[00:01] you the highlights of today's Federal Reserve press conference. So, the Federal Reserve decided to not change interest rates at today's meeting. The interest rates at today's meeting. The rates remains at 3.75%.
[00:13] that they would not change interest rates today, and I won that bet. So, I'm happy about that. Woohoo. Anyways, I want you to take a look at this on page two. And just for your information, and I showed you this in detail like very
[00:26] fine detail in previous videos, that the Federal Reserve continues to print billions of dollars. Like they just they keep on going at it. And right here, it gives the Federal Reserve authorization to print even more
[00:39] money if needed. And of course, they're going to say that it's needed. Okay. Now, let's jump into the video highlights. Okay. Here's the first clip didn't know, Kevin Warsh, who's the I guess the newer chair of the Federal
[00:53] Reserve, when he was coming into the Fed, he had a reputation for being such a tough guy against inflation. Like he's zero tolerance for inflation. Like I'm going to eradicate it. Okay, but listen. What's the situation
[01:06] right now? Inflation's elevated, and what did Warsh do? He did nothing. He up with that, right? Like explain yourself. But rather than explaining show you. It's going to be easier if you just see it for yourself. Please take a
[01:21] >> Hi, Ann Saphir with Reuters. Nice to see you again. Um So, I need a little help here, too. You've you've said repeatedly you have You've you've said repeatedly you have no tolerance for inflation. Um and yet
[01:34] no tolerance for inflation. Um and yet we are seeing above target inflation repeatedly for 5 years and through your term so far. And sure, you have no magic wand, but you have not taken action. You just gave us a little peek at your
[01:48] reaction function as well. You said that if underlying inflation is rising, that you would tend to uh think that you might need to tighten with the exception of the most recent inflation print, that is what we've been
[02:04] seeing. So, could you explain what you mean by So, could you explain what you mean by no tolerance for inflation and what you plan to do about it? >> Sure. So, and I hear from you what I
[02:16] hear more broadly from households and businesses, impatience. Um This is not a This is not an excuse. This is a fact. This FOMC, this board has been in business for 8 and 1/2
[02:31] Um This the the patience the impatience that households and businesses feel have been going on for 63 months. Um We are on the job. We will deliver.
[02:47] We are focused like a laser on making sure we can do it. Um But, the suggestion that we're going to be able to do it with our magic wand is one I want to disabuse you and everyone else of. But, the discussion the last 2
[03:00] days give me more confidence even than I had 8 and 1/2 weeks ago. This team that we have at the FOMC, the support that we have from board staff, and the new hard questions we're asking. We need to resolve those and as we resolve those
[03:15] questions, get smarter on those, we're going to deliver on the remit. Um you >> Okay. I mean, I'm at a loss for words. You straight from the source. He's basically saying that you, me,
[03:29] Americans in general, households were being impatient with their progress against inflation. In other words, he's basically saying, "Just suck it up." Like I That's how I interpreted it. Like I don't know what your thoughts are, but
[03:42] next video clip I want to show you. The reporter says that your job is to bring down inflation. And if that's your job, why are you not taking action? Like what are you waiting for? So, I want to show you what Warsh
[03:56] responds with. Please take a look. >> I'm struggling a little bit with some of what you've said today, and maybe you can help clarify this. Uh you've said over and over again that your job is to bring down prices,
[04:10] target, and that you will hit your target. The market says you're not there yet because they've raised rates. Uh but all you've talked about today is talking
[04:24] about it. And it's not like members of the committee weren't there before you talking about it. So, I guess what the American people might be asking is American people might be asking is what are you waiting for? You know. So,
[04:36] is not all I've done today. Um we have spent an inordinate amount of time in the last two d- two days, two weeks looking at our monetary policy strategy, evaluating our tools, um thinking hard
[04:53] about the sources of data that we have at our disposal and we wish we had. We've also thought hard about the period ahead. What among these questions will be answered with more clarity, certainly not certainty.
[05:07] So, the decision we made today, the discussion we had in that room was the farthest thing from inertia I >> Okay, now I want to show you this video clip. The question is what data or data
[05:22] points is importance to the Federal Reserve for them to make their, you know, brilliant decisions, right? So, you're going to see Warsh say that it's not one data point that they're looking at or he's looking at. He says that he's
[05:34] vague. I mean, to me it just sounds like BS, but I want you to take a look. >> How much do you think not going in July was down to the cool CPI print for June? was down to the cool CPI print for June? >> So, in two words, not much. Not much. Um
[05:50] I'd like to believe that the committee shares my views, which is the historic problem with data dependence is the data and the dependence. We are not relying on any one individual
[06:05] piece of data as cover or as an excuse or as validation. Um what I care about and what I think the committee cares about is trends on Um sure, we got some encouraging inflation
[06:19] >> Now, I want to show you this video clip. I thought this is a very, very good and So, if you didn't know, the Federal Reserve is trying to get the rate of inflation down to 2%. That's their target or claimed targets rates, right?
[06:33] 2% inflation. Okay, so measurements? Because you have CPI inflation, you have CPI core inflation, PCE, PCE core, like which measurement are you using or want to use?
[06:47] So, you're going to see Warsh say that traditionally the Federal Reserve likes to go off PCE inflation, but he says Warsh says that inflation. He's going to be going off a broader
[07:00] broader view and that his secret magic formula is going to be well, he basically says that he's not going to reveal it. He's cards. I think those those were his exact words.
[07:13] great answer." >> Um when you talk about the 2% inflation target, what measure are you relying on?
[07:25] >> Yeah, so I'll give two answers. First, let me give the proper standard answer. The um the Federal Reserve every January outlines a statement of purposes and strategy.
[07:38] And in that strategy document, which I believe was dated January of this year. believe was dated January of this year. It describes measure of PC inflation as the as the objective function there. Um
[07:50] I have enough of my own so that's our number, we're sticking with it. Who knows come after next January what we might say about strategy. I suspect something to add. But I'll say this, some version of the
[08:04] Lucas critique, some version of Goodhart's law in economics should Goodhart's law in economics should remind us that when we talk about measures of inflation or something else and we
[08:17] describe those measures as being consistent with our objectives, we might make them such that they're not very good measures or very good Broadly, if you said to me standing in front of you, I abide fully by the
[08:31] strategy document, we're going to deliver 2% inflation and not a whisper more. But to achieve that, I'm looking at a broader set of inflation data than PCE. So without sort of fully revealing my
[08:46] cards, I'm trying to understand like my colleagues, what's the underlying generalized change in prices that are happening in the economy. It is not a perfect science. Um I might have said 42
[09:00] days ago, I've got a task force for that. But we have a data project that's trying to look and see whether we can't separate the noise from the signal. And so if you would hear a message from me, yes, I care about what the PCE
[09:13] prints are, I care about what the contributions are from CPI and everything else. But my my lens is broader than that, But my my lens is broader than that, even though the remit is quite narrow.
[09:26] >> Mike McKee Okay, if you noticed, Whorst didn't do mean, he really didn't say anything meaningful today either. He just kind of was up on that podium taking up space, like physically and just, you know,
[09:39] wasting our time, taking our time, too. And people caught on to this. The reporters, they caught on to this. So, the reporter asked an awkwardly funny And I want you to take a look.
[09:51] >> Hi, Mr. Chairman. Brian Cheung with NBC News. Um so, conferences when there's news to make. So, today, no change to rates, no forward guidance. For the average household, I guess, what was the news
[10:05] today? >> Um so, apparently it was news that I had a press conference. Um let me just see if I can offer some clarity on that. Between now and year-end, um my predecessors and the Federal
[10:20] this year. I'm committing to press conferences this year. That might be news to people in this room and of no particular interest to your viewers and your in in in in your readers back at home. Um
[10:33] what I can offer as as assurance is that um the Fed's on the case. That this Fed chairman feels better about this board and this committee's
[10:45] showed up here on the first day. And I showed up pretty confident. Um I've been received. >> Okay, so no change to interest rates, no forward guidance. They continue to print money. What's new, right? Nothing.
[11:00] point of today's press conference? Like I I've no idea. Like I'm asking you All right, so listen, this press conference was 45 minutes long. I think So, I guess I saved you 35 minutes. That's the bright spot.
[11:15] the support and wish you a very nice day. Take care.