 2: Out there just yet. We're on the day.
• 11:54
  Speaker 1: Let me drop into the into the ten minute. We'll
• 11:58
  Speaker 1: go to the ten minute, fifteen minute right there, all right,
• 12:02
  Speaker 1: so not much movement right now. Bitcoin starting to retrace
• 12:04
  Speaker 1: around one to eleven. I think this is a bullish
• 12:07
  Speaker 1: move guy, So we may see how he represents this well.
• 12:11
  Speaker 1: I'm sure he's going to address it heavily in the
• 12:14
  Speaker 1: press conference, so stick around for that. This could get
• 12:17
  Speaker 1: huge around some of the statements that he's talking about.
• 12:20
  Speaker 1: If you look at ethereum right now up a little
• 12:23
  Speaker 1: wildly on this move so interesting there could we see
• 12:26
  Speaker 1: bitcoin dominance starting to move? Let me look at dominance
• 12:29
  Speaker 1: real quick, still ticking down over the last twenty four hours. Yeah,
• 12:35
  Speaker 1: last twenty four hours. We're here on the fifteen minute
• 12:38
  Speaker 1: on bitcoin dominance slipping under fifty nine percent. I think
• 12:42
  Speaker 1: this deal needs to jump back down to round fifty
• 12:45
  Speaker 1: four for us to see some movement into some of
• 12:47
  Speaker 1: these all coins and the rotation. Salana gets a nice
• 12:51
  Speaker 1: little pump here on some of the news. Going back
• 12:54
  Speaker 1: to one ninety six. Let's take a look further in
• 12:58
  Speaker 1: XRP goes up slightly on the news, it appears, and
• 13:02
  Speaker 1: then of course Eth going in there.
• 13:04
  Speaker 2: Doze, Let's see what's going on in Yeah.
• 13:07
  Speaker 1: Yeah, so Marcus seems to respond slightly good for it,
• 13:10
  Speaker 1: at least in the last thirty minutes or so. Let's
• 13:13
  Speaker 1: get into some other things, because I think the notice
• 13:16
  Speaker 1: that we've got to look at around what to prepare
• 13:19
  Speaker 1: for in the markets are really going to boil down
• 13:21
  Speaker 1: to a few points. And not only are we looking
• 13:24
  Speaker 1: at the situation with the S and P with trade,
• 13:28
  Speaker 1: but also what we're going to be dealing with is
• 13:30
  Speaker 1: how does the economy play into this.
• 13:33
  Speaker 5: Now.
• 13:33
  Speaker 1: I want to go to a clip, because this is
• 13:35
  Speaker 1: a strange economy right now. You've got the haves and
• 13:38
  Speaker 1: the have nots. And I think you guys know what
• 13:40
  Speaker 1: I'm talking about. When we have an all time high
• 13:42
  Speaker 1: on gold, you've got all time highs in the stock market,
• 13:45
  Speaker 1: you've got bitcoin well over one hundred k ethereum flirting
• 13:49
  Speaker 1: with four k. I mean, times are good for an investor,
• 13:53
  Speaker 1: times are good for an asset owner.
• 13:56
  Speaker 2: But take a look at this clip.
• 13:59
  Speaker 6: First of all, it's a strange economy right now. We're
• 14:01
  Speaker 6: talking about that GDP is quite strong, with the labor
• 14:05
  Speaker 6: market is soft, and we're waiting to see how that
• 14:08
  Speaker 6: will evolve. But the soft labor market is what's getting
• 14:11
  Speaker 6: the FED to cut and just history shows when the
• 14:13
  Speaker 6: FED is easing and the economy is holding up and
• 14:16
  Speaker 6: earnings are strong, that's some of the best returns that
• 14:19
  Speaker 6: you get inequities. And so I think it's kind of
• 14:22
  Speaker 6: keep it simple. This is a good environment for stocks.
• 14:25
  Speaker 7: Evan.
• 14:25
  Speaker 8: When does the unemployed what level does the unemployment rate
• 14:28
  Speaker 8: become a problematic for the markets? Forget about the FED
• 14:31
  Speaker 8: because they're focused on it.
• 14:32
  Speaker 6: Yeah, I don't know that it's a particular level the speed, right,
• 14:36
  Speaker 6: and you know, we still have a pretty low overall
• 14:39
  Speaker 6: level of unemployment four point three percent, we think, because
• 14:42
  Speaker 6: we're not getting the data at this point. But if
• 14:46
  Speaker 6: we start seeing the speed pick up, if we start
• 14:48
  Speaker 6: seeing initial job as claims spike and we are at
• 14:51
  Speaker 6: least getting the state level data there and it doesn't
• 14:53
  Speaker 6: look too concerning, then I think we're in okay shape.
• 14:57
  Speaker 9: Evan.
• 14:57
  Speaker 10: Today was a day when in terms of acid allocation,
• 15:00
  Speaker 10: and you know, you had equal way to do nothing,
• 15:01
  Speaker 10: in fact, be down. Most of the S and P
• 15:03
  Speaker 10: was down today, and.
• 15:04
  Speaker 3: So we're out of place.
• 15:05
  Speaker 10: Just kind of curious how you're kind of advising across
• 15:08
  Speaker 10: this this you know, this big umbrella that you see
• 15:10
  Speaker 10: and that you have to advise into. Is it to
• 15:13
  Speaker 10: lean heavier into the stuff that's working.
• 15:15
  Speaker 6: I think for the most part, we're leaning into to
• 15:17
  Speaker 6: what's working. I mean, I think there are some sectors
• 15:20
  Speaker 6: that where you're seeing the earnings and are not being
• 15:22
  Speaker 6: rewarded to the same extent, Like financials. We're overweight there,
• 15:26
  Speaker 6: and we think we're going to get going again. But
• 15:28
  Speaker 6: with the momentum that we're seeing in tech, I don't
• 15:31
  Speaker 6: think you want to.
• 15:32
  Speaker 1: Fight that, all right, So a couple of things to
• 15:35
  Speaker 1: compare their momentum in tech. He's talking about a five
• 15:39
  Speaker 1: trillion dollar in Nvidia. We're talking about those eight companies
• 15:42
  Speaker 1: kind of you know, wagging the dog right now when
• 15:45
  Speaker 1: it comes to the market. And then you have to
• 15:47
  Speaker 1: look at crypto. I think the underserved market right now
• 15:51
  Speaker 1: is risk risk assets, and you guys know that. Just
• 15:55
  Speaker 1: as a reminder, and I think this is the factor
• 15:57
  Speaker 1: that they're looking at going forward. Here, just as a reminder,
• 16:00
  Speaker 1: quantitative tightening right there ends on December first. This is
• 16:06
  Speaker 1: the first time we've seen this in some time. Man,
• 16:08
  Speaker 1: this will be an unbelievable news cycle over the next
• 16:11
  Speaker 1: few days. You guys want to stick around for this
• 16:13
  Speaker 1: because this could have major impetus on the market and
• 16:17
  Speaker 1: how it starts to play out. A lot of factors
• 16:19
  Speaker 1: that we'll get into this, especially around macroro economics, both
• 16:24
  Speaker 1: on a global perspective, but also even with other countries.
• 16:27
  Speaker 1: So you could see the American dollar might actually end
• 16:30
  Speaker 1: up pushing further down on this. So that gets into
• 16:33
  Speaker 1: the Dixie layout, which goes into risk assets. You guys
• 16:36
  Speaker 1: understand that, then of course you're talking about even precious
• 16:39
  Speaker 1: metals that we'll play into this goal. Most likely we'll
• 16:41
  Speaker 1: probably see it rise as well. If you're brand new
• 16:44
  Speaker 1: to the live stream today, we have two good news
• 16:47
  Speaker 1: pieces for you. One is a quarter basis point another
• 16:51
  Speaker 1: cut that's our second cut for the year. Expect another
• 16:54
  Speaker 1: one coming in December. I think the real question is
• 16:57
  Speaker 1: how much do we get the fifty base point. We'll
• 17:00
  Speaker 1: go to the poly market in a minute to take
• 17:02
  Speaker 1: a look at that. And then of course the other
• 17:04
  Speaker 1: news I just announced if you just joined, is quantitative
• 17:07
  Speaker 1: tightening is over.
• 17:09
  Speaker 4: That is the big news.
• 17:10
  Speaker 1: I think we probably need to make a T shirt
• 17:12
  Speaker 1: on that one. Let's go over to another clip real quick.
• 17:16
  Speaker 1: This is CNBC's talking about the market being divided.
• 17:21
  Speaker 2: Take a look.
• 17:22
  Speaker 8: I think you look at this in many ways is
• 17:25
  Speaker 8: things are going well, but we're in this many.
• 17:28
  Speaker 3: People called this K shaped economy.
• 17:30
  Speaker 8: Right, we've got one leg going up.
• 17:33
  Speaker 3: When has that not been true?
• 17:34
  Speaker 8: That hot there's the high end consumer in the low
• 17:36
  Speaker 8: wage in case it's always been true.
• 17:38
  Speaker 3: I just thine worse.
• 17:39
  Speaker 8: I just think it's bigger and more divided today than
• 17:42
  Speaker 8: it has been in a very long time. Between people
• 17:46
  Speaker 8: that are doing well and have enormous amount of disposable
• 17:49
  Speaker 8: income and are willing to spend money no matter what's
• 17:52
  Speaker 8: going on in the economy, and then there's those as
• 17:55
  Speaker 8: Becky and you were just talking about, those that literally
• 17:57
  Speaker 8: work for the government today who are probably standing in
• 18:00
  Speaker 8: line potentially food banks to be able to put food
• 18:02
  Speaker 8: on their tables. The the dichotomy between the two of
• 18:06
  Speaker 8: those is as wise as has ever been. As you
• 18:09
  Speaker 8: point out, you know, if you look at overall corporate earnings,
• 18:11
  Speaker 8: they continue to be very strong. But when you look
• 18:15
  Speaker 8: at how corporates are getting there, it's also interesting. You know,
• 18:18
  Speaker 8: we've seen probably more layoffs in this round of corporate
• 18:22
  Speaker 8: earnings than we've seen in a long period of time.
• 18:25
  Speaker 1: Okay, so you can hear the narrative here, and I
• 18:29
  Speaker 1: know that many of you probably are out there thinking,
• 18:31
  Speaker 1: we've got people out there in food lines. Now, we've
• 18:35
  Speaker 1: got people out there that are losing their jobs. What
• 18:37
  Speaker 1: I'm going to say is this is that when you
• 18:40
  Speaker 1: look at the market the way it is, and I
• 18:43
  Speaker 1: think this is going to be something that we're going
• 18:45
  Speaker 1: to see more of quickly because of the acceleration into
• 18:48
  Speaker 1: this job loss, It's going to get worse.
• 18:51
  Speaker 2: Guys we are talking about.
• 18:53
  Speaker 1: I think the gig economy needs to do a complete
• 18:57
  Speaker 1: flip into building a digital asset economy. And what do
• 19:01
  Speaker 1: I mean by that, hear me out is think of
• 19:04
  Speaker 1: crypto as a business, all right, just like you're if
• 19:06
  Speaker 1: you're an uber driver or you're a gig worker, think
• 19:08
  Speaker 1: of it as a business. Just start dropping small amounts
• 19:11
  Speaker 1: into the top ten assets out there, easy enough. Even
• 19:15
  Speaker 1: if you want to look at some of the things
• 19:16
  Speaker 1: that are happening in the S and P. Investing in
• 19:19
  Speaker 1: assets is the only way you beat this system. It's
• 19:23
  Speaker 1: the only way you're not going to beat it by
• 19:25
  Speaker 1: earning money. Earning money is the segue into getting into
• 19:29
  Speaker 1: digital assets or other assets. That you can start to
• 19:32
  Speaker 1: beat and that's when you don't have the problem of
• 19:35
  Speaker 1: dealing with job loss, you don't have the problem of
• 19:37
  Speaker 1: dealing with you know, food lines, all those kind of things,
• 19:40
  Speaker 1: because it doesn't make sense for an American in today's
• 19:43
  Speaker 1: world to be dealing with this, especially with the available
• 19:47
  Speaker 1: information and the tools at are disposable. I don't get
• 19:51
  Speaker 1: why we're going in that direction. And from what I hear,
• 19:54
  Speaker 1: you know, we do a webinar and a seminar every
• 19:57
  Speaker 1: couple of weeks. It's getting younger and younger in terms
• 20:01
  Speaker 1: of the business owners that I'm talking to, and they're
• 20:04
  Speaker 1: all saying the same thing. We are going to go
• 20:07
  Speaker 1: around the US dollar. We're going to start looking at
• 20:10
  Speaker 1: assets and building businesses and going into assets, and that
• 20:14
  Speaker 1: could be everything from gold, real estate, and obviously digital assets, bitcoin, ethereum, Salona, XRP,
• 20:19
  Speaker 1: you name it. Everybody's looking at that as the hedge
• 20:23
  Speaker 1: for beating out the system. And it's the only way
• 20:25
  Speaker 1: it works, guys. It's the only way it works because
• 20:27
  Speaker 1: what's happening right now. Actually, before we go to that,
• 20:30
  Speaker 1: I want to go to the poll. Before we go
• 20:31
  Speaker 1: into short sellers, we'll get into that. Let's go over
• 20:34
  Speaker 1: to the pole. How all October crypto market end ooh
• 20:39
  Speaker 1: split pole we have We've got a rally at forty neutral,
• 20:44
  Speaker 1: I'm going to give neutral and I have no clue
• 20:47
  Speaker 1: in the middle, and then a final crash seventeen percent.
• 20:50
  Speaker 1: So it looks like the rally guys are trying to
• 20:52
  Speaker 1: win this one. With almost five thousand votes coming in,
• 20:55
  Speaker 1: lots of good questions coming in. Thank you for those guys.
• 20:59
  Speaker 1: We'll try to get to handful of those before we
• 21:01
  Speaker 1: get rolling. As I said, if you're not subscribed to
• 21:03
  Speaker 1: the channel, make sure and do that if you're brand
• 21:05
  Speaker 1: new to the live stream. Right now, we will be
• 21:07
  Speaker 1: airing chair Pal's announcement at two thirty. In nine minutes,
• 21:12
  Speaker 1: we will be going to chair Pal. He will give
• 21:15
  Speaker 1: us the reasons why he gave us a quarter basis point.
• 21:18
  Speaker 1: He will give us the reasons of why he is
• 21:20
  Speaker 1: going into quantitative easoning, and he will give the reason
• 21:24
  Speaker 1: why the economy is in deep shit, hopefully, because I
• 21:29
  Speaker 1: think that's where we are right now. And if you
• 21:31
  Speaker 1: look at this right here, this is interesting because it
• 21:33
  Speaker 1: gets into the trading mentality of what's happening out there.
• 21:36
  Speaker 1: Short sellers are on track for their worst YearIn is
• 21:39
  Speaker 1: twenty twenty, and they're blaming retail investors for acting irrationally.
• 21:44
  Speaker 1: They're acting irrationally. You guys are acting irrationally out there.
• 21:47
  Speaker 1: You're actually taking advantage of the market because finally you
• 21:52
  Speaker 1: get to beat the man. And that's the beautiful thing
• 21:54
  Speaker 1: about crypto is you get to beat the man. And
• 21:56
  Speaker 1: I totally agree with that. Sometimes I think I'm a
• 21:59
  Speaker 1: literarian because I am all for the people who beat
• 22:04
  Speaker 1: the man. In Vidia, of course officially the first five
• 22:07
  Speaker 1: trillion dollar company. I know that's the rich getting richer,
• 22:11
  Speaker 1: but this may put more pressure on the economy than anything.
• 22:16
  Speaker 1: And what I mean by that is when you have
• 22:18
  Speaker 1: a company that is leading the S and P five
• 22:20
  Speaker 1: hundred at the scale in which in Vidia is leading it,
• 22:24
  Speaker 1: which is unheralded before this. Only this narrative only points
• 22:29
  Speaker 1: in one direction, and that is a direction, and I
• 22:32
  Speaker 1: think it's already starting to play out in the early
• 22:34
  Speaker 1: times of where I showed you guys in the first
• 22:36
  Speaker 1: of the show is these job losses. This narrative I
• 22:39
  Speaker 1: think plays out much greater in these jobs losses that
• 22:42
  Speaker 1: are coming twenty twenty six, could be a very bloody
• 22:44
  Speaker 1: year for jobs and possibly a bloody year for earnings
• 22:49
  Speaker 1: on a lot of companies that are going to be
• 22:51
  Speaker 1: looking for answers because retail may not necessarily come back
• 22:54
  Speaker 1: into that. The only way again to beat this is
• 22:58
  Speaker 1: to get into digital assets, any kind of asset that
• 23:01
  Speaker 1: can go up versus the value of your dollar going down.
• 23:05
  Speaker 1: That's the problem that we're dealing with right now, and
• 23:07
  Speaker 1: with AI all being played into almost every walk of life,
• 23:12
  Speaker 1: and it's accelerating, guys, it's accelerating so fast that you
• 23:16
  Speaker 1: need to pay attention to what's happening out there. I
• 23:18
  Speaker 1: don't know if you caught our X four O two
• 23:21
  Speaker 1: video this week. It's the big Red Thumb on our
• 23:24
  Speaker 1: YouTube channel.
• 23:25
  Speaker 2: Go back and watch that.
• 23:26
  Speaker 1: We had the Coinbase team, one of the three developers
• 23:29
  Speaker 1: that basically took a technology that was created during the
• 23:35
  Speaker 1: era in which I was an engineer at Microsoft nineteen
• 23:39
  Speaker 1: ninety six, and it was a technology that was built
• 23:42
  Speaker 1: on the infrastructure of HCTP and the very backbone of
• 23:46
  Speaker 1: the Internet that is now going to create payment architecture
• 23:51
  Speaker 1: for agentic payment infrastructure. I want you to think about
• 23:55
  Speaker 1: that for a second.
• 23:56
  Speaker 2: Go watch that video.
• 23:57
  Speaker 1: Because it's good you'll understand what I'm talking about in
• 23:59
  Speaker 1: terms of where this is going and why this really
• 24:02
  Speaker 1: shifts a lot of narratives going forward. Speaking of my
• 24:06
  Speaker 1: old boss, mister Bill Gates, he said that the commitment
• 24:11
  Speaker 1: phase of the AI revolution is here.
• 24:15
  Speaker 2: Take a look.
• 24:16
  Speaker 11: You look at all the investments that are being made
• 24:18
  Speaker 11: today by some of the big tech companies. Some companies
• 24:21
  Speaker 11: we're not making money on AI yet, but are making
• 24:23
  Speaker 11: massive commitments to chip makers and data centers, and say,
• 24:27
  Speaker 11: this math makes sense.
• 24:30
  Speaker 12: The AI is the biggest technical things ever in my lifetime.
• 24:37
  Speaker 12: I mean, it is so profound and therefore its influence
• 24:41
  Speaker 12: is hard to overstate. And the economic value this is
• 24:44
  Speaker 12: basically intelligence. You know where you can get medical advice,
• 24:49
  Speaker 12: so you can get a tutor, or you can get
• 24:50
  Speaker 12: somebody to help you to sign drugs. So the value
• 24:54
  Speaker 12: is extremely high, just like creating the Internet ended up
• 24:58
  Speaker 12: being int very, very valuable. But you have a frenzy
• 25:03
  Speaker 12: and you know some of these companies will be glad
• 25:07
  Speaker 12: they spent all this money. Some of them, you know,
• 25:09
  Speaker 12: they'll commit to data centers whose electricities is too expensive.
• 25:13
  Speaker 12: You know that it could be done overseas or they'll
• 25:16
  Speaker 12: buy a generation of chips and you know they won't
• 25:19
  Speaker 12: have captured all their value before the next one comes along.
• 25:26
  Speaker 2: All right, So Gates is on it.
• 25:27
  Speaker 1: I mean, you know, listen, the old dog still has
• 25:30
  Speaker 1: a few tricks. I think he understands the impact that's
• 25:33
  Speaker 1: going to play out here, and I think, you know,
• 25:35
  Speaker 1: he missed I don't know if you guys know this story,
• 25:38
  Speaker 1: but Gates missed the Internet. He was our CEO at
• 25:41
  Speaker 1: the time at Microsoft, and we were in a position
• 25:44
  Speaker 1: where we were controlling the market. The Internet came along.
• 25:48
  Speaker 1: Netscape was pretty much kicking our you know what. We
• 25:51
  Speaker 1: came in and played dirty Pool, put Explorer into everything,
• 25:55
  Speaker 1: and you know, the rest is history. But the point
• 25:57
  Speaker 1: being is is that Microsoft was not on the front
• 25:59
  Speaker 1: line of the Internet. And I think a lot of
• 26:02
  Speaker 1: companies are going to be looking at AI the same way.
• 26:05
  Speaker 1: They don't want to be caught with their you know,
• 26:07
  Speaker 1: shorts down in the sense of they weren't ready. And
• 26:10
  Speaker 1: that's I think going to affect a lot more companies
• 26:12
  Speaker 1: than just tech companies. This is going to affect companies
• 26:15
  Speaker 1: like we just showed there in the beginning of the show,
• 26:17
  Speaker 1: Nasty Amazon, you know, Target all these different retail integrations
• 26:22
  Speaker 1: that are going to play into this. The gig economy,
• 26:24
  Speaker 1: I think is going to eventually be cannibalized dramatically. Obviously
• 26:29
  Speaker 1: we'll see that playing out. I think with self driving
• 26:31
  Speaker 1: that will probably attack Uber in a big way, but
• 26:34
  Speaker 1: it's also going to attack the gig work economy. And
• 26:37
  Speaker 1: that again goes back to my whole thesis is investing
• 26:40
  Speaker 1: is the only that's your new gig job. Guys, that's
• 26:42
  Speaker 1: your crypto is a business. You should treat it that
• 26:45
  Speaker 1: way and look at it that way. Do the research,
• 26:48
  Speaker 1: get out there like a side hustle, and get going.
• 26:50
  Speaker 1: Bitcoin ping ponging price action could happen. The question is
• 26:55
  Speaker 1: whether or not this will wrap up around one last
• 26:58
  Speaker 1: key piece on the and that is US versus China.
• 27:03
  Speaker 1: So when you look at the gambit that is being
• 27:07
  Speaker 1: played right now, which is being played right now, this
• 27:11
  Speaker 1: could be one of the biggest chess moves that really
• 27:13
  Speaker 1: do put the United States in a good position, possibly
• 27:17
  Speaker 1: into a parody. I won't say that the China is
• 27:20
  Speaker 1: at a parody, but when you look at the global economy,
• 27:23
  Speaker 1: these two are the titans that I think are going
• 27:27
  Speaker 1: to either one control and you have to look at China.
• 27:29
  Speaker 2: China has gone the route of.
• 27:30
  Speaker 4: Gold, possibly as a reserve.
• 27:33
  Speaker 1: The US is going the route of stable coins, possibly
• 27:36
  Speaker 1: as a reserve against the treasuries. When you compare that
• 27:40
  Speaker 1: in the two global economies, this is where everything starts
• 27:44
  Speaker 1: to come together, and that's why digital assets will continue.
• 27:46
  Speaker 2: To be a big factor here.
• 27:48
  Speaker 1: Bitcoin, of course, will lead the way thirteen percent, rising
• 27:53
  Speaker 1: thirteen percent since its historic liquidation event, which was, as
• 27:56
  Speaker 1: we all know, some nefarious situations there, but that would
• 28:00
  Speaker 1: happened October tenth. Charts now indicate that the day that
• 28:03
  Speaker 1: closes above one sixteen are needed to lock this bull
• 28:06
  Speaker 1: reversal in. And I want to know, do you, guys
• 28:09
  Speaker 1: think we are in a bull reversal or do you
• 28:11
  Speaker 1: think bitcoin dominance could have topped out here? That is
• 28:15
  Speaker 1: the real question, because this could mean a rotation into
• 28:17
  Speaker 1: all coins. I know everybody's saying that the elusive all
• 28:20
  Speaker 1: coin season. Is it going to happen?
• 28:22
  Speaker 2: Paul? Is it going to happen? I get that out
• 28:24
  Speaker 2: there so much.
• 28:26
  Speaker 1: I think the question is how does the narrative come
• 28:29
  Speaker 1: in from Wall Street?
• 28:30
  Speaker 2: Because that's the narrative.
• 28:31
  Speaker 1: Unfortunately, guys that we're playing with and you got to
• 28:34
  Speaker 1: watch the things that are happening on Wall Street. One
• 28:36
  Speaker 1: of them is Nate Garossi kind of hitting on it
• 28:39
  Speaker 1: right here. Bitwise's spot ETF for Salona post the highest
• 28:43
  Speaker 1: one day trading of eight hundred and fifty ETF launches
• 28:47
  Speaker 1: this year, So who could have saw that coming? So
• 28:50
  Speaker 1: there you go, And we still have spot XRP ETFs
• 28:53
  Speaker 1: that will likely see a similar reception, if not greater,
• 28:57
  Speaker 1: according to Garassi.
• 28:58
  Speaker 2: So what is I tell you guys?
• 29:00
  Speaker 1: If you have that kind of appetite for alt coins
• 29:04
  Speaker 1: and secondary ascid and when I set a secondary ascid's
• 29:06
  Speaker 1: outside of Bitcoin, outside of ethereum, you've got XRP, Solana
• 29:11
  Speaker 1: and really just a handful of others. And that's what
• 29:14
  Speaker 1: we're dealing with right now. And congrats to a lot
• 29:17
  Speaker 1: of the ETFs like coin went live this week, Hadera
• 29:20
  Speaker 1: went live, So hbar community. I know you guys are
• 29:22
  Speaker 1: out there, a lot of good things. We will get
• 29:25
  Speaker 1: to some questions. Looks like they're starting to queue up
• 29:29
  Speaker 1: for chair Pal as he gets into this. Well, let's
• 29:33
  Speaker 1: not leave ethereum out of the conversation today, because bitmine
• 29:37
  Speaker 1: and the eath tarted have decided to go back in
• 29:41
  Speaker 1: and buy more.
• 29:42
  Speaker 4: Here is chair pal, Let's go to the to the lot.
• 29:47
  Speaker 3: Good afternoon.
• 29:50
  Speaker 13: My colleagues and I remain squarely focused on our achieving
• 29:53
  Speaker 13: our dual mandate goals of maximum employment and stable prices
• 29:57
  Speaker 13: for the benefit of the American people. Although some important
• 30:01
  Speaker 13: federal government data have been delayed due to the shutdown,
• 30:04
  Speaker 13: the public and private sector data that have remained available
• 30:07
  Speaker 13: suggests that the outlook for employment and inflation has not
• 30:11
  Speaker 13: changed much since our meeting in September. Conditions in the
• 30:15
  Speaker 13: labor market appeared to be gradually cooling, and inflation remains
• 30:19
  Speaker 13: somewhat elevated. In support of our goals and in light
• 30:23
  Speaker 13: of the balance of risks to employment and inflation, today
• 30:26
  Speaker 13: the Federal Open Market Committee decided to lower our policy
• 30:30
  Speaker 13: interest rate by a quarter percentage point. We also decided
• 30:34
  Speaker 13: to conclude the reduction of our aggregate securities holdings. As
• 30:37
  Speaker 13: of December one. I will have more to say about
• 30:40
  Speaker 13: monetary policy. After briefly reviewing economic developments. Available indicators suggest
• 30:47
  Speaker 13: that economic activity has been expanding at a moderate pace.
• 30:50
  Speaker 13: A GDP rose at a one point six percent pace
• 30:53
  Speaker 13: in the first half of the year, down from two
• 30:56
  Speaker 13: point four percent last year. Data available prior to the
• 31:00
  Speaker 13: shutdown show that growth and economic activity may be on
• 31:03
  Speaker 13: a somewhat firmer trajectory than expected, primarily reflecting stronger consumer spending.
• 31:10
  Speaker 13: Business investment in equipment and intangibles has continued to expand,
• 31:14
  Speaker 13: while activity in the housing sector remains weak. The shutdown
• 31:19
  Speaker 13: of the federal government will weigh on economic activity while
• 31:21
  Speaker 13: it persists, but these effects should reverse after the shutdown ends.
• 31:28
  Speaker 13: In the labour market, the unemployment rate remained relatively low
• 31:31
  Speaker 13: through August. Job gains have slowed significantly since early or
• 31:36
  Speaker 13: in the year. A good part of the slowing likely
• 31:38
  Speaker 13: reflects a decline in the growth of the labor force
• 31:41
  Speaker 13: due to lower immigration and labour force participation, though labor
• 31:46
  Speaker 13: demand has clearly softened as well. Although official employment data
• 31:50
  Speaker 13: for September are delayed, available evidence suggests that both layoffs
• 31:55
  Speaker 13: and hiring remain low, and that both households perceptions of
• 31:58
  Speaker 13: job availability and firm's perceptions of hiring difficulty continue to
• 32:03
  Speaker 13: decline in this less dynamic and somewhat softer labor market.
• 32:08
  Speaker 13: The downside risks to employment appear to have risen in
• 32:11
  Speaker 13: recent months. Inflation has eased significantly from its highs in
• 32:16
  Speaker 13: mid twenty twenty two, but remains somewhat elevated relative to
• 32:20
  Speaker 13: our two percent longer run goal. Estimates based on the
• 32:24
  Speaker 13: Consumer Price Index suggest that total PCE prices rose two
• 32:28
  Speaker 13: point eight percent over the twelve months ending in September,
• 32:31
  Speaker 13: and that excluding the volatile food and energy categories, core
• 32:36
  Speaker 13: PCE prices rose two point eight percent as well. These
• 32:40
  Speaker 13: readings are higher than earlier in the year, as inflation
• 32:43
  Speaker 13: for goods has picked up. In contrast, disinflation appears to
• 32:48
  Speaker 13: be continuing for services. Near term measures of inflation expectations
• 32:52
  Speaker 13: have moved up on balance over the course of this
• 32:54
  Speaker 13: year on news about tariffs, as reflected in both market
• 32:57
  Speaker 13: and survey based measures. Beyond the next year or two
• 33:02
  Speaker 13: or so, however, most measures of longer term expectations remain
• 33:06
  Speaker 13: consistent with our two percent inflation goal. Our monetary policy
• 33:12
  Speaker 13: actions are guided by our dual mandate to promote maximum
• 33:15
  Speaker 13: employment and stable prices for the American people. At today's meeting,
• 33:20
  Speaker 13: the Committee decided to lower the target range for the
• 33:22
  Speaker 13: federal funds rate by a quarter percentage point to three
• 33:26
  Speaker 13: and three quarters to four percent. Higher tariffs are pushing
• 33:31
  Speaker 13: up prices in some categories of goods, resulting in higher
• 33:34
  Speaker 13: overall inflation. A reasonable base case is that the effects
• 33:38
  Speaker 13: on inflation will be relatively short lived a one time
• 33:42
  Speaker 13: shift in the.
• 33:42
  Speaker 3: Price level, but it.
• 33:44
  Speaker 13: Is also possible that the inflationary effects could instead be
• 33:48
  Speaker 13: more persistent, and that is a risk to be assessed
• 33:51
  Speaker 13: and managed. Our obligation is to ensure that a one
• 33:54
  Speaker 13: time increase in the price level does not become an
• 33:57
  Speaker 13: ongoing inflation problem. In the near term, risks to inflation
• 34:02
  Speaker 13: are tilted to the upside and risks to employment to
• 34:05
  Speaker 13: the downside, a challenging situation. There is no risk free
• 34:10
  Speaker 13: path for policy as we navigate this tension between our
• 34:13
  Speaker 13: employment and inflation goals. Our framework calls for us to
• 34:17
  Speaker 13: take a balanced approach in promoting both sides of our
• 34:20
  Speaker 13: dual mandate. With downside risks to employment having increased in
• 34:24
  Speaker 13: recent months, the balance of risks has shifted accordingly, we
• 34:28
  Speaker 13: judged it appropriate at this meeting to take another step
• 34:31
  Speaker 13: toward a more neutral policy stance. With today's decision, we
• 34:36
  Speaker 13: remain well positioned to respond in a timely way to
• 34:39
  Speaker 13: potential economic developments. We will continue to determine the appropriate
• 34:44
  Speaker 13: stance of monetary policy based on the incoming data, the
• 34:47
  Speaker 13: evolving outlook, and the balance of risks. We continue to
• 34:51
  Speaker 13: face two sided risks. In the committee's discussions at this meeting,
• 34:57
  Speaker 13: there were strongly differing views about how to proceed in December.
• 35:02
  Speaker 13: A further reduction in the policy rate at the December
• 35:04
  Speaker 13: meeting is not a foregone conclusion. Far from it. Policy
• 35:10
  Speaker 13: is not on a preset course. At today's meeting, the
• 35:14
  Speaker 13: Committee also decided to conclude the reduction of our aggregate
• 35:17
  Speaker 13: securities holdings as of December one. Our long stated plan
• 35:21
  Speaker 13: has been to stop runoff when reserves are somewhat above
• 35:25
  Speaker 13: the level we judge consistent with ample reserve conditions. Signs
• 35:29
  Speaker 13: have clearly emerged that we have reached that standard. In
• 35:33
  Speaker 13: money markets, repot rates have moved up relative to our
• 35:36
  Speaker 13: administered rates, and we have seen more notable pressures on
• 35:39
  Speaker 13: selected dates, along with more use of our standing repo facility.
• 35:44
  Speaker 13: In addition, the effective federal funds rate has begun to
• 35:47
  Speaker 13: move up relative to the rate of interest on reserve balances.
• 35:50
  Speaker 13: These developments are what we expected to see as the
• 35:53
  Speaker 13: size of our balance sheet declined and warrant today's decision
• 35:57
  Speaker 13: to cease runoff. Over the three and a half years
• 36:01
  Speaker 13: that we've been shrinking our balance sheet, our securities holdings
• 36:04
  Speaker 13: have declined by two point two trillion dollars. As a
• 36:07
  Speaker 13: share of nominal GDP, our balance sheet has fallen from
• 36:11
  Speaker 13: thirty five percent to about twenty one percent. In December,
• 36:14
  Speaker 13: we'll enter the next phase of our normalization plans by
• 36:17
  Speaker 13: holding the size of our balance sheet steady for a
• 36:19
  Speaker 13: time while reserve balances continue to move gradually lower as
• 36:23
  Speaker 13: other non reserve liabilities, such as currency, keep growing. We
• 36:28
  Speaker 13: will continue to allow agency securities to run off our
• 36:30
  Speaker 13: balance sheet and will reinvest the proceeds from those securities
• 36:34
  Speaker 13: in treasury bills, furthering progress toward a portfolio consisting primarily
• 36:38
  Speaker 13: of treasury securities. This reinvestment strategy will also help move
• 36:43
  Speaker 13: the weighted average maturity of our portfolio closer to that
• 36:46
  Speaker 13: of the outstanding stock of treasury securities, thus furthering the
• 36:50
  Speaker 13: normalization of the composition of our balance sheet. The FED
• 36:55
  Speaker 13: has been assigned two goals for monetary policy, maximum employment
• 36:59
  Speaker 13: and state prices. We remain committed to supporting our maximum employment,
• 37:04
  Speaker 13: bringing our inflation sustainably to our two percent goal and
• 37:07
  Speaker 13: keeping longer term inflation expectations well angered. Our success in
• 37:12
  Speaker 13: delivering on these goals matters to all Americans. We understand
• 37:16
  Speaker 13: that our actions affect communities, families, and businesses across the country.
• 37:20
  Speaker 13: Everything we do is in service to our public mission.
• 37:23
  Speaker 3: We get the FED.
• 37:24
  Speaker 13: We'll do everything we can to achieve our maximum employment
• 37:27
  Speaker 13: and price stability goals.
• 37:28
  Speaker 3: Thank you. I look forward to your questions.
• 37:37
  Speaker 14: Nick tim Rose to the Wall Street Journal. Sure, Cowell,
• 37:39
  Speaker 14: are you uncomfortable with how market pricing has assumed? A
• 37:43
  Speaker 14: rate cut is a foregone conclusion in your next meeting?
• 37:47
  Speaker 13: Well, as I just mentioned, a further reduction to policy
• 37:51
  Speaker 13: rate of December meeting is not a foregone conclusion as
• 37:54
  Speaker 13: I've just said, so I would say that that needs
• 37:57
  Speaker 13: to be taken on board. We had, you know, just
• 38:00
  Speaker 13: say this, nineteen participants on the committee. Everyone works very
• 38:05
  Speaker 13: hard at this and takes their obligations to serve the
• 38:07
  Speaker 13: American people very seriously. And at a time when we
• 38:10
  Speaker 13: have tension between our two goals, we have, you know,
• 38:15
  Speaker 13: strong views across the committee, and as I mentioned, there
• 38:18
  Speaker 13: were strongly different views today and the takeaway from that
• 38:22
  Speaker 13: is that we haven't made a decision about December, and
• 38:25
  Speaker 13: you know we're going to be looking at the data
• 38:26
  Speaker 13: that we have how that affects the outlook and the
• 38:29
  Speaker 13: balance of risks.
• 38:29
  Speaker 3: And I'll just say that you.
• 38:32
  Speaker 14: And some of your colleagues have framed last month, maybe
• 38:36
  Speaker 14: today I won't. We're tinking about there's a risk management exercise.
• 38:40
  Speaker 14: At what point do you conclude that you've taken out
• 38:44
  Speaker 14: enough insurance? Are you looking for some kind of improvement
• 38:47
  Speaker 14: in the outlook, or could this unfold along the lines
• 38:51
  Speaker 14: of last year where you made a sequence of adjustments
• 38:54
  Speaker 14: and you waited to gather more information.
• 38:58
  Speaker 13: So the way we have been thinking, way I've been
• 39:02
  Speaker 13: thinking about it is the risks to the two goals.
• 39:06
  Speaker 13: For a very long time, the risk was clearly of
• 39:08
  Speaker 13: higher inflation, and then that has changed now And as
• 39:12
  Speaker 13: we saw the particularly after we saw after the July meeting,
• 39:16
  Speaker 13: we saw downward provisions and job creation. We saw a
• 39:19
  Speaker 13: very different picture of the labor market and suggested that
• 39:22
  Speaker 13: there were higher downside risks to the labor market than
• 39:25
  Speaker 13: we had thought. And that suggested that policy which we
• 39:29
  Speaker 13: had been holding. I would say modestly. Others people would
• 39:32
  Speaker 13: say moderately restrictive level needed to move more in the
• 39:35
  Speaker 13: direction over time of neutral. If the two goals are
• 39:39
  Speaker 13: sort of equally at risk, then you ought to be
• 39:42
  Speaker 13: at neutral because one of them's calling for you to
• 39:44
  Speaker 13: hike and one of them is calling for you to cut.
• 39:46
  Speaker 13: So if if that got back into balance, then you'd
• 39:49
  Speaker 13: want to be roughly at neutral. So in that sense,
• 39:51
  Speaker 13: it was a risk management and I would say the
• 39:54
  Speaker 13: same about today, sort of the same logic, but as
• 39:57
  Speaker 13: I mentioned, going forward is a different thing.
• 40:01
  Speaker 5: Clear.
• 40:05
  Speaker 15: I'm Claire Jones Financial Times. Thank you for taking this question.
• 40:11
  Speaker 15: You know, we've we've we've just heard from you that
• 40:14
  Speaker 15: the discussion in December and the conclusion of the discussion
• 40:18
  Speaker 15: is not a foregone conclusion. I'd like to just dig
• 40:21
  Speaker 15: into that a little bit more about what sort of
• 40:23
  Speaker 15: arguments were brought up. Was there any consideration, for instance,
• 40:27
  Speaker 15: of the investment we're seeing in AI and some of
• 40:31
  Speaker 15: the generation of household world through rises in stock prices
• 40:36
  Speaker 15: related to the AI boom.
• 40:38
  Speaker 3: Thank you.
• 40:39
  Speaker 13: You know, I wouldn't say that's a that's that's a
• 40:41
  Speaker 13: factor in everyone's assessment of the economy. I wouldn't say
• 40:44
  Speaker 13: it's a driving factor I don't think for anybody you know,
• 40:48
  Speaker 13: I guess I would say it this way once again.
• 40:50
  Speaker 1: All right, guys, we're going to continue this coverage. Make
• 40:52
  Speaker 1: sure and get the poll. We want to get your
• 40:54
  Speaker 1: feedback on that, and hit the like on the video
• 40:56
  Speaker 1: if you.
• 40:56
  Speaker 2: Have not already. Do you like these f o MC meetings,
• 40:59
  Speaker 2: Let me know.
• 40:59
  Speaker 13: What those You can't address both those at once. You've
• 41:01
  Speaker 13: got a very different situation. So you have some people.
• 41:04
  Speaker 13: People have different forecasts, right.
• 41:06
  Speaker 3: So they'll they'll they'll they'll feel.
• 41:08
  Speaker 13: They'll forecast faster or slower progress on one or the other.
• 41:11
  Speaker 13: And they also have different levels of risk aversion. And
• 41:14
  Speaker 13: you know people some will be more averse to inflation
• 41:19
  Speaker 13: overruns and some will be more averse to underruns of employment.
• 41:23
  Speaker 13: And so you put that together, and as you can
• 41:26
  Speaker 13: see from the SEP and from the public discussion that
• 41:28
  Speaker 13: goes on between the meetings, when you know more participants
• 41:32
  Speaker 13: go out and talk, they are very disparate views and
• 41:34
  Speaker 13: they were reflected in strongly different views in today's meetings.
• 41:38
  Speaker 3: As I pointed out in my remarks.
• 41:40
  Speaker 13: And that's what leads me to say that you know
• 41:42
  Speaker 13: that we haven't made a decision about about December.
• 41:46
  Speaker 3: You know, I always say that it's a fact.
• 41:48
  Speaker 13: That we don't make decisions in advance, but this is
• 41:50
  Speaker 13: I'm saying something in addition here is that it's not
• 41:54
  Speaker 13: it's not to be seen as a foregone conclusion.
• 41:55
  Speaker 3: In fact, far from it.
• 41:58
  Speaker 15: Can I just that's a quick follow up on QT.
• 42:00
  Speaker 15: How much of the fund impressions we've seen in money
• 42:03
  Speaker 15: markets are related to the US Treasury issue a more
• 42:07
  Speaker 15: short term debt.
• 42:09
  Speaker 3: That could be one of the factors.
• 42:10
  Speaker 13: But the reality is we've seen, you know, the things
• 42:13
  Speaker 13: that we've seen higher repo rates and federal funds rate
• 42:17
  Speaker 13: moving up. These are the very things that we've see
• 42:19
  Speaker 13: that we that we look for. We actually have a
• 42:21
  Speaker 13: framework for looking at. You know, the place we're trying
• 42:25
  Speaker 13: to reach. What we said for a long time now
• 42:28
  Speaker 13: is that when we feel like we're a little bit
• 42:31
  Speaker 13: or a bit above what we consider a level that's ample,
• 42:35
  Speaker 13: that we would freeze the size of the balance sheet.
• 42:38
  Speaker 13: Of course, reserves will continue to decline from that point
• 42:40
  Speaker 13: forward as non reserve liabilities grow.
• 42:43
  Speaker 3: So this happened some of it.
• 42:46
  Speaker 13: Some things have been happening for some time now, showing
• 42:48
  Speaker 13: a gradual tightening and money market conditions. Really in the
• 42:51
  Speaker 13: last call it three weeks or so, you've seen more
• 42:55
  Speaker 13: significant tightening, and I think a clear assessment that we're
• 42:58
  Speaker 13: at that place. The other thing is, you know, we're
• 43:02
  Speaker 13: the balance sheet to shrinking at a very very slow pace.
• 43:04
  Speaker 3: Now we've reduced it.
• 43:06
  Speaker 13: By half twice, and so there's not a lot of
• 43:10
  Speaker 13: benefit to be you know, to be holding on to
• 43:13
  Speaker 13: get the last few dollars because you know, again the
• 43:17
  Speaker 13: balance sheets, the reserves are going to continue to shrink
• 43:19
  Speaker 13: as non reserves grow. So you know, there was support
• 43:22
  Speaker 13: on the committee as we thought about it to go
• 43:24
  Speaker 13: ahead with this and announce effective December one that we
• 43:28
  Speaker 13: will be you know, freezing the size of the balance sheet.
• 43:30
  Speaker 13: And the December one date gives the markets a little
• 43:33
  Speaker 13: bit of time to adapt.
• 43:36
  Speaker 3: Colby, Thank you.
• 43:40
  Speaker 5: Coby Smith of the New York Times. So much of
• 43:42
  Speaker 5: the rationale for cutting into strates even as inflation moves
• 43:45
  Speaker 5: away from the two percent target, seems to be, you
• 43:47
  Speaker 5: know that there are these mounting downside risks to the
• 43:49
  Speaker 5: labor market. But if those don't materialize, and the labor
• 43:53
  Speaker 5: market either stabilizes around current employment levels or even starts
• 43:57
  Speaker 5: to strengthen somewhat. How would that change your of how
• 44:00
  Speaker 5: much interest rates need to fall from here? Would you
• 44:03
  Speaker 5: then be a bit more concerned about underlying inflation and
• 44:07
  Speaker 5: the possibility of second round effects from Teriff's.
• 44:10
  Speaker 13: Yeah, I mean, in principle, if you were to see
• 44:12
  Speaker 13: data that suggested that the labor market strengthening or even
• 44:14
  Speaker 13: that it's stabilizing, you know, that would certainly play into
• 44:18
  Speaker 13: our decisions going forward.
• 44:19
  Speaker 3: So and we do have you know, we get some data.
• 44:21
  Speaker 13: The labor market is a place where we get, for example,
• 44:24
  Speaker 13: we get the state level data on initial claims, which
• 44:27
  Speaker 13: which are sending a sort of a signal of more
• 44:30
  Speaker 13: of the same. We also get job openings, and we'll
• 44:33
  Speaker 13: get lots of survey data. We'll get the bag book
• 44:36
  Speaker 13: and things like that, so we'll have a we'll have
• 44:37
  Speaker 13: a picture of what's going on in the labor market.
• 44:40
  Speaker 13: And you know the fact that we're not seeing an
• 44:43
  Speaker 13: uptick in claims or a downtick really in openings suggests
• 44:48
  Speaker 13: that you're seeing maybe maybe continued very gradual cooling, but
• 44:51
  Speaker 13: nothing more than that.
• 44:52
  Speaker 3: So that does give you some comfort.
• 44:55
  Speaker 5: But if this shutdown lasts a while longer and you
• 44:57
  Speaker 5: don't have that data, in hand. I'm just one ing
• 45:00
  Speaker 5: how that hinders the committee's ability to assess the state
• 45:04
  Speaker 5: of the labor market and make the right policy decisions.
• 45:07
  Speaker 5: And and also how much is that factoring into the
• 45:10
  Speaker 5: debate about December.
• 45:11
  Speaker 13: Yeah, so you know, we'll we get we get, like
• 45:15
  Speaker 13: I mentioned, what we get in the labor area, we
• 45:17
  Speaker 13: get some data in the inflation, some data in economic activity,
• 45:22
  Speaker 13: and we'll get we'll have a picture of what's going on.
• 45:24
  Speaker 13: We also will have the Beaige Book. Again, h I
• 45:28
  Speaker 13: would say we're not going to be able to have
• 45:30
  Speaker 13: the you know, the detailed feel of things. But I
• 45:34
  Speaker 13: think if there were a significant or material change in
• 45:37
  Speaker 13: the economy one way or another, I think we'd I
• 45:39
  Speaker 13: think we'd pick that up through this. So in terms
• 45:43
  Speaker 13: of how it might affect December, it's really hard to say.
• 45:45
  Speaker 13: December's uh, you know, just the meetings, I guess six
• 45:48
  Speaker 13: weeks away, we just don't.
• 45:50
  Speaker 3: Know what we're going to get.
• 45:52
  Speaker 13: If if there is a very high level of uncertainty,
• 45:55
  Speaker 13: then you know, that could be an argument in favor
• 45:58
  Speaker 13: of caution about moving.
• 46:00
  Speaker 3: But we'll have to see how it unfolds.
• 46:03
  Speaker 9: See steep lee'spen CNBC miss Sherman. Can you characterize the
• 46:10
  Speaker 9: meeting in terms of you said, strongly differing views? Was
• 46:14
  Speaker 9: this a close call this cut or was it a
• 46:16
  Speaker 9: close call maybe the other way because you had dissents
• 46:19
  Speaker 9: on both sides.
• 46:20
  Speaker 13: Thanks, So I was referring to the discussion about to
• 46:25
  Speaker 13: the extent it related to December. You saw we had
• 46:28
  Speaker 13: we had two descents, one for fifty and one for
• 46:30
  Speaker 13: no cut. So you know, that was a strong solid
• 46:34
  Speaker 13: vote in favor of this cut. The strongly differing views
• 46:39
  Speaker 13: were really about the future what does that look like?
• 46:43
  Speaker 13: And I think people are saying, you know, they're noticing
• 46:46
  Speaker 13: stronger economic activity. You know, forecasters generally broadly have raised
• 46:51
  Speaker 13: their economic growth forecast for this year and next year,
• 46:53
  Speaker 13: in some cases quite materially. In the meantime, we see,
• 46:57
  Speaker 13: you know, a labor market that's kind of I don't
• 47:00
  Speaker 13: want to say stable, but it's.
• 47:04
  Speaker 3: Not clearly in motion.
• 47:05
  Speaker 13: It's not clearly declining quickly in any case, it may
• 47:08
  Speaker 13: be just continuing to gradually cool. And again, people have
• 47:11
  Speaker 13: different they have different forecasts and expectations about the economy
• 47:14
  Speaker 13: and different different risk tolerance is and so there's a
• 47:18
  Speaker 13: you know, you read the SEP. You read the speeches.
• 47:21
  Speaker 13: You know there are different views on the committee and
• 47:23
  Speaker 13: to the point where I said what.
• 47:25
  Speaker 9: I said, just to follow up on the balance sheet,
• 47:29
  Speaker 9: if you stop at the runoff, now, does that mean
• 47:32
  Speaker 9: you have to go back to actually adding assets sometime
• 47:36
  Speaker 9: next year so that the balance sheet doesn't shrink as
• 47:40
  Speaker 9: a percent of GDP and become a tightening factor.
• 47:42
  Speaker 3: So you're right.
• 47:43
  Speaker 13: The place will be on December one is that the
• 47:46
  Speaker 13: size of the balance sheet is frozen, and as mortgage
• 47:49
  Speaker 13: backed security is mature, will reinvest those in treasury builds,
• 47:53
  Speaker 13: which will foster both a more treasury balance sheet and
• 47:57
  Speaker 13: also as shorter duration. So that's what In the meantime,
• 48:00
  Speaker 13: if you freeze the size of the balance sheet, the
• 48:02
  Speaker 13: non reserve liabilities currency for example, they're going to continue
• 48:05
  Speaker 13: to grow organically, and because of the size of the
• 48:07
  Speaker 13: balance sheet is frozen, you have further shrinkage in reserves.
• 48:11
  Speaker 13: And reserves is the thing that we're that we're managing.
• 48:13
  Speaker 13: That has to be ample. So that'll happen for a time,
• 48:17
  Speaker 13: but not not a tremendously long time. We don't know
• 48:19
  Speaker 13: exactly how long, but at a certain point you'll want
• 48:22
  Speaker 13: to start grow. You want to start reserves to start
• 48:25
  Speaker 13: gradually growing to keep up with, you know, the size
• 48:28
  Speaker 13: of the banking system and the size of the economy.
• 48:30
  Speaker 13: So we'll be adding reserves at a certain point and
• 48:34
  Speaker 13: that's the that's the last point. Even then will be
• 48:37
  Speaker 13: will be. We didn't make decisions about this today, but
• 48:41
  Speaker 13: we did talk today about the composition of the balance sheet.
• 48:44
  Speaker 13: And there's a desire that the that the balance sheet
• 48:46
  Speaker 13: be right now where it's it's got a lot more
• 48:50
  Speaker 13: duration than the outstanding universe of treasury securities, and we
• 48:54
  Speaker 13: want to move to a place where we're closer to
• 48:56
  Speaker 13: that duration.
• 48:57
  Speaker 3: That will take some time.
• 48:57
  Speaker 13: We haven't made a decision about the ultimate endpoint, but
• 49:01
  Speaker 13: we all agree that we want to move more in
• 49:03
  Speaker 13: the direction of a balance sheet that more closely reflects
• 49:05
  Speaker 13: the outstanding treasuries, and that means a shorter duration balance sheet. Now,
• 49:11
  Speaker 13: this is something that's going to be take a long
• 49:13
  Speaker 13: time and move very, very gradually. I don't think you'll
• 49:16
  Speaker 13: notice it in market conditions, but that's the direction of things.
• 49:22
  Speaker 9: John L.
• 49:26
  Speaker 7: Janell Marte with Bloomberg. How are officials interpreting the latest
• 49:30
  Speaker 7: CPI report? So some components came in lower than expected,
• 49:35
  Speaker 7: but or inflation was still at three percent. So at
• 49:39
  Speaker 7: this moment are what are you learning about the drivers
• 49:43
  Speaker 7: and also what do you view that the risks are
• 49:46
  Speaker 7: greater that the Fed makes a mistake on employment or inflation.
• 49:50
  Speaker 13: So okay, so the September CPI report, we didn't get
• 49:55
  Speaker 13: PPI after that, which is which is important for translation
• 49:59
  Speaker 13: into what we look at, which is PCE inflation. But
• 50:01
  Speaker 13: we can still make a pretty good assessment of what
• 50:04
  Speaker 13: that will be when we get PPI.
• 50:06
  Speaker 3: There might be some adjustments, so.
• 50:08
  Speaker 13: Directionally, you know, it was a little softer than expected,
• 50:13
  Speaker 13: and we always break it down into the three components.
• 50:15
  Speaker 13: So basically, you've seen goods prices increasing and that's really
• 50:20
  Speaker 13: due to tariffs, and that's due that's compared to a
• 50:24
  Speaker 13: longer run trend of very very mild deflation and goods
• 50:28
  Speaker 13: So that's moving inflation up. On the other side of that,
• 50:31
  Speaker 13: good news that housing services inflation has been coming down
• 50:35
  Speaker 13: as expected to continue to come down. So if you
• 50:37
  Speaker 13: remember a year a couple of years ago, that's the
• 50:39
  Speaker 13: one that just we kept expecting it to do that.
• 50:42
  Speaker 13: Now it's been doing that for some time and we
• 50:45
  Speaker 13: expect to continue that. That leaves the biggest category is
• 50:48
  Speaker 13: services other than housing services, and that's kind of been
• 50:52
  Speaker 13: moving sideways over the last few months, but a significant
• 50:56
  Speaker 13: part of that is non market service and we don't
• 51:00
  Speaker 13: take a lot of signal about the titaness of the
• 51:03
  Speaker 13: economy from that. So if you add all that up,
• 51:06
  Speaker 13: a couple of things to say. One is that inflation
• 51:09
  Speaker 13: away from tariffs is actually not so far from our
• 51:12
  Speaker 13: two percent goal. We estimate that people have different estimates
• 51:15
  Speaker 13: of what that is, but it might be you know,
• 51:18
  Speaker 13: five or six tense, and so that you know, if
• 51:22
  Speaker 13: it's two point eight, then you know, core PCE not
• 51:26
  Speaker 13: including tariffs might be two point three or two point
• 51:29
  Speaker 13: four in that range something like that.
• 51:31
  Speaker 3: So that's not so far from your goal. So that
• 51:35
  Speaker 3: we look at that.
• 51:36
  Speaker 13: And the thing about tariff inflation is the base case
• 51:40
  Speaker 13: is that it will come and it probably will increase further,
• 51:45
  Speaker 13: but it is that it will be a one time increase,
• 51:48
  Speaker 13: and you know, we've been very focused for all of
• 51:50
  Speaker 13: this year at making sure that that's the case and
• 51:53
  Speaker 13: thinking carefully about what are the what are the pathways
• 51:57
  Speaker 13: through which it could become something else troublesome inflation. One
• 52:00
  Speaker 13: of those would be you know, a really tight labor market.
• 52:03
  Speaker 13: We don't see that. I know, there could be inflation
• 52:05
  Speaker 13: expectations moving, we don't see that. So I think, you know,
• 52:08
  Speaker 13: we we're watching this very carefully. I think it's it's
• 52:12
  Speaker 13: not the case that we're just assuming that it's going
• 52:14
  Speaker 13: to be one time inflation. We understand fully that this
• 52:17
  Speaker 13: is a risk we have to monitor and ultimately manage.
• 52:20
  Speaker 7: With the stubborn in services inflation, what are some of
• 52:24
  Speaker 7: the things that the fact could do to address that,
• 52:27
  Speaker 7: and especially when we're seeing potentially labor supply.
• 52:30
  Speaker 3: Challenges, sorry say the.
• 52:32
  Speaker 7: First the stubborn services inflation, they use service inflation.
• 52:37
  Speaker 13: Well, again, the part of services inflation that is that
• 52:41
  Speaker 13: that isn't coming down as we would like it to
• 52:44
  Speaker 13: is the non market part of non housing services. And
• 52:50
  Speaker 13: you know overall that that's just something that we expect
• 52:54
  Speaker 13: will come down. The non housing, the non market part
• 52:56
  Speaker 13: of it should come down. It largely reflects higher stock prices,
• 53:00
  Speaker 13: and I mean financial services that are acuted rather.
• 53:04
  Speaker 3: Than actually paid is a big part of that.
• 53:07
  Speaker 13: But also just you know, we think policy is still
• 53:10
  Speaker 13: modestly restrictive in my telling, and so that's the kind
• 53:13
  Speaker 13: of thing that should lead to a gradually cooling economy.
• 53:15
  Speaker 13: That's one of the reasons you see a gradually cooling
• 53:17
  Speaker 13: labor market is because you know, the FED policy is
• 53:22
  Speaker 13: modestly restrictive, so that that should also help get that.
• 53:26
  Speaker 13: I want to say, though, we're absolutely committed to returning
• 53:29
  Speaker 13: inflation to two percent. If you look at longer term
• 53:32
  Speaker 13: surveys or market pricing, you will see that that that's
• 53:36
  Speaker 13: a credible commitment and there should be no question that
• 53:39
  Speaker 13: that that's where we're going.
• 53:42
  Speaker 16: Chris, Great, thank you, Chris rhegaber As sas heated press.
• 53:49
  Speaker 16: So there's a big investment boom in AI infrastructure right now,
• 53:53
  Speaker 16: as you know, and wondering if the existence of section
• 53:56
  Speaker 16: of boom what indicate that rates are not that restrictive
• 54:00
  Speaker 16: after all, and could further rate cuts at this point
• 54:02
  Speaker 16: perhaps fuel an excess level of investment there or market bubbles.
• 54:08
  Speaker 16: How is the FED thinking about that?
• 54:11
  Speaker 3: So I don't I don't think that the.
• 54:16
  Speaker 13: You're right, there's a there's a lot of data centers
• 54:19
  Speaker 13: being built and other investments being made around the country
• 54:22
  Speaker 13: and around the world, and big US companies are just
• 54:29
  Speaker 13: investing a lot of resources in thinking about how AI,
• 54:34
  Speaker 13: which will be based on those data centers. Run through
• 54:37
  Speaker 13: the data centers is going to affect their businesses, so
• 54:39
  Speaker 13: it's a big deal. I don't think that the spending
• 54:44
  Speaker 13: that happens to build data centers all over the country
• 54:47
  Speaker 13: is especially intra sensitive. It's based on longer run it's
• 54:51
  Speaker 13: you know, longer run assessments that this is an area
• 54:54
  Speaker 13: where there's going to be a lot of investment and
• 54:57
  Speaker 13: that's going to drive higher productivity, and that sorts of
• 54:59
  Speaker 13: things don't I don't know how those investments will work out,
• 55:02
  Speaker 13: but I don't think they're particularly interest sensitive compared to
• 55:05
  Speaker 13: some of the other sectors.
• 55:07
  Speaker 16: And then just a quick follow up, could you you
• 55:08
  Speaker 16: mentioned that you do have data that you're looking at
• 55:10
  Speaker 16: for inflation and growth in the absence of government data.
• 55:13
  Speaker 16: Could you give us a sense I think we know
• 55:16
  Speaker 16: a lot about the jobs data that's out there. Can
• 55:18
  Speaker 16: you give us a sense of what you're looking at
• 55:20
  Speaker 16: to track inflation in the absence of government data. Thank you.
• 55:23
  Speaker 13: So it's a lot of things, and it doesn't replace
• 55:26
  Speaker 13: government data, but you know, you know all of these
• 55:28
  Speaker 13: it's you know, it's I'll just mention some of the
• 55:31
  Speaker 13: many many names, price stats, Adobe, and others, and for
• 55:38
  Speaker 13: wage inflation, there's a DP data.
• 55:42
  Speaker 3: On spending.
• 55:43
  Speaker 13: You're going to ask about spending at some point, you know,
• 55:45
  Speaker 13: there are lots of other things that we look at,
• 55:46
  Speaker 13: but it's again it's it's many, many different sources, and
• 55:51
  Speaker 13: again including what we get out of the of the
• 55:53
  Speaker 13: Beige Book, which will be sort of come out of
• 55:57
  Speaker 13: mid cycle as always, and it doesn't does doesn't replace
• 56:01
  Speaker 13: the government data, but it gives us a picture. Again,
• 56:04
  Speaker 13: I think if something material were happening, if there were
• 56:07
  Speaker 13: material developments, I think we would pick that up. I
• 56:09
  Speaker 13: don't think we'll be able to have the very granual
• 56:12
  Speaker 13: understanding of the economy while well, this data is not available.
• 56:17
  Speaker 9: Howard Howard Sneider with our routers, thank you.
• 56:26
  Speaker 17: I just want you to elaborate a little bit on
• 56:27
  Speaker 17: once you said a moment ago about the lack a
• 56:30
  Speaker 17: continued shutdown making it more difficult to make a move
• 56:33
  Speaker 17: in December, and that may make you more cautious to
• 56:37
  Speaker 17: the degree you are relying on private data that isn't
• 56:41
  Speaker 17: the gold standard, or that you're relying on your own
• 56:43
  Speaker 17: surveys of the Beige Book, do you worry at some
• 56:46
  Speaker 17: point you're going to have to start making policy by anecdote.
• 56:49
  Speaker 3: You know, this is a temporary state of affairs, and
• 56:52
  Speaker 3: you know, we're going to do our jobs.
• 56:54
  Speaker 13: We're going to collect every scrap of data we can find,
• 56:57
  Speaker 13: evaluated and think carefully about it.
• 56:59
  Speaker 3: And that's that's our jobs. That's what we're going to do.
• 57:03
  Speaker 13: If you ask me, could could it affect the the
• 57:06
  Speaker 13: you know, the December meeting, I'm not saying it's going
• 57:09
  Speaker 13: to but yeah, you could imagine that that. You know,
• 57:11
  Speaker 13: what do you do if what do you do and
• 57:13
  Speaker 13: if you're driving in the fog you slow down?
• 57:14
  Speaker 3: So that that could or could not. I don't.
• 57:17
  Speaker 13: I don't know how that's going to play into things.
• 57:20
  Speaker 13: We may get the data may come back, but there's
• 57:22
  Speaker 13: a there's a possibility that it would make sense to
• 57:25
  Speaker 13: be more cautious about moving.
• 57:27
  Speaker 3: I'm not I'm not committing to that.
• 57:28
  Speaker 13: I'm just saying it's certainly a possibility that you would say,
• 57:32
  Speaker 13: we really can't see, so let's let's slow down.
• 57:36
  Speaker 17: As a follow up in the debate on this meeting,
• 57:39
  Speaker 17: we saw recently some pretty big layoff announcements coming from
• 57:43
  Speaker 17: from Amazon and others. UH, wondering if that figured into
• 57:46
  Speaker 17: the discussion at all, that you're starting to see the
• 57:48
  Speaker 17: turn this tension between growth and employment starting to be resolved,
• 57:52
  Speaker 17: you know, to the detriment of employment.
• 57:54
  Speaker 7: Uh.
• 57:55
  Speaker 17: And secondly, some of the stresses starting to appear in
• 57:58
  Speaker 17: the bottoms or the K as they call it, household
• 58:03
  Speaker 17: health premiums that are going to be possibly be going
• 58:05
  Speaker 17: up quite substantially, things like that. Has that started to
• 58:08
  Speaker 17: become a factor in your policy discussion.
• 58:10
  Speaker 13: So those are those are both things you know that
• 58:12
  Speaker 13: we're watching very very very carefully. To start with the layoffs,
• 58:17
  Speaker 13: you're right, you see a significant number of companies either
• 58:21
  Speaker 13: announcing that they are not going to be doing much
• 58:24
  Speaker 13: hiring or actually doing layoffs.
• 58:26
  Speaker 12: And.
• 58:28
  Speaker 13: Much of the time they're talking about AI and what
• 58:30
  Speaker 13: it can do. So we're watching that very carefully, and
• 58:35
  Speaker 13: you know, yes, it could absolutely have implications for job creation.
• 58:40
  Speaker 3: We don't really see it.
• 58:41
  Speaker 13: In the in the initial claims data yet. Now it's
• 58:46
  Speaker 13: not a surprise that we don't. It takes some time
• 58:48
  Speaker 13: for it to get in there.
• 58:49
  Speaker 3: But we're watching that that really carefully.
• 58:52
  Speaker 13: But again, don't don't see it yet in the in
• 58:54
  Speaker 13: the in the in the initial claims data on the
• 58:57
  Speaker 13: K shaped economy thing, I would say the same thing
• 59:01
  Speaker 13: or a similar thing. We are if you listen to
• 59:06
  Speaker 13: the earnings calls or the reports of you know, big
• 59:10
  Speaker 13: public consumer facing companies, many many of them are are
• 59:14
  Speaker 13: saying that there's a bifer cadd economy there and that
• 59:18
  Speaker 13: consumers at the lower end are struggling and buying less
• 59:21
  Speaker 13: and shifting to lower cost products, but that at the
• 59:24
  Speaker 13: top people are spending at the higher incommon wealth and
• 59:28
  Speaker 13: they're so so much much anecdotal data on that, and
• 59:33
  Speaker 13: so we think there's something there.
• 59:37
  Speaker 18: So Edward, thank you, Edward Lawrence with Fox Business. So,
• 59:45
  Speaker 18: mister Sherman, I wanted to take another crack at the
• 59:46
  Speaker 18: at the further reduction of rates is not a foregone conclusion,
• 59:51
  Speaker 18: so in December you said far from it. So if
• 59:53
  Speaker 18: a cut might not be on the table for December
• 59:57
  Speaker 18: because of lack of data, what is the other concerns
• 59:59
  Speaker 18: then stem from? So if it's not lack of data
• 1:00:03
  Speaker 18: as the reason December is not a foregone conclusion, what
• 1:00:07
  Speaker 18: other things could be the concern then?
• 1:00:09
  Speaker 13: Well, perspectives of people on the committee that you know,
• 1:00:13
  Speaker 13: we've now moved one hundred and fifty basis points, and
• 1:00:17
  Speaker 13: that we're down into you know, you're into that range
• 1:00:21
  Speaker 13: between three and four where most estimates of many estimates
• 1:00:26
  Speaker 13: of the neutral rate live in that three to four percent. Here,
• 1:00:28
  Speaker 13: you're there. Now, you're above the median number for the committee.
• 1:00:33
  Speaker 13: But I think there are people on the committee who
• 1:00:34
  Speaker 13: have higher estimates of the neutral rate. And that's you know,
• 1:00:37
  Speaker 13: you can argue these positions since it can't be directly
• 1:00:39
  Speaker 13: observed to neutral rates. So you know, I think for
• 1:00:43
  Speaker 13: for some part of the committee, you know, it's time
• 1:00:49
  Speaker 13: to maybe take a step back and and see whether
• 1:00:53
  Speaker 13: there really are downside risk to the labor market or
• 1:00:57
  Speaker 13: see whether in fact the growth that the stronger growth
• 1:01:01
  Speaker 13: that we're seeing is real. Ordinarily the labor market is
• 1:01:06
  Speaker 13: a better indicator of the momentum of the economy than
• 1:01:09
  Speaker 13: the spending data. That's the lore in this case, that
• 1:01:13
  Speaker 13: gives a more downbeat read. So people just have you know,
• 1:01:17
  Speaker 13: there again, we've cut fifty more basis points in the
• 1:01:21
  Speaker 13: last two meetings, and there's a sense like let's from
• 1:01:25
  Speaker 13: some let's pause here kind of thing, and a sense
• 1:01:29
  Speaker 13: from others wanting to go ahead. But that's why I
• 1:01:31
  Speaker 13: say differing views, strongly differing views, and.
• 1:01:35
  Speaker 18: So on that division, then you're talking about going forward.
• 1:01:38
  Speaker 18: So what's more important in this division? Is it inflation risks,
• 1:01:42
  Speaker 18: is it employment risk? Or is there a deeper philosophy
• 1:01:46
  Speaker 18: division among the board.
• 1:01:48
  Speaker 13: I look, everybody on the committee is deeply committed to
• 1:01:52
  Speaker 13: doing the right thing to achieve our goals maximum employment
• 1:01:56
  Speaker 13: and stable prices. You have differences on how to do that,
• 1:01:59
  Speaker 13: and as I mentioned, and some of that is different forecasts,
• 1:02:01
  Speaker 13: but a lot of it is also different risk aversions
• 1:02:05
  Speaker 13: to the different to do different variables, which is common
• 1:02:08
  Speaker 13: through you know, through all federal reserves there did people
• 1:02:12
  Speaker 13: just have different risk tolerances, let's say. So that leads
• 1:02:16
  Speaker 13: you to people with disparate views. You will know that
• 1:02:19
  Speaker 13: from the speeches you've been listening to from my colleagues.
• 1:02:22
  Speaker 13: And so we're at a place now where we have,
• 1:02:24
  Speaker 13: in fact cut two more times, and you know, we're
• 1:02:28
  Speaker 13: now we're one hundred and fifty basis points closer to
• 1:02:30
  Speaker 13: neutral wherever that may be, than we were a year ago.
• 1:02:33
  Speaker 13: And so there's there's a growing chorus now of feeling
• 1:02:36
  Speaker 13: like maybe this is where we should at least way
• 1:02:39
  Speaker 13: to cycle something like that.
• 1:02:40
  Speaker 3: That's what it is. It's just what you think it
• 1:02:42
  Speaker 3: would be.
• 1:02:43
  Speaker 13: It's and again you've seen it in the September Summer
• 1:02:47
  Speaker 13: of economic projections. You've seen this in the public remarks
• 1:02:50
  Speaker 13: of f HOMC participants. And now I'm telling you that's
• 1:02:53
  Speaker 13: what that's what you can expect that in the minutes
• 1:02:56
  Speaker 13: and I'm just telling you that's what happened in the meeting.
• 1:03:00
  Speaker 19: Elizabeth, Thank you so much. Less Scholzie with ABC News.
• 1:03:05
  Speaker 19: What is your explanation for why the job market is
• 1:03:09
  Speaker 19: weakening right now and what will this ratecut do to
• 1:03:12
  Speaker 19: improve the job market?
• 1:03:14
  Speaker 13: So the I think the there are two things affecting
• 1:03:18
  Speaker 13: the job market, and one of them is just a
• 1:03:22
  Speaker 13: dramatic reduction in the supply of new workers.
• 1:03:25
  Speaker 3: So, and that's two things.
• 1:03:27
  Speaker 13: That's declining labor force participation, which is a cyclical thing,
• 1:03:33
  Speaker 13: and then there's declining immigration, which is just a big
• 1:03:36
  Speaker 13: policy change that actually began in the last administration and
• 1:03:39
  Speaker 13: has been accelerated now. So a big part of the
• 1:03:42
  Speaker 13: whole story is that that supply side story. Okay, In addition,
• 1:03:46
  Speaker 13: labor demand has declined, and you know, so the labor
• 1:03:49
  Speaker 13: of the unemployment rate has gone down, meaning that demand
• 1:03:52
  Speaker 13: for workers is going down a little more than supply.
• 1:03:55
  Speaker 13: So that's that's what's going on. But it is most
• 1:04:00
  Speaker 13: a supply functions. You know, it's mostly a function of
• 1:04:03
  Speaker 13: the change in supply, I think, and many people think.
• 1:04:07
  Speaker 13: So the question then is what does what does the
• 1:04:10
  Speaker 13: you know, our tool do which supports demand? And you
• 1:04:13
  Speaker 13: know so, and I would just say, when you're when
• 1:04:16
  Speaker 13: you're in a situation where job job creation, if you
• 1:04:21
  Speaker 13: adjust for likely overcounting in the way that b LS
• 1:04:26
  Speaker 13: does its work, is pretty close to zero. So maximum
• 1:04:30
  Speaker 13: employment doesn't on a sustainable basis, doesn't if it's if
• 1:04:34
  Speaker 13: you're making creating zero jobs, if it's in equilibrium, if
• 1:04:38
  Speaker 13: it's if it's in balance, it's a pretty as as
• 1:04:41
  Speaker 13: I said before, a pretty curious balance.
• 1:04:43
  Speaker 3: So you know, I thought, in any of my.
• 1:04:46
  Speaker 13: Colleagues, So in fact, you've seen the last two meetings
• 1:04:49
  Speaker 13: that it was appropriate for us to react by supporting
• 1:04:52
  Speaker 13: demand with our with our rates.
• 1:04:55
  Speaker 3: And we've done that. We've reduced so that rates are looser.
• 1:04:58
  Speaker 13: I wouldn't say that they're commodative right now, but they're
• 1:05:02
  Speaker 13: meaningfully less tight than they were and that should help
• 1:05:06
  Speaker 13: so that at least the labor market doesn't get worse,
• 1:05:08
  Speaker 13: though It's a complicated situation, and some people argue that
• 1:05:12
  Speaker 13: this is supply and we really can't affect it much
• 1:05:15
  Speaker 13: with our tools. But others argue, as I do, that
• 1:05:19
  Speaker 13: there is an effect from demand and that we should
• 1:05:21
  Speaker 13: use our tools to support the labor market when we
• 1:05:23
  Speaker 13: see this happening.
• 1:05:25
  Speaker 19: You also talked about tariff causing a one time price increase.
• 1:05:28
  Speaker 19: Should American household consumers expect that inflation will continue to
• 1:05:32
  Speaker 19: go up this year because of those tariffs.
• 1:05:34
  Speaker 13: So the basic expectation is that there will be some
• 1:05:39
  Speaker 13: additional increase inflation because it takes a while for tariffs
• 1:05:43
  Speaker 13: to work their way through the through the production chain
• 1:05:48
  Speaker 13: and finally get to consumers. And we see this now
• 1:05:51
  Speaker 13: from the tariffs that were put in place now many
• 1:05:53
  Speaker 13: months ago.
• 1:05:54
  Speaker 3: We see those effects.
• 1:05:55
  Speaker 13: But if you put tariffs in effect that they've been
• 1:05:58
  Speaker 13: coming into effect consist in you know, February, March, April, May,
• 1:06:03
  Speaker 13: and that's all happening. So that'll continue to happen for
• 1:06:06
  Speaker 13: some time, probably into the spring. These are not big
• 1:06:08
  Speaker 13: increases though these are a tenth or so on inflation.
• 1:06:12
  Speaker 13: They may be big increases on a particular product that's
• 1:06:14
  Speaker 13: been tariffed, but overall, these are fairly modest.
• 1:06:17
  Speaker 3: I think.
• 1:06:17
  Speaker 13: You know, some projections call where two point eight percent inflation.
• 1:06:20
  Speaker 13: You might get two or three more tenths or four
• 1:06:23
  Speaker 13: more tents maybe, But then as as all the teriffs
• 1:06:27
  Speaker 13: are in they stop generating inflation. You've had a one
• 1:06:30
  Speaker 13: time pricing increase, as long as you're not at least,
• 1:06:33
  Speaker 13: this is the theory. This is how we believe and
• 1:06:35
  Speaker 13: hope that it will work out. Once the last tariff
• 1:06:39
  Speaker 13: is put on something. At that point it becomes a
• 1:06:43
  Speaker 13: higher price level, but it stops going up. If you will,
• 1:06:47
  Speaker 13: prices stop going up, they'll just be at that level,
• 1:06:49
  Speaker 13: and then measured inflation will come back down to non
• 1:06:52
  Speaker 13: tariff inflation. As I mentioned, non tariff inflation is not
• 1:06:56
  Speaker 13: so far from two percent.
• 1:06:57
  Speaker 3: Now.
• 1:06:57
  Speaker 13: Now, consumers don't interested in that story. Their prices are
• 1:07:03
  Speaker 13: higher more than that. The reason they're so unhappy. But
• 1:07:06
  Speaker 13: ben inflation is the inflation that we had in twenty
• 1:07:08
  Speaker 13: twenty one, two and three.
• 1:07:10
  Speaker 3: Because you know, you.
• 1:07:11
  Speaker 13: Can say that prices aren't going up as much, but
• 1:07:14
  Speaker 13: that doesn't mean people aren't feeling those higher prices from
• 1:07:17
  Speaker 13: the inflation.
• 1:07:18
  Speaker 3: We had two or three years ago.
• 1:07:20
  Speaker 13: They are, and that's I think a large part of
• 1:07:22
  Speaker 13: why the public, few sample people, inflation is still very
• 1:07:26
  Speaker 13: much making people quite unhappy even you know, and it's
• 1:07:30
  Speaker 13: nice that you know that prices are not going up
• 1:07:33
  Speaker 13: as fast as they were, but they're still much higher
• 1:07:35
  Speaker 13: than they were, and it'll take some time for that
• 1:07:37
  Speaker 13: effect to wear off. As real incomes rise, it will
• 1:07:41
  Speaker 13: feel better over.
• 1:07:42
  Speaker 3: Time, but that's going to take time.
• 1:07:45
  Speaker 20: Right, Michael Lakeete from Bloomberg Television Radio, Do you have
• 1:07:52
  Speaker 20: any concerns that equity markets are or are close to
• 1:07:56
  Speaker 20: being overvalued at this point?
• 1:07:59
  Speaker 13: You know, we don't look at any one asset price
• 1:08:03
  Speaker 13: and say, hey, that's wrong.
• 1:08:05
  Speaker 3: You know, it's not our job to do that.
• 1:08:07
  Speaker 13: We look at the overall financial system and we ask
• 1:08:11
  Speaker 13: whether it's stable, whether it could withstand shocks.
• 1:08:14
  Speaker 3: Right, So, you know, banks.
• 1:08:16
  Speaker 13: Are well capitalized, while some households are clearly under stress.
• 1:08:20
  Speaker 13: In the aggregate, you know, households are in good shape
• 1:08:24
  Speaker 13: financially relatively, you know, relatively madile levels of debt at
• 1:08:30
  Speaker 13: the lower income spectrum. You are seeing rising defaults, particularly
• 1:08:33
  Speaker 13: around subprime auto, but nonetheless in the aggregate pretty good.
• 1:08:38
  Speaker 13: And you don't see so you don't see from too
• 1:08:41
  Speaker 13: much leverage in the banking system or the financial system.
• 1:08:43
  Speaker 3: It's a mixed picture, but it's not an overly troubling picture.
• 1:08:47
  Speaker 3: And again I'm not.
• 1:08:49
  Speaker 13: It's not appropriate. You know, we don't set asset prices.
• 1:08:53
  Speaker 3: Markets do that, well are you.
• 1:08:55
  Speaker 20: You must be well aware by lowering interest rates, you're
• 1:08:58
  Speaker 20: contributing to additional asset price increases. And I wonder how
• 1:09:04
  Speaker 20: you balance the idea that lowering rates would help the
• 1:09:06
  Speaker 20: labor market with the reality that it seems more likely
• 1:09:09
  Speaker 20: to be stimulating increased investment in AI, which is the
• 1:09:13
  Speaker 20: rationale for thousands of job cuts that have been announced
• 1:09:17
  Speaker 20: in the last few weeks.
• 1:09:18
  Speaker 3: Yeah, I don't.
• 1:09:19
  Speaker 13: I don't think interest rates are an important part of
• 1:09:22
  Speaker 13: the AI of the data center story. I think, you know,
• 1:09:26
  Speaker 13: people think they're great economics in building these data centers,
• 1:09:30
  Speaker 13: and they're making a lot of money building them, and
• 1:09:32
  Speaker 13: they I think they have very high present value and
• 1:09:35
  Speaker 13: all that sort of thing. It's not really about it's
• 1:09:37
  Speaker 13: not a it's not you know about twenty five basis points.
• 1:09:40
  Speaker 3: Here or there.
• 1:09:42
  Speaker 13: You know, we use our tools to support the labor
• 1:09:44
  Speaker 13: market and to create price stability.
• 1:09:47
  Speaker 3: That's what we do.
• 1:09:48
  Speaker 13: That's our two jobs, right, so we're here to buy
• 1:09:52
  Speaker 13: by lowering rates at the margin, that will support demand
• 1:09:56
  Speaker 13: and that will support more hiring.
• 1:09:57
  Speaker 3: And that's why we do it.
• 1:09:59
  Speaker 13: Now, No twenty five basis point or even fifty basis
• 1:10:02
  Speaker 13: point hike is going to be a this positive thing.
• 1:10:04
  Speaker 13: But ultimately, you know, lower rates will support more demand
• 1:10:09
  Speaker 13: and that'll support hiring over time. Now, of course, we
• 1:10:12
  Speaker 13: also have to be careful about this, which is what
• 1:10:15
  Speaker 13: we've been doing, because we know where inflation is and
• 1:10:18
  Speaker 13: we know that.
• 1:10:18
  Speaker 3: You know, I've told you the story.
• 1:10:19
  Speaker 13: It's a complicated story, but this is the best assessment
• 1:10:22
  Speaker 13: that we can make. And but you know, because there's
• 1:10:27
  Speaker 13: uncertainty around around inflation and the path the head for inflation,
• 1:10:31
  Speaker 13: that's why we're going. That's why we the pace we're
• 1:10:33
  Speaker 13: going has been a careful one.
• 1:10:36
  Speaker 21: Victorian Hi Victoria Weed from Politico on AI. I'm just wondering,
• 1:10:45
  Speaker 21: you know, it seems like a lot of the economic
• 1:10:47
  Speaker 21: growth that we've been seeing is fed by investments in AI.
• 1:10:50
  Speaker 21: So how worried are you about what a sudden contraction
• 1:10:54
  Speaker 21: in tech investment would mean for the overall economy. Is
• 1:10:56
  Speaker 21: there enough strength in other sectors and specifically, are there
• 1:11:01
  Speaker 21: are there any lessons that you take from the nineteen
• 1:11:03
  Speaker 21: nineties in how you might approach what's happening right now.
• 1:11:06
  Speaker 13: Yeah, this is this is different in the sense that
• 1:11:10
  Speaker 13: these companies, the companies that are so highly valued, actually
• 1:11:12
  Speaker 13: have earnings and stuff like that. So if you go
• 1:11:14
  Speaker 13: back to the nineties in the dot com they were
• 1:11:18
  Speaker 13: these are ideas rather than companies, and you know, we're
• 1:11:21
  Speaker 13: so there's a clear bubble there whereas the you know,
• 1:11:23
  Speaker 13: the I won'ld go into particular names, but they actually
• 1:11:27
  Speaker 13: have earnings, and you know, it looks like they have
• 1:11:29
  Speaker 13: business models and and profits and that kind of thing.
• 1:11:33
  Speaker 3: So it's it's really a different thing. You know.
• 1:11:38
  Speaker 13: It's the investment we're getting in equipment and all those
• 1:11:43
  Speaker 13: things that go into creating data centers and feeding the
• 1:11:46
  Speaker 13: a It's clearly one of the big sources of growth
• 1:11:49
  Speaker 13: in the economy. Consumer spending also, though, has been you know,
• 1:11:52
  Speaker 13: is much bigger than that and has been growing and
• 1:11:55
  Speaker 13: has defied a lot of you know, negative forecasts, continuing
• 1:12:01
  Speaker 13: to do so this year. Consumers are still spending now
• 1:12:04
  Speaker 13: it is it may it may be mostly higher end
• 1:12:06
  Speaker 13: consumers or maybe skewed that way, but the consumer is spending.
• 1:12:10
  Speaker 13: And that's a big, big chunk of what's going on
• 1:12:12
  Speaker 13: in the economy, bigger than substantially, bigger than.
• 1:12:15
  Speaker 3: AI you could point to to growth.
• 1:12:17
  Speaker 13: I mean, actually maybe growth as opposed to level, but
• 1:12:22
  Speaker 13: consumer spending is a much bigger part.
• 1:12:23
  Speaker 3: Of the economy.
• 1:12:25
  Speaker 21: And why do you think that the labor market is
• 1:12:27
  Speaker 21: slowing so much even though consumer spending is strong.
• 1:12:30
  Speaker 3: Why is it slowed so much?
• 1:12:31
  Speaker 13: Well, what's happened is is that the supply of workers
• 1:12:35
  Speaker 13: has dropped very, very sharply due to mainly immigration, but
• 1:12:39
  Speaker 13: also lower labor force participation. So and that means there's
• 1:12:45
  Speaker 13: less need for new jobs because there's there's there isn't
• 1:12:48
  Speaker 13: this flow into the into the pool of labor that
• 1:12:53
  Speaker 13: you know where people need jobs, because there aren't those
• 1:12:56
  Speaker 13: people now, So there's not a supply of workers showing
• 1:12:59
  Speaker 13: up for jobs. In addition, demand has also gone down,
• 1:13:02
  Speaker 13: and so has labor force participation, is to claim, which
• 1:13:05
  Speaker 13: is more of a sign in this case of demand
• 1:13:10
  Speaker 13: as well as trend. So I think you're seeing some softening.
• 1:13:14
  Speaker 13: You know, the economy is growing at a slower rate
• 1:13:16
  Speaker 13: than it was two point four percent last year. We
• 1:13:18
  Speaker 13: think around one point six percent this year, it could
• 1:13:21
  Speaker 13: have been a couple of tenths higher if not for
• 1:13:24
  Speaker 13: the shutdown, and of course that will reverse. But you know,
• 1:13:29
  Speaker 13: you still got the economy growing at a moderate pace.
• 1:13:33
  Speaker 22: Andrew Andrew Ackerman with with The Washington Post. I wanted
• 1:13:41
  Speaker 22: to ask if you could elaborate on how you think
• 1:13:43
  Speaker 22: about policy in the context of the data drought. Does
• 1:13:47
  Speaker 22: it make you inclined to stick with your plans as
• 1:13:49
  Speaker 22: set out in September in the absence of the data
• 1:13:52
  Speaker 22: that might change your mind, or does it make you
• 1:13:53
  Speaker 22: inclined to proceed with added caution because of uncertainty?
• 1:13:57
  Speaker 3: Yeah, well, well when.
• 1:14:00
  Speaker 13: We face that question, If we face that question, I
• 1:14:03
  Speaker 13: you know, it'll probably be argued both ways.
• 1:14:05
  Speaker 3: Right, But I've said a.
• 1:14:06
  Speaker 13: Couple of times here that you know, if you if
• 1:14:10
  Speaker 13: you really aren't getting information, you really don't know, and
• 1:14:13
  Speaker 13: the economy looks like it's solid and stable and hasn't really.
• 1:14:16
  Speaker 3: Changed, you know, there will be an argument.
• 1:14:18
  Speaker 13: I don't know how persuasive it will be, but there
• 1:14:20
  Speaker 13: will be an argument that you know, you slow down
• 1:14:24
  Speaker 13: in a in an when you can't.
• 1:14:25
  Speaker 3: See as far ahead.
• 1:14:28
  Speaker 13: Others may argue, I mean, I'm not sure where this
• 1:14:31
  Speaker 13: argumentill come. But you're perfectly right that you could also
• 1:14:34
  Speaker 13: argue what things haven't really changed, but you might not
• 1:14:37
  Speaker 13: know that, you know.
• 1:14:38
  Speaker 3: So I don't know whether we'll face this or not.
• 1:14:40
  Speaker 3: I hope we don't.
• 1:14:41
  Speaker 13: I hope by the time of the December meeting we're getting,
• 1:14:43
  Speaker 13: you know, a better flow of data.
• 1:14:46
  Speaker 3: But if we we're going to have to do our
• 1:14:47
  Speaker 3: jobs one way or the other.
• 1:14:49
  Speaker 16: Okay.
• 1:14:49
  Speaker 22: I also just wanted to ask a Finray question. I
• 1:14:52
  Speaker 22: think several years ago you said the overall amount of
• 1:14:54
  Speaker 22: capital system was about right. As the FED moves forward
• 1:14:57
  Speaker 22: with a revised Basle proposal, potentially changes to the chief
• 1:15:01
  Speaker 22: of surcharge, has that changed at all? And or are
• 1:15:05
  Speaker 22: you planning to significantly reduce the amount of capital in
• 1:15:08
  Speaker 22: the system.
• 1:15:08
  Speaker 13: Thanks, So there's the discussions going on, I think among
• 1:15:13
  Speaker 13: the agencies, and I don't want to get ahead of
• 1:15:18
  Speaker 13: those discussions. I continue to think that the level of
• 1:15:21
  Speaker 13: capital when I said that in twenty twenty was about right,
• 1:15:24
  Speaker 13: and of course there's been much capital added since then
• 1:15:27
  Speaker 13: through various mechanisms. But you know, I look forward to
• 1:15:32
  Speaker 13: to I know those discussions are really just getting going.
• 1:15:37
  Speaker 13: They haven't come to the point where they're you know,
• 1:15:39
  Speaker 13: where they're got a whole plan and that kind of thing.
• 1:15:41
  Speaker 13: So I really don't have much to say on that, right.
• 1:15:47
  Speaker 5: I termed Powell Brian Trump with NBC News is the
• 1:15:51
  Speaker 5: weakness in the jobs marketing?
• 1:15:52
  Speaker 1: All right, guys, it looks like we're going to wrap
• 1:15:55
  Speaker 1: on this because Palell normally does he for about thirty minutes.
• 1:15:57
  Speaker 1: He seems to just be moving on for they're on
• 1:16:01
  Speaker 1: Q and A. But really what it boils down to
• 1:16:03
  Speaker 1: is tightening has stopped.
• 1:16:05
  Speaker 2: That was the big narrative for today.
• 1:16:07
  Speaker 1: This will beget or we'll start on will stop on
• 1:16:10
  Speaker 1: December first. And the question is is does easing start
• 1:16:14
  Speaker 1: to play into this? Remember how the Fed goes into
• 1:16:17
  Speaker 1: quantitative easing typically to correct market uncertainty, which may play
• 1:16:21
  Speaker 1: into this toward the end of the year. And again
• 1:16:24
  Speaker 1: a lot of this could be coming in from these
• 1:16:26
  Speaker 1: job losses. Again, data is still not in front of
• 1:16:29
  Speaker 1: Chair Pale in the Fed Governor's one note that is
• 1:16:32
  Speaker 1: interesting right here. Let me go to a couple of points,
• 1:16:36
  Speaker 1: because it is a growing divide at the FED right now,
• 1:16:40
  Speaker 1: and in terms of the next potential FMC one of
• 1:16:44
  Speaker 1: course dissented. We had one governor descent for no cut,
• 1:16:47
  Speaker 1: now that would did not happen, and then one dissented
• 1:16:51
  Speaker 1: for a favor of fifty basis points in.
• 1:16:53
  Speaker 4: Terms of cuts, So clearly a divide.
• 1:16:57
  Speaker 1: And if you look at polymarket right now, the position
• 1:17:00
  Speaker 1: is still holding around sixty nine percent with a twenty
• 1:17:04
  Speaker 1: eight percent up considerably for no change in December. All
• 1:17:08
  Speaker 1: this gets very intriguing on how this plays out between
• 1:17:13
  Speaker 1: now and December. So let me know in the comments.
• 1:17:15
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• 1:17:38
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• 1:17:40
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