FOMC Crypto Trading Guide — Full Breakdown & Transcript

[00:02] Good afternoon. All right, we are here right on  time for the Powell FOMC speech. If you are new   to the streams, we trade these. We look at the  crypto markets and we also do the mention markets   on Kalshi. So, right on time today and we don't  have to wait an hour for President Trump to come  

[00:17] bless us with his presence like we did yesterday.  We're going to just skip the intro and roll right   into the speech today. While job gains have  remained low, the unemployment rate has shown   some signs of stabilization and inflation remains  somewhat elevated. In support of our goals,  

[00:33] today the Federal Open Market Committee  decided to leave our policy rate unchanged,   having lowered our policy rate by 75 basis points  over the course of our previous three meetings.   Yeah. So, if you guys missed it, there is no rate  cut this time around. Rates are staying the exact  

[00:49] same maximum employment and 2% inflation. Don't  know what that's really going to do to the market.   We just need to hear Powell's tone during this  week. Economic developments. Available indicators  

[01:01] suggest that economic activity has been expanding  at a solid pace. Consumer spending has been   resilient. Also, for those just tuning in, I'm  taking some long shots. I'm on President: No. I  

[01:14] am on Shutdown: Yes. Which he already said, which  is great. I'm on Layoff: Yes. Because layoffs have   been happening tremendously across the board. I'm  on Pandemic: Yes. Projection: No. Beige Book: No.  

[01:27] Consumer Confidence: No. And Trump: No. Those are  my positions across today. And we already hit one   of them with a yes on shutdown. So, let's tune in  to Powell. What's going on everybody in the chat?  

[01:39] Leave your questions, comments, any trades you're  on. And hopefully Mr. Powell is back. Declined at   an average pace of 22,000 per month over the last  3 months. Excluding government employment, private  

[01:52] payrolls rose at an average pace of 29,000 per  month. A good part of the slowing in the pace of   job growth over the past year reflects a decline  in the growth of the labor force due to lower  

[02:04] immigration and labor force participation. Though  labor demand has clearly softened as well. Other   indicators including openings, layoffs, hiring and  layoffs. Let's go. That was my biggest position of  

[02:17] the stream actually. I had 200 shares of layoff.  Inflation has significant fantastic but remains   somewhat elevated relative to our 2% longer run  gold. Long on gold. Yeah, I actually think the  

[02:30] metals run is just going to continue as crazy as  it sounds. That total PCE prices, I don't think   it's going to slow down anytime soon over the  12 months ending in December. And that excluding   the volatile food and energy categories core PCE  prices rose. Why is this not updating election in  

[02:48] the goods sector which has been boosted by the  effects of tariffs? In contrast, disinflation   appears to be continuing in the services sector.  Near-term measures of inflation expectations have  

[03:00] declined from last year's peaks as reflected  in both market and survey-based measures.   Most measures of longer-term expectations remain  consistent with our 2% inflation goal. My long  

[03:14] shot here is president. I'm going to lose it,  but if we hit it, it's a 4 to 1 for the American   people. At today's meeting, the committee  decided to maintain the target range for the   federal funds rate. What's up, Mumo Evans? Good  to see you as always. In the prediction streams,  

[03:29] always a mainstay. Since last September, we've  lowered our policy rate 75 basis points or 3/4 of   a percentage point, bringing it within a range of  plausible estimates of neutral. This normalization   of our policy stance should help stabilize  the labor market while allowing inflation  

[03:45] to resume its downward trend toward 2%. Once the  effects of tariff increases have passed through,   we're well positioned to determine the extent  and timing of additional adjustments to our  

[03:57] policy rate based on the incoming data, the  evolving outlook, and the balance of risks.   Monetary policy is not on a preset course, and we  will make our decisions on a meeting-by-meeting  

[04:09] basis. Bitcoin's not really reacting to this.  I'm also monitoring the Bitcoin chart just to   see if there's any rhetoric that he says that  maybe moves the market in some sort of fashion,   but as of right now sustainably to our 2% goal  and keeping longer-term inflation expectations  

[04:25] well anchored. Our success in delivering on these  goals matters to all Americans. We at the Fed will   continue to do our jobs with objectivity. I'm  going to add more shares on my projection. I   went kind of small on projection, but I do really  like projection here. I'm going to grab 50 more  

[04:41] shares of projection: No. Hi. Chris Rugaber at  Associated Press. Thank you. I wanted to ask  

[04:53] that you know you attended the Supreme Court  hearing last week on the Lisa Cook case. And   Treasury Secretary Scott Bessent criticized that  as political. Can you say why you attended and   what you would say in response to the secretary's  criticism? I think it's surprising. Let me start  

[05:08] with I that there's a subpoena strike. I don't  think he's going to say subpoena, but the no price   is just way too heavily favored to even take. But  he's not going to talk about his own subpoena. And   even if someone asks about it, he's just going to  be like, "No." Case is perhaps the most important  

[05:23] legal case in the Fed's 113 year history. And I,  as I thought about it, I thought it would might be   hard to explain why I didn't attend. In addition,  Paul Volcker went to a Supreme Court case famously  

[05:36] in I guess 1985 or so. So, it's precedented and,  I thought it was an appropriate thing and I did   it. Great. And then just quickly follow on, the  job market. You mentioned last month that the  

[05:51] household survey might be distorted. And you also  mentioned the potential for over-counting jobs   which would suggest that we're still in a negative  hiring pace. So do you I had restricted but I did  

[06:06] take a 96 loss on that one. I just lost a little  bit of confidence going into it have stabilized.   Thank you. So yeah really two questions. One  is so we're we're getting through the the  

[06:18] distortions in the data from the shutdown. What  however big they were in November they're smaller   in December. So we're getting to a place where  they're no longer material. They're still there,   but it's a tweak here and there. The reason why  we why we changed the statement, let me pull it  

[06:34] out. Take probability: No. I'm on projection and  probability. I kind of feel like downside risks to   employment rose in recent months. So, we saw, you  know, data coming in which suggests some signs of  

[06:47] stabilization. I wouldn't go too far with that,  but some signs of stabilization. There also some   signs of continued cooling. And so we thought that  was no longer an accurate description of the data.   In addition, the outlook for economic activity has  improved clearly improved since the last meeting  

[07:05] and that should matter for for labor demand  and for employment over time. So for those two   reasons, we thought we would take that language  out of the statement. And Bitcoin's actually taken   a little bit of a dive over the last hour from 90k  to the low 89. Not a crazy move, but something to  

[07:23] take note of. Generally avoided engaging with  political controversies directly and the video   statement on January 11th was a departure. What  made this different and are you concerned it   could draw the institution further into political  debates? So today on I'm simply going to refer  

[07:41] you to the statement that I made on January 11.  I'm not going to expand on it or repeat it. So,   I'm just not going to, this is really about the  press conference and and the economy and what  

[07:53] we did today, but and some ancillaries, but I'm  not going to be getting into that. What we did   today did nothing, Mr. Powell. You kept rates  the same, man. I have nothing for you on that   today. Keep lowering those interest rates for  us. Michael McKee from Bloomberg Radio TV. Have  

[08:10] you made a decision and whether you would remain  as a governor of the Federal Reserve? And if so,   would you tell us what it is? And if not, when  might we anticipate a decision? Uh, no. A governor  

[08:23] of the Federal Reserve. We really once again have  nothing for you on that today either. I honestly   should have taken subpoena at 82. It's 97 now on a  no. Why would he talk about his own subpoena even  

[08:36] if he's not something I'm there's a time and place  for these questions and but not not something   I'm going to be getting into today. There it  is. Thank you. Um times thanks a lot for for  

[08:52] taking my questions. In another one that might,  you know, lead to a similar answer. We've seen   quite why on earth would he have that? I should  have gone on. What do you think is driving the US  

[09:08] currency lower? And have you been at all concerned  just by the extent of the volatility we've seen   this week? Thank you. So, Claire, as you probably  know, you know, we we don't comment on the dollar   really. The administration, especially the  Treasury Department, has a job of oversight over  

[09:24] over the the currency and so and exchange rates  and all that. We don't comment on that. It's not   our not our role. So I have nothing for you. But I  mean, what's your view on the market movements? I   mean, what do you think behind them? Is it asset  managers diversifying? Is it Yeah, I just don't,  

[09:40] you know, we don't we don't talk about the dollar.  We don't talk about what moves it around. We don't   talk about the dollar. It's not appropriate for  us to do so. Really the Treasury Department has   that. It's their their role, their bailiwick, and  and we stay off it. We do monetary policy and some  

[09:55] other things, but we don't we don't comment on  the dollar. Sorry, we don't comment on the dollar.   Jerome obviously no SEP in this meeting,  but in light of the slight firming up of  

[10:08] for any further rate cuts is pushed back compared  to what people might have thought in December?   Well, first of all, if if you look at the incoming  data since the last meeting, clear improvement in  

[10:23] the outlook for growth. The the data have come  in and sentiment, the Beige Book, everything   comes in suggesting that this come starts off on a  rinsed us for 75 there. Inflation performed about  

[10:36] as expected and as I mentioned, some of the  labor market data came in suggesting you know   we're evidence of stabilization. So it's overall a  stronger forecast really if that's your question.  

[10:50] I'm not sure I answered your question. But but  in terms of timing or pacing of any additional   easing. So we we haven't made you know what what  we what we'd say about this was that after this   meeting after the three recent rate cuts we're  well positioned to address the risks that we face  

[11:06] on president. I'm more active monitoring and we'll  continue to make our decisions meeting and profit   right now. The outlook and the balance of risks.  Haven't made any decisions about future meetings,  

[11:19] but you know, the economy is growing at a solid  pace. The unemployment rate has been broadly   stable and inflation remains somewhat elevated.  So, we'll be looking to our goal variables and   letting the data light the way for us. Steve.  Steve Liesman, CNBC, and sticking with questions  

[11:38] you might answer. Thank you. You had previously  I believe described the current policy rate being   at the higher end of neutral and if you look at  the longer run the SEP and the longer run rate 16  

[11:54] of 19 officials go in on AI here. Yes, he always  brings up AI in the Q&A at some point still in a   process of bringing it down towards a middle range  of neutral and what would it take to get there?  

[12:06] So, I the count I did was that four of the 19  were at or above that. Maybe I missed by one,   but I thought I thought it was four. And  if you look at the the dealer survey,  

[12:19] it was 10 out of 58 where we're at or above. So,  you're right. It's it's it's the high higher end   of the range. What we say is it's it's within  the range of plausible estimates. This is this   is the higher end of that range, but it's in so  for some people, they think it's it's neutral,  

[12:34] I think. And many of my colleagues think it's  hard to look at the incoming data and say that   policy is significantly restrictive at this time.  It may be it may be sort of loosely neutral or it   one knows with any precision. So you had a  follow up. I get what you're saying, but are  

[12:58] some officials have described the Fed being in a  a mode of bringing it down eventually over time.   Are you still in that mode or is this a place to  hang out? Yeah. No, I I I would say if you look at  

[13:10] the SEP from from December, you most people had  additional normalization, but at the same time,   we've done a lot of the process of normalizing. A  good piece of it is done with 75 basis points and  

[13:22] before that 100. It's 175 basis. I built up to  100 shares on each probability and projection:   No. So, you've moved Consumer Confidence: No as  well. I have 50 on is running. I'm not going to  

[13:35] add to that %. So, you've moved a good way and  we think we're well positioned here to watch how   the economy performs, look at the data. We're not  making decisions about future meetings, but we we  

[13:47] do think we're well positioned after those three  cuts to to let the data speak to us. Thank you,   Chair Powell. Jeanna Smialek from Bloomberg News.  To what extent did the did the committee discuss  

[14:00] the possibility of cutting at this meeting or  in March? And how are you all thinking about   the conditions that would merit another rate  cut? Is there broad agreement on the on the   committee about what it would take? So there was  broad support on the committee for holding today  

[14:17] broad I would say including among non-voters. So  that's where that was. Of course something and   Bitcoin still printing a couple red candles on the  hourly committee during this broadly for for for   holding today. We're not trying to articulate  you know a test for what for when to next cut  

[14:36] or whether to cut at the next meeting. You know,  what we're saying is we're well positioned as we   make decisions meeting by meeting, looking at the  incoming data, evolving outlook and all that. And  

[14:48] you know, we're in a position where we have to  we still have some tension between employment   and inflation, but it's less than it was.  I think that the upside risks to inflation  

[15:00] and the downside risks risks have probably both  diminished a bit. So, you know, we'll be looking   at that. But it's about how you weigh the risks  to the two goals and and and how big those and   forward as the data evolve. Thank you. Thank you  Mr. Chairman Edward Lawrence from Fox Business.  

[15:24] Has the effects of tariffs already moved through  the economy on prices? A lot of it has. So,   keep the word projection and probability out of  your mouth. And and they're all highly uncertain.  

[15:36] But most of the overrun in goods prices is from  tariffs. And that's actually good news because if   it weren't from tariffs, it might mean it's from  demand. And and you know, that's that's a harder  

[15:49] problem to solve. We we do think tariffs are  likely to move through and be a one-time price   increase. So most of the overshoot if you if you  were to take that out you'd get and you would I  

[16:01] mean inflation core PCE inflation is running just  a bit above 2% excluding the effects of tariffs on   goods and the other good news is if you look away  from goods and look at services you do see ongoing  

[16:13] disinflation in in all the categories of services.  So that's a healthy development. So that's what's   going on. The expectation is that we will see the  effects of of tariffs flowing through goods prices  

[16:28] peaking and then starting to come down assuming  there are no new major tariff increases that   that are begun. And that's what we expect to see  over the course of this year. If if we see that   if the if we see that that would be something that  tells us that we can we can loosen policy. Also,  

[16:44] if we see something that suggests that the labor  market is not stabilizing, that in fact it's the   downside risks reemerge or or the data just get  worse, we'd have to look at both of those. We have   a two-sided mandate. If I could, if President  Trump does pick a new Fed chairman before May,  

[17:00] what does that look like? How would you work with  that transition period look like? I don't have   anything for you on that. I you know it stats  will depend on on Congress's actions and things  

[17:12] I I can't speculate on. Hell yeah. Huge dodge  Powell. Love this. Howard on no president and no   Trump major dodge on that question all you've said  so far. Is it is it fair to describe risks to your  

[17:26] to both sides of the mandate as roughly balanced  right now? And is the next move necessarily down?   I'd say that the the upside again the upside  risks to inflation and the downside risks to  

[17:41] risks to employment have diminished but there  they still exist tension between the mandates. I   could miss out on a little profit. But that really  scared me. Hard to say. I'm probably going to take  

[17:55] profit on my president position here. I'm going to  go ahead and do that. Actually secure my discussed   there and you know we'll just have to see how  the data lead us. I'm wondering you you you a  

[18:08] minute ago you said you felt expectations were  consistent with your with your mandate that the   two and the 10-year breakevens have moved quite  notably in the last couple of weeks I believe. Is   there any concern on that front? I mean, the I I  recently looked at at all all of the both survey  

[18:26] and market-based short-term inflation expectations  have come way down. You know, they they they were   in a good place at the beginning of last year.  They spiked around Liberation Day and now they   fully retraced in and Bitcoin continues to print  still in the red on the last two hourly candles  

[18:44] and on the 15 minute candles. We are looking at  a green candle actually ever since we hit this   hourly low at 88% inflation. Something to keep  an eye on is that Bitcoin price movement. Andrew.  

[19:00] Apologies if this is a little bit repetitive,  but in the past you've said that the reason you   cut rates was that the risk to the labor market  was greater than the risk to the inflation side.   Is that still true? You know, we haven't made  You're right. We we this could be we saw the  

[19:17] labor market weakening and we acted and regarding  labor, you know, we will always act to to address   what we see as the economy moving away from our  goals. Risks to both of the variables are a little  

[19:33] less. I think that the upside risk to inflation  again a little bit less and the downside risk to   employment a little less. I just would say that  I I'm not making a judgment about how, you know,  

[19:46] one of them is more at risk than the other, just  that the risks to both of them have diminished.   Okay. Thanks. BIS wrote a paper last summer which  concluded that global investors were hedging their  

[19:58] dollar exposures in ways that previously they they  hadn't because of policy uncertainty. Do you agree   with BIS? We really don't see much at all about  that. That whole that whole story. There's just  

[20:10] not a lot of data that that suggests that there's  much to that. Thanks. Anna Swanson with the New   York Times. Can you talk more about what you would  need to see in the labor market to conclude it's  

[20:24] time to resume easing? Do you need to see further  deterioration in the labor market or would it be   enough for inflation to soften? So, we'll always  be looking at both things. And so, there could be  

[20:36] combinations, infinite numbers of combinations  that would cause us to want to move. Certainly,   a weakening labor market would be an argument for  loosening. But what's happening with inflation?   If inflation were at the same time getting worse,  you know, you just you just have a very difficult  

[20:49] situation there. So, we'll be looking at both.  Clearly, a week after he's done answering this   question, I'll rattle off what I'm still pending  on my position. The rates are in a good place.   We'll have to be making similar judgments too on  inflation though. And if inflation does pick back  

[21:04] up and the labor market doesn't show further signs  of deterioration, is it there a chance that you   could raise rates rather than simply remaining  on hold? What would you need to see? Don't say   you're going to raise take things off the table,  but it isn't anybody's base case right now,  

[21:17] anybody's base case that the next move will be  a rate hike. But, you know, ultimately we'll do   we'll do what we think is the right thing. But  that's that's not where people's expectations   are right now. Okay, so I'm still pending: Yes AI,  no Consumer Confidence, no Descent, yes Pandemic,  

[21:37] no Probability, and no Projection. Those are the  positions I still have that have not resolved at   this point recently in part due to concerns over  their their fiscal and and long-term economic   outlook. So do you worry that the US could at some  point find itself in a situ similar situation to  

[21:54] Japan whether for fiscal or demographic reasons?  You know, over time you've seen that US rates   have remained pretty they haven't moved a lot  really for a while, but they haven't moved a lot   because of what's been happening in Japan. So  it's more of an overtime thing. The US federal  

[22:12] budget deficit is, you know, uncontroversially on  an unsustainable path. The level of debt is not   unsustainable. It's very much sustainable, but the  path is unsustainable. And the sooner we work on  

[22:24] it, the better. But you know right now the we're  running a very large deficit at essentially full   employment and so the fiscal picture needs to be  addressed and it's not really being addressed. So  

[22:37] that's important. I I I'm not in anyway connecting  it to some sort of near-term market event, but   ultimately it's something we'll have to deal with  and that you know in the end in the endgame that's   that's where you wind up is in some kind of a  difficult thing. But that's that's not where we  

[22:52] are. It's not what Japan is either. But not going  to close out pandemic. I feel like you can still   mention something is better than it was since  the pandemic or something like that. Overall,   not really budged that much. I I wouldn't  say that. You know, the thing is um I mean  

[23:07] technically higher longer-term rates means less  accommodated financial conditions, but remember   many many things move longer term rates. It's not  and it's not mostly what happens on the short end.  

[23:19] There can be effects of longer term rates from our  moving our policy around but you know it's much   more you know assessments of the fiscal path and  fiscal policies and and risks and things like that  

[23:32] take an $18 loss on it and let my wins roll that  over policy rate over the course of a year and   over the course of that year the tenure is exactly  where it started so it's not there's not a tight  

[23:46] link between you 10 years and the overnight rate.  Elizabeth, thanks so much. Elizabeth Schulze with   ABC News. Republican Senator Thom Tillis,  who sits on the Senate Banking Committee,  

[24:00] said he will block any Fed nominee, including  the chair, until this investigation into you is   resolved. Do you support this move by the senator?  And what conversations have you had? I don't think   he supports anything involving investigation  into him. I mean, come on now. Broadly, what  

[24:14] would happen to American households if the Federal  Reserve loses its ability to operate independent   from politics? So really the the point of of  independence is not to protect policymakers or  

[24:28] anything like that. It just is that every advanced  economy democracy in the world has come around to   this common practice. It's just an institutional  arrangement that is that is served the people well  

[24:42] and that is to to have a separation between  to not have direct elected official control   over the setting of monetary policy and the  reason is that and Bitcoin is now printing  

[24:54] a fat green candle 15 minute chart in a way that  will be political this isn't the US context this   is every advanced economy democracy of any size  so it's a it's a good practice this it's pretty  

[25:08] much everywhere among among countries that look  at all like the United States and I think if you   lose that it's first of all it would be hard to  restore the credibility of the institution if   people lose their faith that we're we're we're  making decisions only on the basis of our of  

[25:27] our assessment of what's best for for everyone  for the for the wide public rather than trying   to benefit one group or another. If you lose that  it's going to be hard to retain it and we haven't   lost it. I I don't believe we will. I certainly  hope we won't, but it's very important. And the  

[25:41] reason it's important is that it's enabled  central banks generally not to be perfect,   but to serve the public well. You're confident it  can maintain that independence at this point. Yes.  

[25:53] I mean, I'm strongly committed to that and so are  my colleagues. Archie. Thanks Archie Hawk from The   Economist on that sort of stabilization of the  labor market question. How much do you see the  

[26:07] weakening we saw over the past six months year as  a kind of data mirage around immigration and the   government shutdown and so on that's now resolved  or how much have we seen a kind of real underlying   firming up in the state of the labor market do  you think? Well, part of it is to your point,  

[26:23] part of it just is that that labor supply, growth  in labor supply has give me AI essentially a halt   from all this labor talk. AI is one of the biggest  threat to it growth over the last couple of years  

[26:37] driven by immigration and then that the halt being  driven by a very sudden stop in immigration. So   many outcomes were possible with that. You know  supply came way down. Turns out that demand for  

[26:50] labor also came down a very similar amount,  maybe just a little bit more, which is why the   unemployment rate has gone up. So I don't know  whether that's a coincidence or not, but that's   that's what's happened with with that part. But if  you look at other things like for example the just  

[27:07] to pick a couple the Conference Board's measure  of job availability that came out I don't know was   it yesterday or today but you know it shows ser  it's a survey showing that that workers feel like  

[27:19] job availability is it's a very low reading just  one reading but it's an indication of softening   people part-time for economic reasons which  is a category within the broader U6 category  

[27:32] measure has moved up significantly. So there  there are lots of I could go on and on. There   are lots of little places that suggest that the  labor market has softened. But part of but you're   right part of payroll jobs softening is that both  the supply and demand for labor has softening have  

[27:49] come down. So that that makes I didn't take  that trade. Time to read the labor market. I   was thinking I was thinking one of these other  ones projection probability. Okay. Is that full  

[28:01] employment? In a sense, it is. If if demand and  supply are in are in balance, you know that you   could say that's full employment. I'm fighting  this profit line all because he said the silly  

[28:13] book thing one time. You know, if we can come out  of this and quite unusual on my nose, we will be   in profit. One more on growth and the kind of  strong growth outlook. That's what's going to   be the key is my nose. Much of that is the fiscal  stimulus we're seeing from the beautiful bill, the  

[28:28] tax cuts and and all of that. So, you're seeing it  already. You don't have much of the fiscal I think   the outlook, you're right, it's it's financial  conditions and it's it's fiscal policy for 26.  

[28:41] But, you've got strong consumption that's been  happening before financial conditions have been   supportive, but before the fiscal effects really  are shown. Essentially the economy has once again  

[28:54] surprised us with its strength not for the first  time. And you know consumer spending although it's   you know it's uneven across income categories but  consumer spending overall numbers are good and  

[29:06] we're benefiting from the you know from the AI  buildout that's that's another benefiting from   the economy AI is huge growth is one more of our  yeses that really could turn it around as well  

[29:21] three of our four yeses have hit only waiting  on pandemic sound really negative how would say   something hasn't been this way since time between  downbeat surveys and you know reasonably good  

[29:34] that's big let's go. Thanks Chair Powell Christine  Romans from NBC News you talked about how consumer   spending is uneven the president calls inflation  defeated and solved the FOMC says it's a somewhat  

[29:49] elevated inflation but you talked about those  customer survey or those consumer sentiment   surveys and public opinion polls that show that  most families the cost of living is still issue   number one. The conversation around the table with  your colleagues about how wealthier consumers seem  

[30:07] to be driving so much of the economy and why so  many families still feel like they just can't make   ends meet after 5 years of rising prices. What is  that discussion like? So, a couple things. One,  

[30:20] there's something something to it in in that we  know that honestly just did a bond in Bitcoin.   You put 10 grand on real estate tend to own stock  of securities and those assets have been going up  

[30:33] in value. That's what bond is free spending over  time. So, and that's that's clearly a part of   the story. We also know that for some time now  for you know a year or more we've been hearing  

[30:46] from it's also just crazy seeing how mainstream  it's gotten guys I'll show a tweet after this too   but look how the money flow on the order book  here on the left side just every single second  

[30:58] just thousands and thousands of dollars coming in  trading down from brands and they're buying less   and it's changing their buy this is we're not  trading crypto here we're not trading options   on Powell speaking we're trading mention. And  there's $3.3 million in volume on this. I mean,  

[31:13] this is the future of trading happening right in  front of our eyes on affordability. We, you know,   we have a vast network through the reserve banks  and also through the board of governors where we   talk to small and large businesses and and  households. And so we do hear a lot about  

[31:30] affordability and we take we take that very  seriously and we take it to heart because,   you know, our job is one of our jobs is price  stability. And so, you know, the the best thing we   can do for for people who are feeling that squeeze  is to keep inflation under control and, you know,  

[31:45] frankly, to finish the job of getting inflation  back down to 2%. You mentioned the AI buildout as   being positive for the economic growth this year.  I wonder as you look at the weakest year last year   for job creation of a nonrecession year since like  2003, are you concerned about AI maybe supplanting  

[32:02] more entry-level work and entry-level jobs? And  how does that play into your what you're watching   about the labor market? You know, so everyone  of course is watching AI and the deployment   and you know trying to understand exactly  what's happening. And there's a wide range of  

[32:19] possibilities. It's it's hard to say. We're and of  course anyone who uses it is amazed at 20 shares   off being able to sell for my profit here. Every  tech incoming will eliminate some jobs. Yeah. I  

[32:32] mean the chart's kind of just doing some rubbish  stuff right now. Couple of printed wave after wave   after wave. I can't say that long-term technology  increases productivity which is a basis for rising   wages and it may not all happen immediately but  over time it's what it's what enables incomes to  

[32:49] rise over time is rising productivity. So will  and we always ask well this this is going to be   different you know is is it going to be different  and we we don't know and we may in any case see in  

[33:01] the short term jobs that are being eliminated  by the capabilities of AI we may see that   we just don't know what the overall effect is  going to be so how to think about it in ter I   feel like he's going to wrap this up pretty soon  he usually goes between about 30 and 45 minutes  

[33:17] maximum he's been up here for about 33 minutes  connection it appears between the low at least   it didn't keep us waiting like ads and AI but  it's not that the main or only driver. You hear  

[33:33] large companies though saying many of them saying  that they either won't be hiring for some time or   that they're hiring less or that they're laying  people off and they they tend to refer to AI when   they when they do that. So, we're all watching and  learning and it could could certainly have pretty  

[33:49] significant effects on the economy, the workforce,  and our society. We don't really have the tools to   address the concerns that may arise, but we have  a lot of people who who focus on analyzing it and  

[34:02] try to try to understand what the macroeconomic  implications are, which which is our job. Behi,   thank you, Chair Powell. Behi from AFP news  agency. You mentioned earlier that on inflation  

[34:18] the broad expectation was for a one-time price  increase and then for inflation to come down and   I was wondering you know is your expectation still  for inflation to start cooling in the second half   of 2026 and you if you could elaborate how far  we are from target currently. Thank you. I'm not  

[34:35] feeling great about pandemic. I probably should  have just closed in that negative remarks where   we had 3% 3.0% 0% core inflation right now over  the 12 months ending in December and that's pretty   much what we had the year before. So on net no  progress but the story behind that is is modestly  

[34:52] positive in that most of the overshoot was in  goods prices which we think is related to tariffs   and ultimately we think those will not result in  inflation as opposed to a one-time price increase.   Okay. So that's that's where where it is in terms  of if you asked so no one thinks they they will  

[35:12] you know ex-ante understand really clearly  precisely when this will happen but there's   an expectation that sometime in the middle  quarters of the year we'll see close out my  

[35:24] Consumer Confidence inflation topping out. So what  we do is we when when a tariff is put in place we   track the effect of those tariffs over a six seven  eight nine month period and you can see and then  

[35:38] you can see for that tariff how long it takes to  reach a place where it's it's affected the price   level and that's it. So we're getting better  at that and and our estimate is that it'll be   sometime in the middle of the year but I wouldn't  look for great precision in that absolute rubbish  

[35:53] that just moving in that direction. That one got  cheap. That one got so cheap on the charts. Tariff   inflation graph. Thanks Powell. I'm opened up  really high. I want to look outside the US.  

[36:08] What's happening outside. Prime minister said last  week that there's been a rupture in the global   order and I wonder how you're thinking about  geopolitical risk as it relates to the US economy.  

[36:21] So I I can't I can't comment on on that speech  or statement or anything like that. You know   geopolitical risk for us is a lot of it is around  energy oil and so far we haven't you know with all  

[36:34] for all the turmoil we really oil prices are have  come down as you know and and so we don't really   see much you know longer than that it's trade and  you know the the trade the economy our economy  

[36:48] has has pulled through pretty well you'd have to  say given the very significant changes in trade   policy US economy has has pushed right through.  Partly that is that the the the way that what  

[37:00] was implemented was significantly less than what  what was announced at the beginning. In addition,   other countries didn't retaliate. And in addition,  a good part of it hasn't been passed through   to consumers yet. It's being it's being taken by  companies. I mean, we're skating pretty good right  

[37:14] now. It'll be big if we can just cruise by wrap  it up Powell. Get us out of here with our nose.   That's what we're really hoping for here. Thank  you Chair Powell Jennifer Schonberger with Yahoo  

[37:26] Finance with third quarter GDP growing at 4.4% and  the fourth quarter expected to have a five handle   on it as to what the Atlanta Fed is predicting at  a time when you had a government shutdown and we  

[37:39] thought that was going to shave off some growth.  You've also got the fiscal tailwinds you've   talked about big tax refunds coming potential  tariff dividend. How could you cut rates which  

[37:52] isn't great? Like I feel like the second Powell  stops talking here, we're probably going to do   that's just my opinion. You know, it would dep it  depends on how fast potential output is growing,   right? I'm just asking in principle. I'm not you  know, I'm not saying this is what's happening,  

[38:06] but you know, there's growth and there's how fast  the potential is growing. And at a time of of   you know, high productivity growth, potential  output is rising. So it really matters whether  

[38:19] potential output is growing as fast as actual  output. And and it would matter over time. The   numbers you cite were for quarters and quarterly  GDP is you need to look at 12 months because   quarterly G GDP can be very lumpy. You know,  GDP was negative in the first quarter last year.  

[38:34] So the overall over the year, the numbers were  nothing like that. You know, it was more in the   mid-2s for the year. And how do you explain the  divide right now between strong economic growth  

[38:46] and the job market? Is it productivity that's  filling the gap? And is productivity being driven   by AI at this point? So we there has been you're  right there has been a divide of solid growth but  

[39:00] what looked like a weakening labor market and that  can be explained by by rising productivity. But   I would say we we do see signs of certainly  of the of the unemployment rate stabilizing.  

[39:17] So it may be we're seeing the beginning of  the resolution of those two things. Also, as   you probably know, the the lore is that when GDP  and and the labor market get into argument, I'm  

[39:29] going to let Pandemic run. He says it doesn't hit  all of our other hard to collect and understand,   but nonetheless, I think we we may be seeing that  that tension resolving a little bit. Too soon to  

[39:42] say with any confidence, though. Matt Egan. Matt  Egan with CNN. Chair Powell, after today, you have  

[39:54] two meetings left as Fed chair. You've obviously  experienced a lot during your time as Fed chair,   served under multiple presidents. I'm wondering  what advice you have for whoever your successor  

[40:06] might be. Honestly, I'd say a couple of things.  One is um you know stay out of elected politics.  

[40:18] Don't get pulled into elected politics. Don't  do it. And that's that's another question. He's   asking for advice for the next Fed chair. You  know, our window into democratic accountability  

[40:32] is Congress. And it's not a passive burden  for us to go to Congress and talk to people.   It's an affirmative, regular obligation. If you  want democratic legitimacy, you earn it by your  

[40:47] interactions with the our elected overseers. And  so, it's something you need to work hard at. And   I I have worked hard at it. So, and the last thing  is, you know, it's easy to it's easy to criticize  

[40:59] government institutions so many ways. I will  tell whoever it is, you're about to meet the most   qualified group of people you not only have ever  worked with, you will ever work with. And when   you meet Fed staff and not everybody's perfect, is  this gonna be like the last question. The advice  

[41:20] than work at the Fed? Thanks for that answer.  If I may follow up, as I'm sure you've noticed,   gold and silver prices have experienced historic  gains here. And I'm wondering how much attention,  

[41:32] if any, you pay to those moves and and what  message you may take from these significant   price increases we've seen for precious metals.  Don't don't take much message macroeconomically.  

[41:45] The argument can be made, you know, something  you look at where inflation expectations are,   our credibility is right where it needs to be.  So we look at those things. We don't we don't  

[41:58] get spun up over particular asset price changes  although we do we do monitor them of course.   Nicole for the last question. Last question.  Where's my pandemic? I'm closing that one for  

[42:13] whatever I can get out of it. Economic models  are are somewhat backward looking but should be   more forward looking incorporating things like  productivity whatever. How do you incorporate  

[42:26] current and future developments into your analysis  and decision-making? And do you have a an answer   to those critics? Yeah. So, by and large, those  criticisms, as somebody on the inside, they just  

[42:40] don't make sense. And I'll tell you why. He just  buzzer beatered projection. Are you kidding me?   Writes down a forecast every quarter, right? The  summary of economic projections. And that's the   basis for how we think about the economy. So at  the very end projection you know what an economic  

[42:59] model can do is it can grind up all the data for  the last number of years 50 years let's say and it   can it can identify what are the relationships  between variable and all that kind of thing  

[43:11] holy absolute rubbish and it can tell you if you  change one of those variables this is what should   happen in the macroeconomy that's just the way it  works however the structure of the macroeconomy   is constantly changing for example we hadn't had  a pandemic in 100 years. It wasn't in the model  

[43:26] and we knew it from the very beginning. It was not  in the model. A trade war of this literally a 60   second difference in me being able to hit that  and the swing that I lose and so there's great   uncertainty projection on the last question.  That's craziness. Another thing I'm gonna get  

[43:42] out of here with like a $30 when it comes to  this fiasco technological developments that   raise potential output, some kind of technological  renovation like like happened in the 90s here and  

[43:56] like maybe happening now with AI. We're all over  that. And, you know, we everyone studies those   periods and, you know, we're very clear-eyed about  the possibility that this higher productivity may   persist and also that it may not. You know, we  we're not no one's sitting here unaware of the  

[44:13] possibility of higher productivity. We've been  talking about it for three years. It it long   predates the current situation. It's been going  on for five or six years. We've had productivity   higher. We've been talking about it that whole  time. So, it's very much on our minds and we we  

[44:26] are well well aware that higher productivity means  higher potential output and it changes the way you   think about potentially inflation, growth, labor.  Got a cheat sheet of words to say and not. Yeah.   This last one, he's striking a ton of using better  models print. Where are they? We'll take them. But  

[44:44] I think, you know, we we certainly are in contact  with anybody who does economic modeling and and   we're always looking to do better at that. But  that's how I think about that. And just a quick   follow-up, we've been talking a lot about tariffs  and passing through and we've been talking a lot  

[44:59] about them for the past few months. You know, the  trade landscape is still in a constant state of   flux. Announcements, threats, negotiations,  they're all frequently changing. So, I'm   wondering how you actually track these, how what  data channels are most critical to follow this in  

[45:15] real time. Trade. Yeah, the impact of tariffs  and how they're changing. Yeah, I I think our   staff has done a really nice job on that and and  they've kind of put it together in real time. So,  

[45:27] as I mentioned, a tariff gets put in place. You  can pretty much track its effects on pricing and   on everything and and so you build up build a  model up from all of the all of the tariffs. At  

[45:39] the beginning, it was very much of a forecast.  Now, it's it's every every cycle that goes by,   it becomes more informed by actual data. And, you  know, we were we our forecasts were not far off.  

[45:53] What changed was as I think I said earlier  what changed was what was implemented was   smaller than what was announced in retaliation  internationally people did generally expect that  

[46:05] we saw that in the past and that really mattered  too and then the other thing is that pass through   didn't know how much exporters would take how  much it companies in the middle would take and  

[46:18] how much the consumer would take and it turns out  it's a lot of companies in the middle who by the   are pretty strongly committed to passing the rest  of it through, which is one of the reasons why   we need to keep our eye on inflation and not  declare victory. It looks like he's wrapping  

[46:31] this thing up because a lot of these are going  to one percenters. We're done. We're done. Okay,   we're done. Thank you very much. That last five  minutes literally just made or broke the profit.  

[46:46] I mean that last five minutes he comes through on  the back door and we had 63 to take home a hundred   on projection and he said projection at the last  absolute minute. We close out our pandemic as he  

[47:02] said that was the last question. He takes another  question and they hit pandemic. So, you know what?   All in all, minus 29 probably should have been  plus 70, plus 100, but the Beige Book strike and  

[47:17] the projection strike just really rinsed us over  there, but you know what it is what it is. Like,   not too bad as far as damage control. It could  have been worse. All my yes strikes hit. And  

[47:31] then all of my no strikes came through except  for Beige Book and Projection. So overall,   I mean, if I would have just sized these a little  differently, we could have profited. But minus   $29 on on Jerome Powell today, you know, we'll  take it and we'll roll with it. But just looking  

[47:49] at other stuff for the rest of the day. We do  have Tesla earnings call coming up. We also have,   I think, some Melania Trump speech. What will  Melania Trump say during her Fox News interview? I  

[48:02] think it's going to be like the Fox News interview  from yesterday. When it comes to Trump. And then   we do have Tesla earnings. I might throw some  of those on Twitter. This was more for just   the FOMC meeting here today. And then I'm going  to show just quickly the chart here on Bitcoin.  

[48:20] We did print a couple of 15 minute candles while  Powell was talking. I'm curious to see the price   action coming up because typically when Powell's  up there, we do see a pump when he stops talking   unless he was talking very bullish rhetoric, which  I don't know. Wasn't screaming that to me. I think  

[48:35] we might see a little bit of I think we might see  a little bit of a dip here in the coming hours.   But that's going to be it for today's stream,  everybody. Thanks for coming. As always, we'll   see you guys on the next video tomorrow going over  the crypto markets. As always, like the video down  

[48:51] below, subscribe to the channel, and also if  you're not already trading on Kalshi, we have   a link down below to check out Kalshi. They did up  their referral bonus. So, if you deposit and trade   $25, you will get $25 in your account absolutely  free. So, check out Kalshi down below and I'll  

[49:08] see y'all tomorrow. As always, stay bullish,  my friends, and trade responsibly, my friends.