*The Federal Reserve FOMC Presser & Rate Decision | Kevin Warsh*

[00:02] All right. All right. All right. Welcome

[00:04] back everyone to another Federal Reserve

[00:07] meeting. Boy, it's uh it's been what,

[00:09] like six weeks since we've done one of

[00:10] these. Uh and uh you know, it's going to

[00:12] be kind of interesting because this will

[00:14] be the first one that we don't have good

[00:16] old JPL for. It's almost like, you know,

[00:20] it was bittersweet. When he had his last

[00:22] meeting, we were kind of thinking, hey,

[00:23] is he going to get a standing ovation?

[00:25] He didn't get a standing ovation. He

[00:27] didn't get applause, but he didn't get a

[00:28] standing ovation. Yeah. So, it's going

[00:30] to be interesting. We've got about um 90

[00:33] seconds to go until we get the potential

[00:36] um uh for you know a rate hike built

[00:39] into the SCP. We don't actually think

[00:42] we're going to get any kind of move

[00:44] today uh on rate cut or rate hike.

[00:47] Today's going to be all about the setup.

[00:49] What are we going to get for uh rate

[00:52] cuts in the future? A lot of people are

[00:54] really worried about rate uh hikes in

[00:57] the future. So, we'll see how that goes.

[01:00] Uh, but uh, again, we're about 60

[01:02] seconds away here from the summary of

[01:04] economic projections coming out. As that

[01:06] summary of economic projections comes

[01:07] out, I'm going to go through all of the

[01:10] details of the summary of economic

[01:11] projections. I'll read them off the wire

[01:13] services and uh, then we'll get into

[01:15] some of the details. We'll make a bingo

[01:17] board for the actual presser. Uh, we

[01:20] will get that rate decision. Again,

[01:21] we're not expecting a move, but we'll

[01:22] get that rate decision in about 40

[01:24] seconds. and uh expecting that hold uh

[01:27] summary of economic projections is going

[01:29] to be where the entertainment is and

[01:30] then of course we'll get into bingo

[01:31] board and you know what's war going to

[01:33] say and all that good stuff. So uh we'll

[01:36] find out uh what happens here and what

[01:39] kind of uh what kind of new joy we get,

[01:42] what kind of new phrases we get, what

[01:44] kind of changes we get. I wouldn't be

[01:45] surprised if Wars actually ends up

[01:47] getting rid of the summary of economic

[01:49] projections uh in general. Uh, and

[01:52] honestly that wouldn't be that big of a

[01:53] deal because even Jerome Powell had sort

[01:55] of suggested getting rid of them in the

[01:56] past. But, um, we shall see. We shall

[02:01] see.

[02:02] Uh, all right. Here we go. Okay. Federal

[02:05] Reserve median view of Fed funds rate at

[02:07] the end of 2026. 3.8. There it is.

[02:09] That's one rate hike built in uh for the

[02:12] end of 2026. End of 2028 back to 34. So,

[02:16] basically, we're expecting to go up uh

[02:18] one, at least one hike, potentially two

[02:22] depending on how these votes play out.

[02:24] Uh and then back down to where we are by

[02:26] 2028. So, a little bit of a hike is

[02:29] being priced in. 25 basis points of

[02:31] hikes priced in for 2026,

[02:34] followed by 25 basis points of cuts in

[02:36] 27, and actually another 25 basis points

[02:38] of cuts in 2028. Uh, we've got only 18

[02:42] of 19 policy makers submitted

[02:45] projections. I wouldn't be surprised if

[02:46] Worsh was the one guy who's like, I'm

[02:48] not doing projections. I bet you he's

[02:50] the one. Uh, policy makers see 4.3%

[02:52] unemployment rate at the end of 26

[02:54] versus 4.4 in the March projections,

[02:56] which means we're seeing uh the Fed

[02:58] members start indicating the employment

[03:00] market stabilizing. I've got um 2.2% on

[03:04] GDP growth in 2026 versus 2.4 seen in

[03:07] March. So a little bit of a write down

[03:09] on GDP but nothing dramatic there. Job

[03:11] gains have kept pace with the workforce.

[03:13] Unemployment rate changed little.

[03:14] Productivity growth capital investment

[03:16] are strong. Uh Fed uh Fed in favor of

[03:19] policy uh holding firm was uh unanimous.

[03:23] So uh everybody voted for it. Uh the

[03:26] committee reaffirmed policy of

[03:27] maintaining ample reserves in the

[03:28] banking system. Fine. Growth capital

[03:31] investments are strong. activity

[03:32] expanding at a solid pace despite

[03:34] elevated uncertainty due to in part of

[03:37] the Middle East. That's part of the

[03:39] anticipation as well. Uh we have let's

[03:42] see uh let's see Fed projections showing

[03:45] PC inflation is not expected to return

[03:47] to 2% target until 2028 unchanged from

[03:50] the March projection. So basically a

[03:53] slow sort of schlog down uh on

[03:57] inflation. Uh waiting for let's see here

[04:01] what else we have. Uh we've got uh okay

[04:05] let's listen to Steve just for a moment

[04:07] here while I pull up some docs.

[04:08] >> Upgrade both core and headline PCE

[04:10] inflation forecast to 3.6 from 3 2.7 uh

[04:14] this year on headline and from 27 to 33

[04:17] on core. The core remains elevated next

[04:20] year. That might be important uh at 2

[04:22] and a half%. So I'm recap capping here.

[04:25] A unanimous vote a much shorter

[04:27] >> Yeah. Their website actually does not

[04:29] have the Oh, there it is. It just came

[04:30] out. Project material. Okay. Play

[04:32] >> stuff from the statement that was really

[04:34] my opinion kind of worthless uh about

[04:36] how the Fed will make its decisions. Um

[04:38] and they also show a divided committee

[04:40] when it comes to the outlook on rates.

[04:42] Brian, back to you.

[04:43] >> This statement is so short. It's

[04:46] practically a tweet. I mean, this entire

[04:48] statement is one sentence, then two

[04:51] sentences, then two more.

[04:53] >> Here it is. I got it. Here's the

[04:55] statement. So, they've really reduced

[04:56] this. Look at this. Uh the Fed Open

[04:58] Market Committee approved the following

[05:00] statement for release. The Fed decided

[05:01] to maintain the target Fed funds rate uh

[05:04] between 3 and 1 half to three and a

[05:05] quarter uh following the Fed's dual

[05:07] mandate of reffirmed ample reserves in

[05:10] the banking system. Some uncertainty due

[05:12] to the Middle East inflation uh elevated

[05:14] relative to 2% goal. And you can see

[05:17] this is a lot sharper or sorry shorter.

[05:19] And that's part of Worsh's goals to stop

[05:22] trying to overcommunicate is his opinion

[05:25] that the Fed has been overcommunicating.

[05:26] I wonder if this meeting is going to be

[05:28] a lot shorter now. So unanimous hold.

[05:31] Not a surprise that we got a unanimous

[05:33] hold. Let's go look at the summary of

[05:34] economic projections in detail now. All

[05:37] right, here we go. So this is the actual

[05:41] SCP here. All right, let's see what we

[05:45] have here. We've got uh the unemployment

[05:48] rate. You can see no concerns here about

[05:51] the unemployment rate at all. This is

[05:53] pretty much green. Honestly, it should

[05:54] be green. Uh green across the board.

[05:57] There's really nobody as far as the

[05:59] averages here or the median uh

[06:01] suggesting there would be any kind of

[06:02] movement up on the unemployment rate.

[06:04] Now, if I look at range,

[06:06] excuse me, the highest uh estimate for

[06:08] the unemployment rate I see is in 2026

[06:11] and 7 at 4.6. But every single person

[06:14] submitting a projection does not

[06:16] actually see the unemployment rate going

[06:19] up. Now, as far as inflation, we can see

[06:23] the highest estimate for core PC is 3

[06:26] 1/2 4.1 on headline and that rapidly

[06:30] goes down in 2026 to 28 to 30. Now, I

[06:35] personally think that, you know, they'll

[06:37] project this potential. Let's take a

[06:39] look at the market here really quickly.

[06:40] uh they'll project this 25 basis point

[06:43] rate hike this year, but I think they

[06:45] won't actually end up hiking this year.

[06:47] Uh we did anticipate this morning that

[06:49] they would price in uh a rate hike for

[06:53] the year. I'm actually surprised the

[06:55] market is reacting negatively to that

[06:57] though because the bond market has

[06:59] already been pricing in a rate hike this

[07:02] year. So, a little bit surprising, but

[07:04] the market is reacting negatively to

[07:07] this number right here. So let's go

[07:09] ahead and highlight this. Uh right there

[07:12] you can see that increase of about 40

[07:14] basis points. Uh bond market was already

[07:19] pricing in one hike for 2026. Mark uh

[07:22] QQQ

[07:24] um did turn down on this release. Uh

[07:28] WASH may downplay with talk though.

[07:31] That's the big hope here is that WASH

[07:34] comes out and ends up downplaying this

[07:36] and then that's how the market can

[07:38] actually end up going up today. But this

[07:40] is u this really should not have been a

[07:43] surprise but the market is acting like a

[07:45] this is a surprise. Should not have been

[07:47] a surprise. What's actually interesting

[07:49] is that they only price in one hike and

[07:52] then they go right back down. Uh market

[07:55] was pricing in one hike for 2026 and one

[07:58] hike for 2027. So two total. This

[08:02] document is actually much more benign,

[08:04] right? This document is saying uh this

[08:08] document prices in 25 BP this year and

[08:11] 25 BP uh and and negative 25 BP next

[08:15] year. So basically up and down that's

[08:17] what you're pricing it. I actually don't

[08:19] think that's going to happen because

[08:20] that's kind of what they did in the 70s

[08:22] where you went up and down a lot and you

[08:24] made too many adjustments. Uh and Jerome

[08:26] Powell is going to be really anti that.

[08:28] Uh 1970s saw a lot of up and down

[08:32] adjustments. Oh my goodness, stupid PDF

[08:35] editor here does this. When I'm in the

[08:36] middle of typing, it just freaks out. Uh

[08:38] there we go. 1970 saw a lot of up and

[08:41] down adjustments which uh contributed to

[08:44] a lack of faith and confidence

[08:48] uh in the Fed. They were basically

[08:49] extremely responsive to you know random

[08:53] whims of the market uh in the 70s. Uh so

[08:56] a little bit surprising here. uh that uh

[08:59] this is actually better than the market

[09:01] had been pricing in yet the market is

[09:03] selling off on that. Uh okay, maybe the

[09:06] market was blind to what the bond market

[09:08] was pricing in. In other words, the

[09:09] stock market was blind to the bond

[09:11] market's pricing. Possible. Uh it just

[09:13] seems odd. Bond markets usually that uh

[09:16] you know crystal ball if you will or or

[09:18] like we talked about in the course

[09:20] member live stream, the Lord of the

[09:21] Rings palunteer.

[09:23] I literally just saw the first um Lord

[09:26] of the Rings of the trilogy. I'm like

[09:28] one and a half movies deep. I gotta say

[09:30] I totally understand why people are

[09:31] totally in love with this. I'm really

[09:33] excited. Like Tolken, what a bad. Uh but

[09:35] anyway, uh so as we can see here, the uh

[09:39] longer range, you actually do have

[09:41] somebody who thinks that rates could go

[09:44] as high as 4.4%.

[09:46] That's like a 100 bases. Look at that.

[09:48] Holy smokes. Hold on. Am I in the rates

[09:51] here? Yeah, dude. Somebody's going mega

[09:54] hawk. Look at this. In March, somebody

[09:58] had a high of 3.6. That moved to 4.4.

[10:02] Someone really honked this meeting. Uh,

[10:06] and if I look at the central tendency,

[10:08] that should be gone. Uh, no, that moved

[10:12] up as well. So, even on the central

[10:14] tendency, you moved up to 3.9. So, uh,

[10:18] let's write that down too here. Even on

[10:21] central uh tendency we got two hikes. So

[10:26] on central we got two hikes on median.

[10:31] So median versus I guess average

[10:34] probably. Uh we got uh we got one hike

[10:37] over here. I mean that's pretty close.

[10:39] This is 40 basis points. That's 50 basis

[10:41] points. And uh somebody really hawkked

[10:43] over here to pull up the range. That's

[10:45] quite interesting. Let's uh let's look

[10:47] at the GDP projection here. So change in

[10:50] GDP pretty consistent at 2%. You don't

[10:53] actually see much change in 27. There's

[10:57] really nothing that's been changed here.

[10:59] If you look at the range, you do have

[11:01] somebody who thinks the market's

[11:02] actually going to be running hot. And

[11:04] that's probably the same person who's

[11:07] coming in uh with this 4.4 rate. So uh

[11:12] let's see here. Someone thinks GDP will

[11:16] run hot.

[11:18] There we go. Okay.

[11:23] All right. So, uh let's see here then.

[11:27] Let's look at the actual dots. They'll

[11:29] give us a little bit more color on where

[11:31] they are all placed. So,

[11:35] this is the target range for the Fed

[11:38] funds rate. you could see that that

[11:41] trend down is still occurring, right? Uh

[11:44] so the committee in general is still

[11:47] committed to this idea of uh of a

[11:50] downtrend uh in rates which is I think

[11:53] appropriate. I actually have this

[11:55] mindset and it's really actually partly

[11:57] an investing thesis as well that by 2032

[12:01] we'll see lower rates than ever before.

[12:03] like will potentially be back to

[12:04] negative interest rates uh in Europe and

[12:07] maybe lower 30-year rates here in

[12:09] America, which you know has some

[12:10] benefits obviously for even companies

[12:12] like, you know, Robin Hood now doing

[12:14] mortgage referrals or SoFi now getting

[12:16] into uh uh home lending. Their home

[12:20] lending business, if you haven't been

[12:21] paying attention to it, it's

[12:22] understandable, but their home lending

[12:24] business has actually been growing at

[12:26] the fastest pace of all of their actual

[12:28] lending products. Uh, and it's a

[12:30] horrible time right now for home loans,

[12:32] which makes SoFi somewhat interesting.

[12:34] But, uh, as you can see here, this the

[12:36] thickness is what moved. So, this

[12:39] thickness

[12:41] right here just shot up about one, but

[12:45] you only have one knucklehead who's

[12:48] really high at that 4.4 range. That's

[12:51] only one dot. And we actually went from

[12:54] uh, and this is 2027, so to be clear,

[12:56] this is 2026. Uh, and you still have

[12:58] that same knucklehead right here who's

[13:00] sort of maintaining this this elevated

[13:02] outlook. Most of the dogs uh are are

[13:05] down here uh in the uh the mid3s to um

[13:10] uh lower 3s range, especially when you

[13:12] get into 2027.

[13:14] So um

[13:17] I don't know. I don't I don't see the

[13:19] votes for a rate hike because I have 1 2

[13:22] 3 4 5 6 7 8 nine. Not all of them will

[13:25] vote. One, two, three, four, five, six,

[13:28] seven, eight, nine. I've got nine and

[13:30] nine. We're 5050 honestly on a rate

[13:33] hike. 5050 on dots for a rate hike. Uh

[13:37] market was pricing in two. This is

[13:40] better news than expected again. Uh now

[13:44] again, we just need WSH to uh talk this

[13:47] down.

[13:49] Uh let's write that down. I now expect

[13:52] WSH to talk down the um

[13:56] the rate hike potential.

[14:00] All right, good. So, we'll do some bingo

[14:04] in just a moment. Uh let's see what we

[14:07] have here. Distribution of participants.

[14:08] That's fine. This we've got here a range

[14:12] for GDP. Uh this is where we're going to

[14:15] find the 2026.

[14:18] Why don't I see the one GDP guy who's

[14:20] going crazy with the the 4% in the

[14:24] range? I don't know if they're just not

[14:25] showing that. All right. Unemployment

[14:28] rate,

[14:31] you've only got one person expecting it

[14:33] to go up to 4.6.

[14:35] PCE inflation, most people are

[14:38] relatively uh stable here around 3 and a

[14:40] half, expecting that longer term to

[14:42] return to 2%. Core PCE, same thing, 3.3.

[14:47] so elevated for a while by 2027. See,

[14:50] you know, this is, you know, with with

[14:52] 50% of the members not pricing in a

[14:55] hike, you're still expecting this

[14:57] decline in the next year. So with that's

[15:00] important to write down with 50% of

[15:01] members uh not pricing in a hike uh the

[15:06] average of members still see and really

[15:10] really the bulk right uh inflation core

[15:14] getting down uh 1% over the next year

[15:19] right if if you thought without rate or

[15:22] without a rate hike we're not going to

[15:23] get inflation down they're really

[15:24] pricing in this roll over so this is a

[15:27] rollover of tariffs, uh, Iran and, uh,

[15:32] you know, possibly, uh, AI supply

[15:34] shortages,

[15:36] uh, sort of a a lapping of annual

[15:39] inflation, if you will.

[15:42] Okay. Very interesting. Uh,

[15:46] somebody's calling this, it's going to

[15:48] be the reverse vulkering. Well, yeah,

[15:50] Vulkar, um, you know, basically jacked

[15:52] up rates to crush the backs of, uh, the

[15:55] back of inflation and restore Federal

[15:56] Reserve credibility. basically put the

[15:58] pants on. Uh yeah, I kind of I I I guess

[16:01] you could call it reverse vulking cuz I

[16:02] kind of think Wars will take the pants

[16:04] off and be like, "We're good, baby.

[16:06] Let's go stripping."

[16:10] So, wow, look at that. The 725 bounce

[16:13] right here within 47 cents of that 725

[16:16] bounce. Uh I'm bullish on Warses

[16:19] talking. I, you know, I'm I'm positive

[16:21] on uh on on this actually being an

[16:23] opportunity, a longerterm buying

[16:25] opportunity. Uh, and I'm uh, you know,

[16:27] we've been calling out uh, Robin Hood,

[16:30] including this morning in our course

[16:32] member liveream, which if you want to

[16:33] join, we just, uh, we just, uh, we don't

[16:35] have an expiration going on right now,

[16:37] but you can always go to meet me.com. I

[16:39] think you can use coupon code pope. But

[16:41] this morning, we called out Robin Hood

[16:43] uh, because the finance sector has

[16:44] really started to uh, to pop off. And

[16:47] look at Robin Hood's performance

[16:48] intraday since our call out. We called

[16:51] it out right here at $96.

[16:55] And uh and it's up almost 12% right now,

[16:58] 11.75%.

[16:59] Uh SoFi also up, but not as extreme as

[17:03] Robin Hood right there off that 1771

[17:06] level. Both uh both I think have quite a

[17:08] bit of upside over the next uh few

[17:10] months as well. But anyway, let's focus

[17:12] on we're going to do some Fed bingo now.

[17:14] So, we're going to put a bingo board

[17:15] together and after we put this bingo

[17:18] board together, we'll uh we'll get into

[17:21] uh some of the other goodies. Okay,

[17:23] let's see here. So,

[17:26] oh, I forgot how to do this. There we

[17:28] go. Uh, you know, if you ever want to

[17:30] know how to, um, this is honestly just a

[17:33] dumb idea. Um, did I do it? Yeah, I did

[17:36] it. Okay. If you ever want to know how

[17:38] to get used to doing custom characters

[17:40] on your phone or like your iPad or

[17:42] whatever, like the the yen symbol or the

[17:45] euro or whatever, just change your

[17:47] password to include some of those

[17:48] freaking letters. Oh my gosh, you'll

[17:50] learn it real fast.

[17:52] But, uh, it also makes it really slow to

[17:55] unlock your stuff. Uh, okay. So, I'm not

[17:58] a fan of fourdigit passcodes while I

[18:00] pull up our bingo board. I, uh, I'm a

[18:03] big fan of like eight digits and letters

[18:05] and all that kind of stuff on your

[18:07] phone. I just feel like the phone's

[18:08] pretty important. And, and most of us

[18:10] have fourdigit passcodes. Uh, too easy

[18:12] to see over your shoulder. All right, so

[18:16] here we go. Bingo board. Popping that

[18:18] in. Coming right up. Uh, so my play

[18:22] here, this is my thesis, okay? I could

[18:24] be wrong, but my thesis is we bottom at

[18:27] 7:25 and we're up from there. And uh,

[18:31] why is this not inserting? Insert, you

[18:33] fart.

[18:34] And start.

[18:36] Okay, well, whatever. We'll get to the

[18:38] bottom of this. You know, maybe I could

[18:39] just use an old one. Uh, that's not

[18:43] convenient.

[18:44] Anyway, I'll I'll get this set situated

[18:47] in just a second. But um 725, I wouldn't

[18:51] be surprised if that's the bottom and

[18:53] we're up from here. Especially since I

[18:54] think I wouldn't, you know, seeing how

[18:56] short that statement is, I now wouldn't

[18:58] be surprised if Kevin Worsh actually

[19:00] ends up making this meeting very short.

[19:02] Uh it just says something basic like uh

[19:04] hey, you know, we are

[19:08] uh I guess let's let's think about this

[19:10] prediction in line with our bingo board.

[19:13] So, uh, if I were Kevin Worsh, what

[19:16] would I say? Uh, well, first thing I

[19:18] would do is I'd probably, if it were me,

[19:20] I'd probably walk out with like a Luigi

[19:21] mug. I'd spawn one in.

[19:25] That's the kind of Fed chair we need is

[19:26] somebody who's going to come out with a

[19:28] Luigi board or, you know, a Luigi um,

[19:30] coffee mug. But anyway, if I were wars,

[19:33] I'd probably say something to the effect

[19:35] of uh inflation shock uh from mediumterm

[19:41] uncertainty due to Iran is likely to

[19:44] fade. Uh we have uh a deal is uh

[19:48] imminent. Uh so I think he'll reference

[19:51] the deal, right? I think that uh oil

[19:55] prices are uh temporarily

[19:59] uh prompting

[20:01] higher headline inflation and some pass

[20:04] through to core. Uh we expect that to

[20:07] resume its downtrend

[20:11] after uh the straight of four moves

[20:13] reopens. This is uh going to sound very

[20:15] Trumpian.

[20:18] Sounds uh Trumpian, right? And then

[20:21] we'll end up getting um something to the

[20:23] effect of um goal is to uh remain

[20:28] stable. That's a key word. Key word

[20:30] right there. remain stable uh on policy

[20:35] uh until there's a greater sign of a

[20:39] data moving in either direction. Uh so

[20:43] that if uh inflation does lap tariffs

[20:48] last year and we see a uh drop in

[20:52] inflation in Q3, Q4, uh we can uh resume

[20:57] an easing bias, right? I think that

[21:00] would be very bullish for markets and

[21:02] understand too uh this would be bullish.

[21:06] Think about the data we've been getting

[21:08] right weekly data on Tuesday indicated

[21:11] about I think we were about 102k jobs

[21:14] per month on ADP. We had retail sales

[21:19] smoked this morning. Uh so really good.

[21:23] Uh even including or uh even excluding

[21:26] gas and cars, right? You've got uh

[21:30] obviously GDP is holding up, AI spent

[21:32] holding up. Uh so, you know, oil prices

[21:36] are coming down, rates are coming down,

[21:37] riots uh rights, oil GDP. Let's go see

[21:40] what the Atlanta Fed GDP is really

[21:42] quickly. Uh because sometimes they

[21:44] they'll reference this. We're at 3% over

[21:47] here on the uh Atlanta GDP. Let's look

[21:50] at Dallas trimmed mean as well.

[21:54] Dallas trimmed mean is

[21:58] so Dallas trimmed mean one month

[22:01] inflation rate trimmed mean right here

[22:04] we're over here at 25.

[22:08] This one, you know, is a little bit more

[22:10] volatile. Yeah, you can see the

[22:12] six-month trimmed mean is up but not

[22:15] that high, right? It's actually pretty

[22:18] close to that that 2% level. uh if this

[22:21] is a tool that you want to use, some

[22:23] people don't. It's considered an

[22:24] alternative measure of core inflation in

[22:27] PCE calculated by staff at the Dallas

[22:29] Fed. So, I actually wouldn't be

[22:31] surprised to see him reference trim

[22:33] mean. If you hear trim mean, it's

[22:35] bullish, right? Uh referencing trimmed

[22:38] uh Dallas Fed trimmed mean would be

[22:41] bullish. Uh that inflation gauge is

[22:45] closer to 2%.

[22:47] Okay. So, let's take some of this and

[22:49] jot it into

[22:52] our um bingo board here and let's see

[22:55] what we have. So,

[22:58] uh and then feel free to mention some

[22:59] bingo ideas uh as well. Let me know what

[23:02] you think. Uh let's It's going to be a

[23:05] little harder. Let's see if he honors

[23:07] the purple tie and if he's on time. All

[23:09] right.

[23:11] Uh okay. Come on, buddy. Come on, Dad.

[23:15] Okay.

[23:17] Am I going to have to use my finger

[23:18] here? Going on the iPad. All right. You

[23:22] know, this is what happens when you get

[23:24] a new fed chair. All the things that

[23:26] used to work just start falling apart.

[23:28] It's all coming to an end. There we go.

[23:33] All right. No problem. No problem. We

[23:35] can get through it. All right. There we

[23:37] go. So, uh, let's see if we can pull it

[23:40] off on time. Uh, should we go purple

[23:44] tie? You know, it feels weird to say

[23:46] purple tie, right? Feels a little weird

[23:48] to say that purple tie.

[23:51] I for some reason I think he's like I

[23:54] picture him as coming out with like a

[23:56] bunch of like messy papers. Uh comes out

[24:01] with messy papers

[24:06] versus some kind of like electronic

[24:08] device, right? I I don't know why I

[24:10] think that. Uh resume down. Okay. Um,

[24:13] talks about deal talks about

[24:18] Iran deal.

[24:22] Mentions trimmed meanions

[24:26] trimmed mean.

[24:31] Okay. By the way, if you haven't tried

[24:33] the uh stock AI app yet, uh that's

[24:35] inside of the Meet Kevin app, there is a

[24:37] free sample portion that you could use.

[24:40] Uh all you have to do is download the

[24:41] Meet Kevin app. It's totally free. So,

[24:43] you just go uh type meet Kevin into the

[24:45] Apple or Android app store and you could

[24:47] get our data tab. You could get the

[24:49] daily wealth, the videos tab, but you

[24:52] could also get the pricing power portion

[24:54] of the stock AI app, which is 1/4th of

[24:57] the stock AAI app. Uh, and of course,

[24:59] there's a lot more in there as well, but

[25:01] it's kind of cool. Uh, and then there's

[25:02] going to be some a new special feature

[25:05] coming out within like the next 24

[25:06] hours. We call it the Alpha Wire

[25:08] service. That's going to blow people's

[25:10] minds and I can't wait to show that off

[25:12] to you. But that should be released

[25:13] within the next uh hopefully 24 hours

[25:15] here. We'll see. Uh but you can download

[25:17] that app for free and uh uh we'll have a

[25:20] uh free period as well where you could

[25:21] use the alpha wire service. So you may

[25:23] as well download the app. Okay. So uh

[25:26] let's see. Uh mentions Tremine talks

[25:28] about the Iran deal, comes out with

[25:30] messy papers, purple tie on time. Uh we

[25:33] think that uh he'll talk about oil

[25:35] temporary, right? Oil

[25:38] temporarily

[25:41] uh temporaril

[25:44] whatever

[25:47] uh increasing inflation.

[25:50] Oh, I think he'll talk about AI

[25:52] deflation is coming. AI deflation

[25:57] coming.

[26:00] Uh, I also think he's going to want to

[26:02] get rid of the SE. Uh, may

[26:06] end SE

[26:09] or make

[26:13] it optional.

[26:16] It's honestly pretty useless in my

[26:18] opinion, and it does move the market,

[26:20] but it's usually wrong.

[26:23] Uh, Fed dual mandate. Yeah, sure. That'd

[26:25] be an easy one. Dual mandate. I mean,

[26:27] he's got to sound a little bit like the

[26:29] traditional Fed hair, right? Dual

[26:31] mandate. Uh, data dependent. Don't we

[26:34] have a halo sound to that? Uh, I thought

[26:37] I did.

[26:39] >> Data dependent.

[26:41] >> There we go.

[26:45] All right.

[26:47] What else do we have here? So, we've got

[26:49] goal is to be stable on policy. I think

[26:51] that's a big one. Stable on policy.

[26:53] That's very bullish. stable on policy.

[26:58] There we go. That would be quite

[27:00] bullish.

[27:02] Uh let's see here.

[27:04] Inflation shock to fade.

[27:08] We wrote that down too. Inflation

[27:12] shocks. Come on.

[27:16] To fade.

[27:19] Okay. Uh we've got uh employment

[27:23] employment improving.

[27:27] and improving. Uh it would also be

[27:31] useful if you said something like don't

[27:33] want to stand in the way, right? Don't

[27:36] uh want to send mixed signals

[27:42] signals

[27:44] by hiking

[27:47] to cut. That would be huge if he said

[27:49] that. And super bullish, right?

[27:52] So, shows up in a red suit, says

[27:54] somebody.

[27:56] Uh okay.

[27:59] So, let's see how yields are doing.

[28:01] Yields right now, yields went up about

[28:04] 2.9 basis points. Interesting. Yeah,

[28:06] this will set the tone. I agree. Uh,

[28:09] let's see here.

[28:12] Great message. Yeah. I don't know. It's

[28:14] it's just the problem is it's it's only

[28:16] a great messaging tool to the extent

[28:17] that it's accurate. And frankly, it's uh

[28:19] it's usually inaccurate. Yeah, I I do

[28:22] wonder if the meeting will be shorter.

[28:25] So, usually we have about an hour of

[28:28] Powell, right? Uh so, uh let's say less

[28:32] than 30 minutes,

[28:36] 30 minute meeting or it should be

[28:39] presser

[28:41] press

[28:44] less than 30 men presser. Uh I think

[28:47] that um easing bias will return

[28:56] to return

[29:00] and I think he'll say we've got to be

[29:02] patient.

[29:05] Uh economy is strong

[29:10] is strong.

[29:14] Let's see here.

[29:17] Uh someone

[29:19] Oh yeah, somebody asks about um

[29:23] uh his his prior like

[29:27] you know his history is asked

[29:31] about being wrong on inflation before

[29:37] inflation in the past. He thought

[29:38] inflation would skyrocket.

[29:40] That would be a great question if

[29:42] somebody hit his record, right? which is

[29:45] fine like you could change your opinion.

[29:48] Uh labor market uh what about uh you

[29:52] know lower rates could broaden

[29:55] lower rates to broaden success.

[30:00] That's a goal often of the Fed is if we

[30:03] get rates down more people can

[30:04] participate whether they're different

[30:06] races or income levels or cultures or

[30:09] you know whatever. That's usually a goal

[30:11] of the Fed, sort of like a side goal is

[30:13] increasing that participation

[30:16] uh in in the wealth effect. So, let's

[30:20] see here.

[30:22] Yeah. No, I know. I I I the Lord of the

[30:25] Rings thing. I know some people were

[30:26] surprised by that, but yeah, I just

[30:27] watched it and I was I was uh studying

[30:30] uh I mean I just I just opened it up. I

[30:32] just started this, too, cuz I I heard

[30:34] you're supposed to watch the trilogy

[30:36] first, but when it comes to the books,

[30:38] you're supposed to start with The

[30:40] Hobbit. So, I got The Hobbit. And uh I'm

[30:43] a little deep in it, but uh yeah, right

[30:47] now I'm learning about um Bilbo's

[30:49] father, who built the most luxurious

[30:52] rabbit hole for her, the mother.

[30:55] I guess I'm not that deep. Anyway, okay,

[30:57] we've got about a minute to go here. I'm

[30:59] running out of things to say, so I got

[31:02] four more things to say. Uh, let's uh

[31:04] fill these in really quickly. Uh, let's

[31:07] do

[31:09] uh valuations elevated. I don't actually

[31:11] think he say it won't say won't say

[31:15] valuations uh elevated.

[31:19] I think he'll say um housing

[31:23] uh to strengthen on lower rates. I think

[31:27] he's going to be pretty bullish on lower

[31:29] rates. Uh then we'll have let's see

[31:32] here. Uh

[31:35] yen carry trade. I don't think so.

[31:38] Dollar dominance. That's the way I would

[31:39] put it. I like that. Dollar dominance

[31:43] and uh maintain Fed independence. One

[31:46] more. Maintain

[31:50] Fed

[31:52] independence.

[31:55] And uh did we do purple tie? We did

[31:57] purple tie already.

[31:59] Uh

[32:01] did we did it on time? Uh I'll I'll just

[32:04] throw in the word uncertainty.

[32:09] Uncertain time. All right. Ready? Let's

[32:12] go.

[32:12] >> Hear war in his first conference to know

[32:14] what buzzwords might be for the future

[32:16] or is it going to be the usual things

[32:17] that it hints of?

[32:18] >> Big red background of that guy. Let's

[32:19] see if he's actually on time.

[32:22] All right. Here he comes out with a

[32:23] clown noise. No. Nose. Oh my gosh.

[32:27] Not my job. Yeah, that's a famous uh

[32:29] Apollo one. Reading from a laptop. Yeah,

[32:32] maybe. Oh, there he is. Oh my gosh. He's

[32:34] got no paper. He's got nothing.

[32:35] >> And here comes new paper. Nothing. But

[32:37] he's on time.

[32:38] >> Good day.

[32:39] >> Is that purple?

[32:40] >> It's an honor, a true honor to be back

[32:43] at the Federal Reserve.

[32:44] >> It's blue.

[32:45] >> And to take up this duty at a time of

[32:47] such

[32:48] >> consequence.

[32:50] I've been especially heartened by the

[32:52] warm welcome of old friends and new

[32:55] colleagues both. And I've listened

[32:58] closely to my fellow FOMC members for a

[33:02] lot of new ideas, new thinking, and

[33:05] genuine interest in moving the Fed

[33:07] forward.

[33:08] This week's FOMC meeting exemplified the

[33:12] very best of the Fed's traditions.

[33:15] Rigorous debate,

[33:17] open-mindedness,

[33:18] commitment to mission,

[33:20] >> boring,

[33:20] >> responsibility,

[33:22] and accountability.

[33:24] >> Does he have a teleprompter?

[33:25] >> No.

[33:26] >> In this business, they all add up to one

[33:29] thing. Getting monetary policy right

[33:33] as near to it as we can do. That is our

[33:37] northstar.

[33:38] >> All right. My colleagues and I are here

[33:41] to serve our legislative remitt, which

[33:43] you've heard us say before, price

[33:45] stability and maximum employment. And

[33:49] these objectives guided our business in

[33:52] the meeting just concluded.

[33:55] As you saw a few moments ago, the

[33:57] committee decided to maintain the target

[33:59] range for the Fed funds rate at 3 and a

[34:02] half to three and 3/4%.

[34:05] In support of the Fed's dual mandate.

[34:08] No.

[34:08] >> The committee also reaffirmed its policy

[34:11] of maintaining ample reserves in the

[34:14] banking system.

[34:16] Economic activity is expanding at a

[34:18] solid pace despite elevated uncertainty

[34:21] that owes in part to the conflict in the

[34:24] Middle East.

[34:25] >> Yep.

[34:26] >> Productivity go growth and capital

[34:28] investment both strong.

[34:31] Job gains have kept pace with the

[34:32] workforce and the unemployment rate has

[34:35] changed little.

[34:37] We recognize that inflation has been

[34:40] running well ahead of the Fed's

[34:42] longstated inflation goal of 2%. That's

[34:46] been going on for more than 5 years.

[34:50] Persistently high prices are a burden

[34:53] for the American people.

[34:55] But the recent past need not be

[34:57] prologue.

[34:59] I am pleased to report that members of

[35:02] the FOMC are unambiguous and unanimous.

[35:07] This committee will deliver price

[35:09] stability.

[35:12] At any institution, a change in

[35:15] leadership is a natural and timely

[35:18] opportunity to reaffirm its mission, to

[35:22] review current practices, and to

[35:25] consider whether those practices best

[35:27] meet our objectives.

[35:30] My Fed colleagues and I will be working

[35:32] in close collaboration to ask what

[35:34] changes might improve the conduct of

[35:37] monetary policy.

[35:39] On that score, you might have already

[35:41] noticed something, a difference in

[35:44] today's policy statement. It's a bit

[35:46] shorter, a bit simpler, and it dispenses

[35:49] with some older language.

[35:51] That statement just gives you the facts

[35:54] as best we can judge it. Absent also is

[35:57] so-called forward guidance, which we

[36:00] agreed was not well suited to the

[36:02] current policy conjuncture.

[36:05] This afternoon, you also received the

[36:08] usual summary of economic projections.

[36:11] It's been the practice of this committee

[36:13] for participants to submit these

[36:15] projections, and I have encouraged my

[36:17] colleagues to continue to do so.

[36:20] >> I, however, have refrained from offering

[36:22] any projections of my own, consistent

[36:25] with my long-held views on the SCP, at

[36:28] least as currently structured.

[36:30] >> Yep, he's the one who did.

[36:31] >> In the medium projections, real GDP

[36:33] rises at 2.2%. 2% this year, 2.3% next

[36:37] year, and total PC inflation runs at

[36:41] 3.6% this year, 2.3% next year. The

[36:46] unemployment rate stands at about 4.3%.

[36:50] The median participant judges at the

[36:52] appropriate federal funds rate to be at

[36:54] 3.8%

[36:56] at the end of this year and 3.6 at the

[36:58] end of next.

[37:00] Let me turn now to a few words on a key

[37:03] initiative that we're announcing today.

[37:07] I'm appointing a task force in each of

[37:09] five areas

[37:10] >> that are central to the broad conduct of

[37:12] monetary policy. First, Fed

[37:15] communications.

[37:18] Second, the Fed's balance sheet. Third,

[37:22] our use and reliance on existing data

[37:25] sources. Uhoh. Fourth, productivity and

[37:28] jobs in an era of transformation. And

[37:31] last, the Fed's inflation frameworks.

[37:34] These subjects are timely,

[37:37] consequential,

[37:39] and in my view, worthy of a fresh look.

[37:42] My colleagues and I discussed them with

[37:44] energy and purpose over the last couple

[37:47] of days. For each of these independent

[37:50] task forces, I'm enlisting some of the

[37:53] very best minds both inside and outside

[37:56] the economics profession.

[37:58] They will be supported by subject matter

[38:00] specialists from our superb Fed staff.

[38:03] And they'll have a straightforward

[38:05] charge. Start with first principles,

[38:08] ask hard questions,

[38:11] examine current practice, consider

[38:14] alternatives,

[38:15] and ultimately propose next steps for

[38:18] policymaker consideration.

[38:20] Since last summer, my colleagues discuss

[38:24] possible improvements in the form and

[38:25] function of Fed communications.

[38:28] This new task force will build on that

[38:31] effort and I expect propose some

[38:34] well-considered changes including to the

[38:36] SCP I mentioned a few moments ago. Uh

[38:39] the second task force, the one on

[38:41] balance sheet policy, will review the

[38:44] benefits and risks of the current ample

[38:46] reserves regime and the composition of

[38:49] the Fed's balance sheet. They will

[38:52] assess alternative frameworks for the

[38:54] conduct and operation of monetary

[38:56] policy.

[38:58] The third task force, the one on data,

[39:01] will evaluate new information sources

[39:04] and consider methodological changes to

[39:07] improve data gathering with the aim of

[39:09] giving policymakers more accurate,

[39:12] relevant contemporaneous

[39:15] and perhaps most important, actionable

[39:18] information on the state of our economy.

[39:20] Fourth, the task force on productivity

[39:23] and jobs. It'll survey the pace, the

[39:27] reach, the economic impact of new

[39:30] general purpose technologies including

[39:33] AI.

[39:34] >> Oh,

[39:34] >> and explore the implications for the for

[39:37] the Fed in pursuit of our employment and

[39:40] inflation mandates. Yeah, this is the

[39:41] last AIDL argument that he's building in

[39:45] >> that'll examine the drivers of inflation

[39:48] first principles and weigh the full

[39:50] range of ideas for delivering price

[39:53] stability in a changing economy.

[39:56] You'll hear quite a bit more about these

[39:58] task forces and this overall initiative

[40:00] in the coming weeks.

[40:02] >> Enough for now to make a simple

[40:04] statement.

[40:04] >> Okay.

[40:05] >> Each task force will serve an objective

[40:08] shared by everyone in the system. shared

[40:10] by everyone around that table that I sat

[40:12] with over the last couple of days. A

[40:15] Federal Reserve that is cleareyed about

[40:17] its mission, fit for purpose, and

[40:20] focused on the future. And with that, I

[40:23] appreciate your attention. I'm happy to

[40:25] take your questions.

[40:27] >> He's actually doing questions.

[40:30] >> Uh hi, Chairman Howard with Roers. Good

[40:32] to see you again and and welcome back.

[40:34] Um uh this is a lot to be putting in

[40:36] motion uh so fast. What is the timeline?

[40:39] uh you have in mind for for each of

[40:41] these.

[40:42] >> So um I think it'll depend on the task

[40:45] force. It also depends on the urgency in

[40:48] which we need clear answers. My

[40:51] expectation I'm still in the business of

[40:54] recruiting and finalizing them. My

[40:56] expectation is the task forces will

[40:58] begin work in the next couple of weeks

[41:00] and we'll start to get some more

[41:02] information from them, some more framing

[41:04] of how they see things starting in the

[41:07] fall and hopefully most if not all of

[41:09] them concluding by year end.

[41:11] >> And uh just specifically on the

[41:13] inflation uh framework, uh you talk

[41:15] about first principles. Does this

[41:17] include a review of the 2% target

[41:20] itself? Uh you've mentioned that things

[41:22] to the right of the decimal point don't

[41:24] matter. Nope.

[41:24] >> Uh should this be starting from a

[41:26] premise that

[41:28] 2% as a point estimate is is too strict?

[41:31] >> Let me break that into two pieces. Uh

[41:33] first on the inflation framework review,

[41:37] their remitt is what are the drivers of

[41:40] inflation? What's the Fed's

[41:41] responsibility for inflation? In part,

[41:44] how do we measure inflation? But that'll

[41:46] overlap with my data group. uh on the 2%

[41:49] inflation objective that is the Federal

[41:52] Reserve's longheld objective of 2%.

[41:55] You've heard me say before uh I tend to

[41:58] focus on the left of the decimal point.

[42:00] Well, the two is the left of the decimal

[42:01] point. For now, zero is to the right. I

[42:04] see no reason until we have

[42:06] reestablished our commitment and ability

[42:09] to deliver on the 2% inflation objective

[42:12] to revisit that. So, that will be

[42:13] outside the scope of what we're taking

[42:15] on.

[42:15] >> Stays firm on that. Good.

[42:18] Colobby,

[42:20] >> thank you so much. Colobby Smith with

[42:22] the New York Times.

[42:22] >> So they could transition to using

[42:24] trimmed mean though and then you'd be a

[42:26] lot closer to 2%, right? They could say,

[42:28] "We're not going to use PCE anymore.

[42:29] We're going to use P trim mean."

[42:31] >> But looking at the SEP, the bulk of your

[42:33] colleagues expect core PCE to run around

[42:35] 3.3% by year end and for the 2%

[42:38] inflation target not to be reached until

[42:40] 2028. So, I'm curious how patient you

[42:43] think the Fed can afford to be at this

[42:46] juncture in terms of waiting for

[42:48] one-time inflation waves to wash

[42:50] through.

[42:50] >> They could basically just use a

[42:52] different formula and get inflation down

[42:55] and then cut rates under the worst

[42:56] regime is kind of what he's setting up.

[42:58] That's actually kind of bullish.

[43:00] >> Some action and raising rates.

[43:02] >> Sure. So, quite a bit there. Let me let

[43:04] me try to break that into pieces. First,

[43:07] we have the capability and commitment to

[43:10] deliver on our price stability objective

[43:12] of 2%. That's exactly what we're going

[43:14] to do. Um, that in the Fed's review of

[43:19] its strategy over the last any number of

[43:21] years in January, the Fed, including the

[43:24] strategy that we're still bound by, the

[43:26] Fed statement says that inflation is

[43:28] primarily determined by monetary policy.

[43:31] You bet it is. I've said for years

[43:34] inflation's is a choice. You bet it is.

[43:37] >> And today I'm announcing that this

[43:39] committee unambiguously and unanimously

[43:42] have decided we are going to deliver on

[43:43] that. The rest of your questions sounded

[43:46] like a encouragement for me to give

[43:48] forward guidance. Uh we've dropped

[43:50] forward guidance. Uh some along the

[43:53] committee I think dropped it I suspect

[43:55] from our discussion the last couple of

[43:56] days because they said at this moment in

[43:59] time it doesn't feel as though providing

[44:01] forward guidance is right. Others have,

[44:04] I'd say, different views and think as a

[44:06] general proposition, forward guidance

[44:08] isn't the business we should be in, but

[44:11] that'll be taken up by the task force on

[44:13] communications and my policymaker

[44:16] uh colleagues. We're going to listen

[44:18] hard to what the experts say and make

[44:19] our own decision. Um, but I can't give

[44:22] you any forward guidance about what

[44:23] we're going to do next. The good news is

[44:25] we'll be meeting in six weeks. So just

[44:27] following up I guess on the current

[44:29] policy settings then I am curious how

[44:31] restrictive you think things are at the

[44:33] current current moment given the flow of

[44:36] data that we've seen and you know

[44:38] forecasts that are coming down the

[44:39] pipeline.

[44:40] >> Yeah I I've heard characterizations both

[44:43] inside and the Fed about that. I'll give

[44:45] you my own. It's uneven. If I look at

[44:48] the housing markets as one example,

[44:52] uh Fed policy isn't the the single

[44:54] determinant of the state of the housing

[44:56] market, but broadly I would say there

[44:58] Fed policy appears to be somewhat

[45:01] restrictive. I would have a hard time uh

[45:05] managing to say those words if I were to

[45:07] see what's happening in financial

[45:09] markets. So I'd say it's uneven.

[45:11] >> That's perhaps a function of different

[45:13] transmission mechanisms of monetary

[45:15] policy. whether monetary policy is

[45:17] coming from our interest rate tool or

[45:19] our balance sheet tool. But the good

[45:21] news, we have a task force on that too.

[45:22] And the balance sheet task force will be

[45:24] looking more at that subject.

[45:26] >> Mike McKe,

[45:29] >> you said you don't like uh forward

[45:31] guidance. You dropped it from the

[45:33] statement this time, but with the dot

[45:35] plot, nine members suggested that they

[45:37] want a rate increase by the end of the

[45:40] year, and the markets have taken that as

[45:43] forward guidance. So, what does this

[45:44] mean in terms of how you guide the

[45:48] markets and in terms of uh what the dot

[45:52] plot's future is?

[45:54] >> Um, I'm going to have to give you the

[45:56] same answer I gave to to Miss Smith.

[45:59] We've got a task force for that. Um,

[46:01] I'll give you a little bit more.

[46:03] >> Punt it all.

[46:04] >> I reviewed the dot plots and when I saw

[46:07] the

[46:07] >> that's going to be this guy's new meme.

[46:09] got a task force to answer that, but I'm

[46:11] not going to answer it.

[46:12] >> Kind of with the big erasers. Um, that's

[46:15] to say that I think my colleagues around

[46:18] the table when they submitted their dots

[46:20] understand the world is changing quite

[46:22] quickly and they didn't feel bound by

[46:24] them 6 weeks from now or 6 days from now

[46:27] and if in the event that their

[46:28] circumstances change. Um, I'll note a

[46:31] couple other things. What I heard around

[46:33] the table was as they submitted their

[46:36] modal forecasts, their modal forecasts

[46:38] to be clear weren't this was more likely

[46:41] than not. This was this was more likely

[46:44] than their other scenarios. So I didn't

[46:47] hear u tons of conviction. What I heard

[46:50] was the kind of humility that I think we

[46:52] should have. I did not submit a a dot.

[46:56] For me, it's not helpful in the conduct

[46:58] of policy. I suspect by year end as I

[47:02] mentioned in my opening statements

[47:04] there'll be a review about

[47:06] communications broadly press conferences

[47:10] dots uh meetings and the like

[47:13] transcripts minutes this will be part of

[47:16] that I don't want to prejudge the

[47:18] outcomes there um but I'm pretty

[47:20] open-minded about what they could be and

[47:22] I was just incredibly impressed over the

[47:25] last couple of days uh my colleagues

[47:27] over the last two days and frankly over

[47:28] the first three weeks I've been here,

[47:30] they've been very open about changes.

[47:33] Change isn't easy. Change is filled with

[47:35] risk. But our number one goal is to get

[47:38] monetary policy right. The way to get

[47:41] monetary policy right is to deliver on

[47:43] the remmit that Congress gave us to

[47:45] deliver on price stability. And there

[47:47] was uh no disagreement on any of those

[47:49] points.

[47:50] >> At the risk of uh possibly getting the

[47:52] same answer about task forces uh

[47:54] communications, uh what is your feeling

[47:57] about these news conferences? Are you

[47:59] going to continue one after every

[48:01] meeting? Uh do you think find them

[48:04] useful? Uh what is

[48:05] >> We have a task force for that. We'll let

[48:07] you know.

[48:08] >> Communicate.

[48:09] >> Well, this one's probably got another 15

[48:11] or 20 minutes in it, so I don't want to

[48:12] prejudge the outcome. Um

[48:15] uh press conferences can be a very

[48:18] useful way to communicate with

[48:20] households, businesses, and more broadly

[48:23] through using the likes of you. I had a

[48:26] a great old mentor named George Schultz

[48:28] and his mantra was press conferences are

[48:31] useful, but when you have one, you want

[48:33] to make sure you have something

[48:34] important to say. Today, I think we had

[48:36] something important to say about our

[48:38] commitment to deliver on price

[48:39] stability, our commitment to rethink

[48:42] practices with an eye of moving the Fed

[48:44] forward. And to give you and the

[48:47] American people a sense that these

[48:48] aren't idle thoughts, these are concrete

[48:50] thoughts. That we're going to seek out

[48:52] the best minds, both the best thinking

[48:54] inside of the Federal Reserve, the best

[48:57] people I know in business and economics

[48:59] and the academy and technology and the

[49:01] rest to share their views. That's what

[49:04] we're going to be doing here, the

[49:05] pursuit of truth. Uh I think we're going

[49:07] to come up with some new and interesting

[49:09] things. Um we made some changes today. I

[49:12] expect more changes to come and uh and

[49:15] some of those might well be worthy of a

[49:16] press conference.

[49:18] >> Chris Rabber.

[49:21] >> Hi uh Chris Rugverber at Associated

[49:23] Press. Thanks for uh taking our

[49:25] questions. Um could you give us a sense

[49:28] of how you see inflation more in the

[49:30] long term? I know you may not want to

[49:31] comment on the ups and downs, but is

[49:33] this mainly driven by energy prices in

[49:36] the Iran war at this point, or do you

[49:37] have any concerns about underlying

[49:39] inflation pressures in the economy?

[49:42] Thank you.

[49:43] >> So, I can't do much better than than the

[49:45] committee just did, so let me let me

[49:47] restate it. Inflation remains elevated

[49:50] relative to the committee's 2% goal, in

[49:53] part reflecting supply shocks that have

[49:55] driven price increases in certain

[49:56] sectors, including energy. That's

[49:59] paragraph goes on to say but to be clear

[50:02] the Fed will deliver price stability. My

[50:04] own judgment is the committee spent

[50:06] quite a bit of time not just in two days

[50:09] but over iterations of a couple of

[50:11] weeks. That's what we're prepared to say

[50:13] about inflation but the commitment to

[50:15] deliver is strong unanimous and

[50:19] unambiguous and that's I think an

[50:21] important message we've missed for five

[50:23] years and uh and we're going to fix

[50:25] that. Well, great. And then just on your

[50:28] the data task force and everything else.

[50:30] I mean, generally speaking, uh I think

[50:32] people feel the feel the Fed looks at

[50:34] everything already. Certainly that was

[50:36] the sense from before.

[50:38] >> Uh what's is there data that you feel is

[50:41] not given enough weight? Uh I mean you

[50:43] mentioned the trim mean in the past, but

[50:44] again that's well known to certainly

[50:46] most Fed members. So what is that task

[50:48] force looking at and and what what might

[50:50] be the I mean I know you don't want to

[50:52] prejudge the outcome but are there

[50:54] examples of data that you expect might

[50:56] be given more weight. Thank you.

[50:58] >> So you're answering my question so let

[51:01] me say I don't want to prejudge the

[51:02] outcome. I also don't want to say too

[51:04] much about what they're going to do

[51:06] because I still have a phone call or two

[51:07] to make before I've nailed down the

[51:09] people that are doing that. Um I'm

[51:11] interested in what the outside experts

[51:13] view is on the subject. I'll say this

[51:16] generally um most of the data that

[51:20] central bankers and other government

[51:22] officials in the United States consume

[51:25] come with old-fashioned survey methods.

[51:28] >> Uh

[51:29] >> uh a national accounts of the what the

[51:31] US economy looks like that looks very

[51:34] little like the US economy in 2026.

[51:38] um survey methods that don't have

[51:40] response rates that we need, asking

[51:42] questions that might have been quite

[51:43] applicable a generation ago that are

[51:45] less applicable now. So even inside of

[51:48] official statistics, I would be

[51:50] open-minded if the task force and our

[51:53] own best thinking had recommendations

[51:56] how those official statistics can be

[51:58] brought up to a standard of of our time

[52:00] using new analytic methods. I'd also say

[52:03] this, almost every private company CEO

[52:07] that's running his or her business are

[52:09] doing so with real time information that

[52:12] isn't subject to much revision, right?

[52:15] >> That is telling them what just happened

[52:16] at that very moment. As you know, there

[52:19] are normal long and variable lags in the

[52:22] conduct of monetary policy. What we're

[52:24] really interested in is what's happening

[52:27] right now. What we're less interested in

[52:29] is echoes of history. And you're hearing

[52:32] from my answer that some of the data

[52:34] that we receive that we're waiting on

[52:37] the first Friday after the month the

[52:39] payroll index or something else that

[52:41] might be an echo of history that's quite

[52:43] useful on its third revision. We need to

[52:46] take those error bounds down because we

[52:48] have to make hard decisions in real

[52:50] time. I'm really open-minded that there

[52:54] is a lot of new data sources that we can

[52:57] learn from the private sector, from

[52:59] reforms in the official sector, and new

[53:01] analytic techniques that are far more

[53:04] refined than asking a simple question

[53:06] about whether something was core or

[53:08] non-core.

[53:10] >> Edward,

[53:12] >> thanks. Welcome.

[53:13] >> Did I just hear long palunteer?

[53:15] So if you don't give a lot of ongoing

[53:19] forward guidance, won't the markets have

[53:21] more volatility and shouldn't Americans

[53:23] have more access into what you're

[53:24] thinking going forward?

[53:26] >> Um, so I think financial markets

[53:30] perform best when they react to incoming

[53:34] data. I think they the financial markets

[53:37] work less efficiently when they ask a

[53:40] question, how will the Federal Reserve

[53:42] react to that incoming information?

[53:45] Um, the more that markets are paying

[53:47] attention to what's happening in the

[53:50] real economy, deciding what's good data

[53:53] and what's less good data, the more

[53:55] financial markets can price what they

[53:57] believe is the most likely and what are

[53:59] the tail risks. Financial market prices

[54:03] are probably the most important source

[54:05] of information to guide central bankers.

[54:09] But when all the financial markets are

[54:11] doing is reflecting back what we've

[54:13] said, then we're taking the most

[54:15] important source of information and

[54:16] we're being blind to it. I'd like us to

[54:19] create a system where those blinders

[54:21] come off, where markets are following

[54:23] data that they efficiently think is

[54:25] reliable and they'll be watching data.

[54:28] We'll be watching data. They'll come

[54:30] with better information through market

[54:32] prices to us. We can make more informed

[54:34] decisions. But ultimately the goal that

[54:36] I said at the outset, deliver on the

[54:38] price stability objective that Congress

[54:40] told us to do that we've got to get in

[54:42] the business of doing. Yeah. If I could

[54:44] take you in the meeting a little bit. Um

[54:46] so your first meeting the the board

[54:48] members seem fairly hawkish when you

[54:50] listen to in general when you listen to

[54:52] what they're saying. Was there any

[54:53] discussion of a rate cut going forward

[54:55] today?

[54:56] >> Um

[54:58] there was one proposal on the table.

[55:00] There was no discussion of any other

[55:02] proposals. Um the discussion on that

[55:05] proposal I would say was quite limited.

[55:08] The group was unanimous and unambiguous

[55:10] on it. Um it has been the practice of of

[55:14] this central bank and others to have a

[55:16] range of alternatives. Um today we had

[55:20] one I thought it furthered discussion

[55:23] deepened it uh and made it clear what we

[55:26] needed to do and how we needed to

[55:29] deliver. I wouldn't prejudge what

[55:31] happens in the future, but there was

[55:32] only one big subject for us. We took it

[55:35] on. We had a good family fight on it for

[55:37] a couple of days and we ended up, I

[55:39] think, in a better place.

[55:42] >> Claire,

[55:45] >> thanks a lot. Claire Jones, Financial

[55:47] Times. um you know coming to this blind

[55:50] reading this very nice short statement

[55:52] that I think we've all appreciated in

[55:54] the room um one might wonder why you

[55:58] didn't raise rates today considering

[56:01] what you're saying here um about the the

[56:04] risks to

[56:06] your mandate

[56:07] >> waiting for the task force woman

[56:09] >> I guess why not and what would you need

[56:11] to see in order to get to that place um

[56:15] and secondly on your task force

[56:17] divorces. Are there any best practices

[56:19] at other central banks that you'd

[56:21] consider looking at? Thank you.

[56:23] >> Yeah, I'm glad they're in the practice

[56:25] of giving you two questions because my

[56:26] answer to your first question was going

[56:27] to be very curt. I've got nothing more

[56:29] to say than the statement itself. And to

[56:32] the point of the question I got before,

[56:34] market reactions to what we say

[56:36] unfiltered, I think is more helpful than

[56:39] having delivered a statement at me than

[56:41] improvising further upon it. Best

[56:43] practices of task forces. Um, this is a

[56:46] subject I've thought some about. I've

[56:47] been on a task force or two in my life.

[56:50] Um, best practice, find the best minds.

[56:54] Um, ensure that the task forces have a

[56:58] range of people both by backgrounds and

[57:01] predispositions

[57:02] so they too can have a bit of a family

[57:04] fight. Um, make sure when you establish

[57:08] a task force that the group that's going

[57:10] to be the recipient of the information

[57:12] feels as they've got some equities in

[57:13] it, too. That's why we're looking for

[57:16] haven't done the final roll call some of

[57:19] the most significant talent we have in

[57:20] the building and across the reserve

[57:22] banks on each of these and in some sense

[57:24] secunding them to this group for a

[57:26] period of some number of months um so

[57:30] that the leaders of the task force know

[57:32] what the most uh analytical central bank

[57:37] in the world thinks about that they can

[57:39] reflect on it and a final best practice

[57:41] we're not outsourcing decisions to

[57:43] anybody um uh administrations past and

[57:47] present, reserve banks have chosen a

[57:49] group of 19 people around the table.

[57:51] These will be our decisions. We can

[57:53] agree to some of the recommendations,

[57:55] disagree with others, have a good family

[57:57] fight about it, but what comes from them

[58:00] will, I hope and believe, make the

[58:02] discussion we have internally better,

[58:04] stronger,

[58:05] um more of a dialectic so that we can

[58:08] finally deliver.

[58:09] >> This guy sounds like a politician. I

[58:11] mean, you know, some of the stuff he's

[58:12] saying I'm on board with. I don't know,

[58:14] more real-time data. We got AI stuff,

[58:16] but man, he sounds like a politician.

[58:18] >> More tightening is needed. Would that be

[58:20] your read on what the 2-year yield is

[58:22] saying as well?

[58:23] >> We were in such a good place. This is

[58:25] why we don't do third questions, I

[58:26] presume. I'm not going to offer any

[58:28] commentary on market reaction over the

[58:31] last uh 30 or 60 minutes. Um, what we've

[58:34] given markets is a new chapter for the

[58:37] central bank, some fresh thinking. What

[58:40] we've given markets and households and

[58:43] businesses, I think, is a commitment to

[58:46] ask ourselves hard questions such that

[58:49] we can deliver on the promises that

[58:51] we've made before. Um, this is a lot of

[58:55] change for financial markets to digest.

[58:58] I wouldn't be particularly intrigued by

[59:01] how they react in the first several

[59:03] minutes or even first several days. What

[59:05] I think is most important is that

[59:07] financial markets and at least as

[59:09] important households and businesses know

[59:12] that this central bank will deliver on

[59:14] price stability.

[59:16] >> Brian,

[59:18] >> hi there chairman worship. Brian Chung

[59:20] with NBC News. Thank you for taking our

[59:21] questions. So when you say that we've

[59:23] dropped forward guidance for the lay

[59:24] person, that might sound like the Fed's

[59:26] going to say less or offer less insight

[59:28] into where their borrowing costs might

[59:30] go. So for the person that maybe you

[59:32] might run into at the grocery store

[59:34] where the price tags are rising at a

[59:36] faster pace than their wages at the

[59:37] moment, how would you explain it to

[59:39] them? I don't know if task force might

[59:40] be the answer there, but how would you

[59:42] kind of communicate this era, this

[59:44] chapter of the Fed?

[59:45] >> If I told somebody in the milk aisle

[59:48] that I had a task force for that, I

[59:49] think that would be doing a very poor

[59:51] job. So I appreciate it. Um, if I saw

[59:54] somebody in the grocery store, what I

[59:56] would say to them is that we cannot have

[59:59] a very significant effect on particular

[1:00:02] prices. The price of oil in the markets

[1:00:05] today or even the the the price of a

[1:00:07] dozen eggs um that does not have first

[1:00:10] order consequences to what we're doing.

[1:00:12] But we do have a really important job

[1:00:14] there and it's to make sure that those

[1:00:16] changes in oil or beef or eggs or milk

[1:00:20] don't broaden in the economy. Don't have

[1:00:22] second and third order effects. That's

[1:00:24] our job. That's our commitment. That's

[1:00:26] our capability and we're going to

[1:00:28] deliver on it. And then is the Fed's

[1:00:30] relationship with the uh Treasury also

[1:00:33] under review? There was the normal uh

[1:00:34] breakfast meetings with the Treasury

[1:00:36] Secretary. Is that something you intend

[1:00:38] to continue doing? And have you had

[1:00:39] conversations with the president since

[1:00:41] you're swearing it? So on the president,

[1:00:43] I I don't have anything for you. Um with

[1:00:46] respect to the Treasury Secretary, he

[1:00:48] has been posting pictures of our

[1:00:49] breakfast. So I don't think I can I

[1:00:51] don't think I can and deny that. The

[1:00:53] long tradition at the central bank is

[1:00:55] that the Fed chairman and the Treasury

[1:00:57] Secretary meet weekly. Uh I think we've

[1:00:59] pulled off three of those so far. I

[1:01:01] believe he's overseas this week, so this

[1:01:03] will be the exception to the rule. Uh I

[1:01:06] think they're very useful discussions.

[1:01:08] um the central bank's

[1:01:11] uh objectives and our roles and

[1:01:13] responsibilities are quite delineated

[1:01:15] from the fiscal authorities and in my

[1:01:18] view monetary policy is independent in

[1:01:21] the conduct of what we do but that

[1:01:23] doesn't mean we're not interested in

[1:01:24] what's happening with the fiscal

[1:01:26] authorities the way I think about it is

[1:01:28] this central bank needs to have a wide

[1:01:31] lens but a narrow remmit we need to be

[1:01:34] quite interested what's happening in the

[1:01:36] world um I won't be breaking any news

[1:01:39] here to suggest I'm quite interested

[1:01:41] what's happening in the Middle East.

[1:01:43] That does have some some effect on our

[1:01:45] day job. It doesn't mean it's our

[1:01:48] responsibility, but I think we're going

[1:01:49] to keep a wide lens and my meetings with

[1:01:52] Secretary Besson to this point have

[1:01:53] helped widen that aperture. So, we're

[1:01:56] aware of things that could affect our

[1:01:58] day job even if it isn't.

[1:02:01] >> Steve

[1:02:03] >> Steve Leeman, CNBC. Mr. Chair, thank

[1:02:05] you, Mr. Chairman. Thank you for taking

[1:02:06] my question. Um, you had said in the um

[1:02:10] before uh you became chairman that you

[1:02:14] thought productivity was a reason why

[1:02:16] the Federal Reserve could lower interest

[1:02:18] rates. Do you still believe that to be

[1:02:20] the case?

[1:02:22] >> So the committee had a discussion of

[1:02:25] productivity today. AI came up. The way

[1:02:29] I thought about it before and socialized

[1:02:32] with the group is that artificial

[1:02:35] intelligence, the latest generation of

[1:02:37] general purpose technology,

[1:02:40] is perhaps as important a change in the

[1:02:44] economy and business and households that

[1:02:45] we've had in my adult lifetime. It is

[1:02:48] filled with both a huge opportunity and

[1:02:51] with risks. I take both of those very

[1:02:54] seriously. Um, you may have heard me say

[1:02:57] before that AI is shorthand perhaps for

[1:03:01] American ingenuity. That doesn't mean

[1:03:04] that it's going to be easy. That

[1:03:05] certainly doesn't mean it's not going to

[1:03:06] be disruptive. But over the long term,

[1:03:10] my conviction, and I heard quite a bit

[1:03:12] of support for this around the committee

[1:03:14] today, is the United States is a winner

[1:03:17] as we go down this. The United States is

[1:03:19] ultimately going to be better off in

[1:03:21] that. Now to bring that back to the

[1:03:23] conduct of policy, timing, scale,

[1:03:27] speed, implications for output and

[1:03:30] employment. Um it's one of the things we

[1:03:33] have a task force to do.

[1:03:35] >> If you don't mind a followup from the

[1:03:36] other side, which is that when you look

[1:03:38] at the strong job growth that's out

[1:03:40] there, the elevated inflation, GDP seems

[1:03:42] to be going pretty good and the stock

[1:03:44] market seems to be soaring. Do you look

[1:03:47] around this economy and see the funds

[1:03:49] rate being restrictive?

[1:03:51] So um that's your second question. I'm

[1:03:54] going to give the same answer that I

[1:03:55] gave before. I'd say as I think about

[1:03:57] the conduct of policy, what matters is

[1:04:00] what's the effect of policy. Not what do

[1:04:02] we say, but what happens? And the best

[1:04:04] way I can describe is it's uneven. I do

[1:04:06] see some restrictiveness in things like

[1:04:08] housing. It's hard to use those same

[1:04:10] words uh anywhere else. I'll just make

[1:04:13] one other point. Um you talked about uh

[1:04:16] one of our dual mandates in the

[1:04:19] employment side.

[1:04:20] I don't believe that we have a cruel

[1:04:23] choice. I don't share the view that was

[1:04:26] expressed a few generations ago that

[1:04:29] Federal Reserve chairman show up at a

[1:04:31] podium like this and say you got to

[1:04:33] choose and uh you're going to have to

[1:04:36] decide whether you're willing to

[1:04:38] tolerate higher inflation to put more

[1:04:41] people at work. I don't believe in that.

[1:04:44] What I believe is if we do our job, we

[1:04:47] can make strong growth,

[1:04:50] low prices, and strong employment

[1:04:53] mutually compatible. And so what you

[1:04:56] heard from the committee today is we've

[1:04:58] got some work to do on the price

[1:04:59] stability front.

[1:05:01] >> Nick,

[1:05:04] >> thank you. Nick Timos with Wall Street

[1:05:06] Journal. There it is.

[1:05:06] >> Chairman Worsh, you've said repeatedly

[1:05:08] credibility uh is earned by delivering.

[1:05:11] If credibility requires delivering, the

[1:05:14] move would be to tighten or at least to

[1:05:16] threaten to. Now, you didn't do that

[1:05:18] today. Why not?

[1:05:19] >> Um,

[1:05:21] that judgment you expressed was not

[1:05:23] expressed by any of the 19 people around

[1:05:25] the table. Um, we'll be meeting in 6

[1:05:28] weeks. We'll take up the issue again.

[1:05:30] >> And, and if I could ask about AI, the

[1:05:32] buildout is generating enormous demand

[1:05:34] right now. Capex, data centers, power.

[1:05:37] Uh, the productivity payoff may be

[1:05:39] further out. So in your judgment today,

[1:05:41] is AI adding more to demand or to

[1:05:43] supply?

[1:05:44] >> It's a good question. Um,

[1:05:48] at the central bank in an economics

[1:05:50] profession, what we spend most of our

[1:05:53] time doing is counting demand. It's

[1:05:55] easier. We can see it. We can count it.

[1:05:58] We can check it. We can revise it. Um,

[1:06:01] what we do though is we infer supply.

[1:06:04] You'll notice in the second paragraph of

[1:06:08] what one of your colleagues described as

[1:06:09] a very short statement, we have a

[1:06:12] sentence on the demand side and a

[1:06:15] sentence about the same length on the

[1:06:17] supply side. They're both important.

[1:06:20] Just because we can count one better

[1:06:21] than the other doesn't mean we're going

[1:06:23] to favor one more than the other. With

[1:06:25] respect to AI and the growth of data

[1:06:28] centers and infrastructure around it,

[1:06:30] we're counting the demand side and it is

[1:06:32] no doubt showing up in GDP figures.

[1:06:36] We can be less certain when we infer the

[1:06:39] timing and extent of the growth in the

[1:06:41] supply side. It may well be an intuition

[1:06:44] the supply side is going to expand, but

[1:06:46] it'll take longer. I just describe it

[1:06:48] this way. There's a race between supply

[1:06:50] and demand. Milton Freriedman says that

[1:06:53] the only thing we know about economics

[1:06:54] is that there's a supply line and a

[1:06:56] demand line they ultimately cross. When

[1:06:58] they cross and what are the implications

[1:07:00] for policy, the good news for you is we

[1:07:02] have a task force for that.

[1:07:05] >> Andrew,

[1:07:08] >> uh thanks, Mr. Chairman. Um uh it

[1:07:11] sounded like uh on the task force on

[1:07:13] data that that you were looking at

[1:07:15] overhauling or completely overhauling

[1:07:17] the system of national accounts, the way

[1:07:18] the government minds the economy. Is

[1:07:20] that your ambition?

[1:07:23] >> Um, in a word, no. Uh, in a few words,

[1:07:27] uh, much of this data gathering happens

[1:07:29] in other government agencies to which we

[1:07:33] owe a tremendous amount of respect,

[1:07:35] tremendous amount of difference. But if

[1:07:37] in the course of this we come up with

[1:07:39] recommendations

[1:07:41] which Fed staff have already begun to

[1:07:43] develop about things that they could be

[1:07:46] doing to help inform us as policy

[1:07:48] makers. We're not going to hesitate.

[1:07:50] Again, I don't want to try to uh

[1:07:53] delineate the four corners of the

[1:07:55] research of the task force on data, but

[1:07:58] I do think there will be a review of

[1:08:00] official statistics and at least as

[1:08:02] important a view of bringing the best

[1:08:04] practices from the private sector and

[1:08:07] new analytical tools made possible by AI

[1:08:10] so we can forge these into a fabric that

[1:08:13] gives us better real-time information.

[1:08:15] And so, as I mentioned before, when

[1:08:17] we're making decisions, we're making

[1:08:19] decisions that we'd say are real

[1:08:21] contemporaneous data, not data that we

[1:08:24] call contemporaneous. That's really an

[1:08:26] echo of history.

[1:08:27] >> Child's here.

[1:08:28] >> Okay. Um, thanks. Uh, the other question

[1:08:30] I wanted to ask is uh related to the the

[1:08:32] building renovations. Are you

[1:08:34] considering any changes to the

[1:08:36] renovations, the projects um just in

[1:08:38] light of the fact that they became kind

[1:08:39] of a political football in the last

[1:08:41] year?

[1:08:42] >> I heard something about that. Um

[1:08:45] uh I don't think I'm breaking any news,

[1:08:47] but my view when you show up at a new

[1:08:50] institution, you should go meet with the

[1:08:52] inspector general just as a matter of

[1:08:54] good practice. Um it's a practice that I

[1:08:57] hope to continue. I've had one meeting

[1:08:59] with the inspector general and he told

[1:09:02] me what I believe the world knows, which

[1:09:04] he'll be coming out with a report on the

[1:09:07] building and the building projects at

[1:09:09] some point later this summer. Um, and

[1:09:12] uh, I'll be interested in reading the

[1:09:14] report. From my perspective, with a

[1:09:17] forward-looking glance, is there

[1:09:19] anything that we can be doing or should

[1:09:21] be doing from this moment until the

[1:09:23] completion of the project to do what we

[1:09:25] can to be good stewards of taxpayer

[1:09:27] money and to make sure that the we're

[1:09:30] delivering on the the promises that we

[1:09:32] made. Uh, some more work to do. You

[1:09:34] might not be surprised in the first few

[1:09:36] weeks. I've been somewhat preoccupied on

[1:09:38] other matters, but I promised it to to

[1:09:40] get to the full breath of the Fed's uh

[1:09:42] tasks in the weeks ahead.

[1:09:45] >> Victoria,

[1:09:48] >> hi Victoria Guido with Politico. Um, so

[1:09:51] I know that you did not submit a

[1:09:53] forecast, but you are the person who is

[1:09:55] authorized to speak on behalf of the

[1:09:57] FOMC. So I'm wondering if you could tell

[1:09:58] us in the SCP um the increase in the

[1:10:01] expectations for inflation. Is that all

[1:10:05] because of the Iran war? What was the

[1:10:08] discussion around what the expectations

[1:10:10] for inflation being higher and and also

[1:10:12] potentially growth being slower? So um

[1:10:17] my read of what I heard in the room

[1:10:21] reflected I must admit in the SCPs is

[1:10:24] half of my colleagues thought the policy

[1:10:27] rate given all those developments should

[1:10:29] be at this level or lower between now

[1:10:31] and your end and the other half thought

[1:10:33] higher. Um that 19th voter was me and I

[1:10:36] didn't submit one. Um there's a range of

[1:10:39] views on the questions of of uh first

[1:10:43] and second round effects. Uh no

[1:10:46] resolution or conviction, but we'll be

[1:10:50] meeting again in 6 weeks. I think we're

[1:10:52] going to know more then and I think that

[1:10:55] my colleagues are very attentive to

[1:10:58] incoming developments between now and

[1:11:00] then.

[1:11:01] >> And can I just quick follow up on the

[1:11:03] SCP? You said that you're still

[1:11:04] encouraging your your your fellow

[1:11:07] committee members to submit forecasts

[1:11:08] even if you're not doing it. So what do

[1:11:10] you think is the benefit of them doing

[1:11:11] it even if you don't?

[1:11:13] >> Uh that's the commitment that the FOMC

[1:11:15] made and it's a commitment that I hope

[1:11:18] we live up to. Commitment we made was to

[1:11:21] deliver price stability. I expect us to

[1:11:23] live up to it by the time we get to the

[1:11:26] end of this year. As I mentioned, I

[1:11:29] wouldn't be surprised if there was a new

[1:11:32] communications framework. There were

[1:11:33] some changes. The SCP, that's a

[1:11:36] committee discussion, a robust

[1:11:38] discussion. I think we'll have it. I

[1:11:40] believe we're going to come to a better

[1:11:42] mix of communications to

[1:11:45] um deliver on what we've promised, but I

[1:11:48] wouldn't want to prejudge what those

[1:11:50] are. But between now and then, I would

[1:11:52] continue to expect colleagues to submit

[1:11:53] their SEPs. Um some of them uh I think

[1:11:59] believe that the practice is currently

[1:12:00] structured is okay but I heard a lot of

[1:12:03] interest in real reform generally about

[1:12:05] all these topics. Uh you didn't ask it

[1:12:08] but I'll answer. It was a it was a

[1:12:10] pretty gracious couple of days and it's

[1:12:12] been a pretty

[1:12:14] uh warm few weeks. The institution wants

[1:12:18] to figure out how we can do better. the

[1:12:21] institutions going back to first

[1:12:23] principles and I'm encouraged that what

[1:12:25] we've done in the statement what we're

[1:12:27] thinking about doing with respect to the

[1:12:28] SCP that instinct towards a new chapter

[1:12:32] is a real one and by the end of the year

[1:12:34] I hope we can put some points on the

[1:12:36] board both in form and in substance of

[1:12:39] delivering

[1:12:41] >> going to end up for the last question

[1:12:43] >> last question you Mr. chairman current

[1:12:46] Bloomberg News. Could you guide us

[1:12:48] through please some of the principles

[1:12:50] that guide your own reaction function

[1:12:52] and tell us a little bit about kind of

[1:12:54] conditions that you think when the Fed

[1:12:56] should respond?

[1:12:58] >> Um it's going to be a very

[1:13:00] unsatisfactory answer to the final

[1:13:02] question.

[1:13:04] The Federal Reserve

[1:13:07] uh has a lot of responsibilities not

[1:13:09] just in monetary policy but in

[1:13:11] supervision and regulation, consumer

[1:13:13] affairs and payments.

[1:13:15] My own view is our credibility comes

[1:13:18] from delivering on what we're saying

[1:13:20] we're going to do across everything we

[1:13:22] do. Um I've devoted more time in my

[1:13:26] first three weeks to monetary policy

[1:13:28] than all those things. But the more we

[1:13:30] deliver on our promises as good

[1:13:32] supervisors and good regulators, the

[1:13:34] more benefit we get, the more

[1:13:35] credibility enhancement we have in

[1:13:37] monetary policy. When we deliver on our

[1:13:41] price stability objectives, which we

[1:13:43] will, uh, the American people will feel

[1:13:46] as though the hardships that they've

[1:13:48] been living through in part because of

[1:13:50] inflation the last 5 years are in the

[1:13:51] rearview mirror and that credibility

[1:13:54] will have dividends uh, dividends across

[1:13:56] what we do. and the institution will

[1:13:58] come to press conferences like this

[1:14:00] always with an impetus to reform always

[1:14:02] with an impetus to to do better but

[1:14:05] we're going to put some points on the

[1:14:06] board and Mr. had strong labor data in

[1:14:09] recent months. How would you sum up the

[1:14:11] labor data labor market right now? Do

[1:14:13] you see it as stable as a potentially a

[1:14:15] source of inflation? Thank you.

[1:14:16] >> Yeah. So, so the committee

[1:14:20] uh if I were to try to capture how the

[1:14:22] committee thought about it, the

[1:14:23] committee thought that the labor markets

[1:14:25] were stable. There were some people

[1:14:28] around the committee who thought that it

[1:14:30] was trending better than that.

[1:14:33] Uh trends matter more than data points.

[1:14:37] uh what's happening over three or six

[1:14:39] months matters more than any one data

[1:14:41] point any one data release and I'd say

[1:14:44] the jobs data has been moving in a good

[1:14:46] direction. If I heard one other thing

[1:14:49] around that subject over the course of

[1:14:51] the last couple of days what I heard was

[1:14:55] that strong productivityled growth is

[1:15:00] not something that we fear but something

[1:15:01] we embrace. Thank you all very much. M

[1:15:05] five 3 2

[1:15:09] >> Okay. Well, there you have it. We have a

[1:15:12] new fed chair. And boy oh boy, he uh

[1:15:16] he's pretty dry,

[1:15:19] man. JP was fun. This guy, I don't know.

[1:15:24] All right, let's do a review of what the

[1:15:25] heck is uh going on here. Uh dang, Robin

[1:15:28] Hood's up 12 and a half% right now.

[1:15:30] That's crazy. That was uh one of our

[1:15:32] calls this morning in the alpha report.

[1:15:34] Uh thank you everybody who's a member

[1:15:35] over there at mekevin.com. But for now,

[1:15:37] let's focus on what we just got. Uh so

[1:15:41] let's get into it. Uh here we go.

[1:15:45] Take a sip of this coffee, too.

[1:15:50] Well, we just got a new Jerome Powell

[1:15:52] dude. Except this guy is dry like

[1:15:55] sandpaper. He sounds like a politician.

[1:15:58] We're probably stuck with the guy for

[1:16:00] two four-year terms. So, eight years.

[1:16:03] Eight years of this. And boy, every

[1:16:06] freaking question that he gets as it's

[1:16:08] almost like he's trying to train the

[1:16:10] media to not ask him. His responses are

[1:16:13] either I don't give forward guidance.

[1:16:16] Ask the task force. Actually, you can.

[1:16:19] The task force will let you know. He's

[1:16:22] This is going to be weird, but let me

[1:16:24] just start with what I think he's doing.

[1:16:27] and then we'll get into some more of

[1:16:29] what he said because there's a lot of

[1:16:32] reading between the lines you have to do

[1:16:33] with this guy. So, let me give you the

[1:16:35] bottom line first because I respect your

[1:16:37] time. Bottom line, bullish.

[1:16:41] Why? Cuz this guy is probably going to

[1:16:45] change which measure of inflation they

[1:16:49] use. I think they're going to dump PCE

[1:16:53] inflation and I think they'll end up

[1:16:55] using something like the Dallas Fed

[1:16:58] trimmed mean inflation, which if you

[1:17:00] look at this, you could actually see

[1:17:02] right now it's sitting at 2.55%.

[1:17:04] It's been falling pretty stably. I mean,

[1:17:08] yes, we've got ups and downs like the

[1:17:09] stock market, but the trend is clearly

[1:17:11] down here. And if you look at the actual

[1:17:13] trim mean chart and you get into some of

[1:17:15] the details of it here, the one-mon

[1:17:17] level is at that 2.55 level. six-month

[1:17:20] level at 2.3. So, you're actually almost

[1:17:22] there at 2%. And if you come in and your

[1:17:25] task force says, you know, we should be

[1:17:27] using a different measure of inflation.

[1:17:29] And then you swap to something like trim

[1:17:31] mean now you can magically say, hey,

[1:17:35] look at this. We have officially reached

[1:17:38] 2% inflation. Guess what, boys and

[1:17:41] girls? It's time for rate cuts. That's

[1:17:44] my take with what he's doing with rates.

[1:17:48] Now he indicates that he's essentially

[1:17:51] setting up five different task forces.

[1:17:53] One on communications, one on the

[1:17:55] balance sheet, one on data sources, one

[1:17:57] on productivity and jobs, and one on

[1:17:59] inflation. I think the inflation task

[1:18:01] force will end up measuring inflation in

[1:18:03] a different way. That'll make his job

[1:18:05] easier because the productivity and jobs

[1:18:08] one is going to take into account quote

[1:18:10] implications from AI. That's a fancy way

[1:18:13] of saying exactly what he's been

[1:18:15] forecasting that he thinks artificial

[1:18:17] intelligence is deflationary, increases

[1:18:20] labor force productivity, and therefore

[1:18:22] we could lower rates while facing

[1:18:24] disinflation from AI, and we don't

[1:18:27] actually have to worry about inflation.

[1:18:28] Now, a lot of people are going to be

[1:18:29] really pissed about that because he

[1:18:31] comes out and he's literally like, I'm

[1:18:33] not really worried about the price of

[1:18:34] eggs or price of beef. I'm worried about

[1:18:36] broader measures of inflation and

[1:18:39] specifically utilizing real time data.

[1:18:42] Now, that's something else. I mean, I

[1:18:44] basically heard him say, "Long

[1:18:46] Palunteer, boys and girls." And I'll

[1:18:48] tell you, I just watched the first of

[1:18:49] the Lord of the Rings trilogy and I

[1:18:52] learned what a palunteer was that all

[1:18:54] steaming bald at communicating crystal

[1:18:56] ball. It's not really crystal, it's more

[1:18:58] clear, but anyway, kind of cool. I

[1:19:02] actually agree with this. Basically,

[1:19:04] Kevin Worsh came out and said, "Look,

[1:19:06] why are we worried about jobs data that

[1:19:09] comes out at the beginning of every

[1:19:10] month, but it's not actually useful to

[1:19:12] us until the third revision?" So,

[1:19:14] basically, you know, 3 months later, why

[1:19:17] don't we actually use real time data and

[1:19:20] then incorporate AI with that data? And

[1:19:23] so AI and other real-time sources of

[1:19:26] data can actually tell us what's

[1:19:27] happening in the economy in real time

[1:19:30] rather than relying on the these old

[1:19:32] reports that are subject to a lot of

[1:19:34] revisions and are subject to really low

[1:19:36] response rates. He's not wrong about

[1:19:39] this. Postcoid the response rates

[1:19:41] plummeted for the job survey for the

[1:19:43] jobs the uh opening and labor turnover

[1:19:46] survey. All of these have gotten reamed

[1:19:48] in response rates and so the surveys

[1:19:50] aren't as useful as they used to be. A

[1:19:53] lot of the surveys are getting filled in

[1:19:55] sort of backfilled in with estimates or

[1:19:57] assumptions, seasonal adjustments. So

[1:20:01] he's not wrong. I actually kind of

[1:20:03] support the idea of using more updated

[1:20:06] me like tools to determine what's going

[1:20:08] on with the economy. For example, you

[1:20:11] know, that could be based on earnings.

[1:20:12] It could be based on guidance from CEOs.

[1:20:14] It could be based on actual hiring. Like

[1:20:17] even the Jolt survey includes a lot of

[1:20:21] job openings that aren't actually really

[1:20:23] open anymore. They're just like

[1:20:24] forgotten listings on online hiring

[1:20:26] websites when you could probably use AI

[1:20:29] to measure the delta, right? change of

[1:20:32] job openings month-to-month much faster

[1:20:34] by analyzing big data probably using

[1:20:37] software like Palanteer frankly uh and

[1:20:40] uh and and analyzing month-to-month

[1:20:42] changes as opposed to these aggregates

[1:20:45] that could be full of old data. So, I

[1:20:48] don't know that I'm making assumptions

[1:20:51] on some of those components, but I'm

[1:20:53] building in what he said, which was we

[1:20:55] want better sources of data from the

[1:20:57] private market. We want uh information

[1:21:00] that is real- time information. We want

[1:21:02] to use artificial intelligence. We don't

[1:21:04] want to give forward guidance and then

[1:21:05] the economy freaks out to what we're

[1:21:07] saying. In fairness here, I thought that

[1:21:10] Kevin Walsh was going to uh talk down

[1:21:13] the risk of rate hikes. The most he

[1:21:16] really said about rate hikes was eh half

[1:21:19] the people are telling me they want rate

[1:21:20] hikes, half say they don't want rate

[1:21:22] hikes. Okay, fine. which let's look at

[1:21:25] what's actually happening in the bond

[1:21:26] market and what's happening with the

[1:21:28] odds of rate hikes and you'll kind of

[1:21:30] see why the market is reacting the way

[1:21:31] it is. Just a quick note this morning we

[1:21:35] shouted out Robin Hood as potentially

[1:21:37] being a part of the next sector to get a

[1:21:40] lot of momentum and since our shout out

[1:21:43] the stock is up 12 freaking%. We shouted

[1:21:46] this out at $96. It's trading at $108

[1:21:49] right now. Now, we've done some more

[1:21:50] fundamental analysis on it as well. Uh

[1:21:52] over in the Meet Kevin app for course

[1:21:54] members, major Meet Kevin stock AI

[1:21:57] update came out uh last week for course

[1:21:59] members. You could get a free sample as

[1:22:01] well. Uh we're coming out with the alpha

[1:22:03] wire service within the next 24 hours

[1:22:05] for course members. And so, of course,

[1:22:07] we'll be raising the price again. But

[1:22:09] for now, you could use coupon code pope.

[1:22:11] Uh that's mostly because the Pope gave

[1:22:13] me a nod while I was wearing the

[1:22:14] Reinvest shirt in Barcelona a few days

[1:22:17] ago. You could see that on X. But

[1:22:19] anyway, join and get all nine courses,

[1:22:20] every trade alert, every private live

[1:22:22] stream, every alpha report, allin-one

[1:22:24] membership over at meetke.com. Okay, for

[1:22:26] now though, uh in addition to awesome

[1:22:29] shoutouts, let's focus on what's not so

[1:22:32] awesome, and that is that we only have a

[1:22:34] 20% chance right now of actually staying

[1:22:37] stable by the end of the year on the CME

[1:22:40] futures market. This is bad. We've

[1:22:42] literally gone from about a 55% chance

[1:22:45] of a rate hike by the end of the year to

[1:22:47] an 80% chance of a rate hike by the end

[1:22:49] of the year. This is why markets are

[1:22:51] pissed off. In my opinion, they are

[1:22:54] wrong. They are absolutely wrong. And

[1:22:56] I'll show you why in just a moment. By

[1:22:58] July 28th, markets are pricing in only a

[1:23:02] 17% chance that we will be stable or

[1:23:04] lower, which is, you know, an 83% chance

[1:23:07] that we're going to get a hike or

[1:23:09] multiple rate hikes by July 27th uh of

[1:23:13] 2027 or sorry, July 28th of 2027. This

[1:23:17] is wrong in my opinion. But looking at

[1:23:19] the bond market, you could actually see

[1:23:21] the bond market is really plummeting the

[1:23:25] odds of a shock from policy. We can see

[1:23:28] the 102 yield curve has dumped today

[1:23:31] about nine basis points, which is a

[1:23:33] massive plummet. The chart has

[1:23:35] absolutely crashed on this, which is

[1:23:37] actually bullish for the economy. Now,

[1:23:41] why is this happening? It's happening

[1:23:43] because the 2-year yield is rising

[1:23:46] slightly and the 10-year yield is rising

[1:23:49] more. You can see the 2-year right now

[1:23:51] is sitting up about 14 bips. And if I

[1:23:55] jump over to the 10year, I want to say

[1:23:57] it's up somewhere around uh 34. Let's go

[1:24:00] here. Come on. Come on. Come on. There

[1:24:02] it is. Oh, 4.7 or 0.047 I should say. So

[1:24:07] 4.7 bips versus here about actually wow

[1:24:10] 14. No, you've actually come up quite a

[1:24:12] lot on the 2-year. So, that's actually

[1:24:14] very interesting. This is this is the

[1:24:15] market responding heavily to this idea

[1:24:19] that uh hey, all right, it sounds like

[1:24:22] we're going to get hikes. It's the same

[1:24:23] thing you see over here on the CME watch

[1:24:25] group. But that is not what the summary

[1:24:28] of economic projections is actually

[1:24:30] forecasting. This is why I think the

[1:24:32] market is wrong to assume we're going to

[1:24:33] get rate hikes this year. First of all,

[1:24:35] I think Kevin Worsh is going to change

[1:24:37] the definition of inflation and

[1:24:39] therefore we won't need rate hikes

[1:24:41] because we'll magically be at 2%. I

[1:24:44] think that's coming. But even beyond

[1:24:46] that assumption, look at the summary of

[1:24:48] economic projections. With 50% of the

[1:24:51] staff not pricing at a rate hike, the

[1:24:54] average of Fed staffers still sees

[1:24:57] inflation going from 3.3 to 3.4 all the

[1:25:00] way down to 2.3 to 2.4. That is a 1%

[1:25:04] decline as we roll over from tariffs,

[1:25:06] Iran, and AI supply shortages, a lapping

[1:25:08] of annual inflation. There's a 1%

[1:25:10] decline is being priced in without a

[1:25:13] guaranteed rate hike here. So, I'm I'm

[1:25:15] sort of surprised that the market is

[1:25:17] believing that, you know, Kevin Worsh

[1:25:19] just implied there's going to be a rate

[1:25:20] hike. I don't see that at all. In fact,

[1:25:22] I could see here you've got one

[1:25:24] knucklehead who thinks rates should be

[1:25:25] at 4.4%.

[1:25:27] Uh, five think there should be two

[1:25:29] hikes, one think there should be one

[1:25:31] hike. This is for 2026. But the vast,

[1:25:34] you know, the bulk of people right here

[1:25:35] are at a hold. And I think the bias is

[1:25:38] going to be towards holding and waiting

[1:25:40] because you don't want to repeat what

[1:25:41] happened in the 1970s. In the 1970s, we

[1:25:45] saw a lot of up and down adjustments

[1:25:46] that actually contributed to a lot of a

[1:25:49] lack of faith or confidence in the

[1:25:51] Federal Reserve and ended up getting us

[1:25:53] Paul Vulkar to sort of put the pants

[1:25:55] back on at the Fed. No sign here that

[1:25:57] the unemployment rate has any issues. In

[1:26:00] fact, Kevin Worsh himself mentioned that

[1:26:01] he is hearing a lot about how stable the

[1:26:04] unemployment market or the employment

[1:26:06] market, the jobs market is right now.

[1:26:08] Uh, it also should not have been a

[1:26:09] surprise that the summary of economic

[1:26:11] projections implied a rate hike over

[1:26:13] here. The market did turn down as soon

[1:26:16] as we got this. That shouldn't have been

[1:26:17] a surprise. We've already been pricing

[1:26:19] in a rate hike all year long. So, I was

[1:26:22] surprised the market did go down after

[1:26:24] this because we've already known the

[1:26:26] bond market was pricing in one hike rate

[1:26:27] hike for 2026. In fact, at one point it

[1:26:30] was pricing in a rate hike for 2026 and

[1:26:32] a rate hike for 2027. Bond market

[1:26:34] actually still is. But the summary of

[1:26:36] economic projections is pricing in a

[1:26:38] rate hike for 2026 and a rate cut for

[1:26:41] 2027.

[1:26:43] It's up 25 basis points this year and

[1:26:45] down 25 basis points this year. Now,

[1:26:47] somebody did or next year. Uh, somebody

[1:26:49] did hawk this meeting a lot. Somebody

[1:26:52] actually thinks the rate should be up

[1:26:54] almost one full percent. But that's only

[1:26:57] one person at the Fed. That's that one

[1:26:59] dot, that one knucklehead who's really

[1:27:01] hawkish right now. And it's not Kevin

[1:27:03] Worsh because Kevin Worsh didn't fill

[1:27:05] out any projections at all. He abstained

[1:27:07] from filling out anything. Uh their

[1:27:10] statement was also substantially

[1:27:12] shorter. They've removed essentially all

[1:27:13] forms of forward guidance. Uh and I hate

[1:27:17] to say it, but the market's revisiting

[1:27:18] the 725 support line. We bounced off of

[1:27:21] it earlier when we got the statement. We

[1:27:24] are falling into the close which

[1:27:25] unfortunately does mean that triple

[1:27:26] leveraged funds are likely to come out

[1:27:28] and also sell into the close as SpaceX

[1:27:31] is likely to have its first red day

[1:27:32] here. I am bearish uh SpaceX long-term

[1:27:35] even though I hold SpaceX. Uh once we

[1:27:38] get to July and we start getting

[1:27:39] lockups, I think a lot of people are

[1:27:41] going to be running for the exit on it

[1:27:42] and I think there'll be better chances

[1:27:43] and better opportunities to buy SpaceX.

[1:27:45] Uh we are looking for new sectoral

[1:27:47] leadership could end up continuing to be

[1:27:49] finance especially after that boost we

[1:27:51] saw at Robin Hood today. SoFi might be

[1:27:53] another beneficiary of that, especially

[1:27:55] with their home lending sector really

[1:27:57] exploding. But really long term here, so

[1:28:00] ignoring kind of shorter term moves in

[1:28:01] the market. Long-term, Kevin Walsh

[1:28:04] really came out here and suggested we're

[1:28:06] going to have a lot of changes. That if

[1:28:09] you look at the housing market, Federal

[1:28:10] Reserve policy is restrictive. If you

[1:28:12] look at the stock market, it's not. He

[1:28:14] thinks that inflation is a choice, but

[1:28:16] they don't have major urgency right now.

[1:28:19] that they have the luxury of time right

[1:28:21] now to sit down and sort of reanalyze

[1:28:23] how they want to put data together.

[1:28:25] Whether they're going to have press

[1:28:26] conferences or not depends on whether

[1:28:28] they have an announcement to make or

[1:28:30] some kind of press conference to give.

[1:28:32] He thinks that press conferences should

[1:28:33] really be reserved for when you have

[1:28:34] something useful to say. So, there is a

[1:28:36] potential future where we get fewer

[1:28:38] press conferences with Kevin Borch. We

[1:28:40] get a different inflation regime that

[1:28:43] suggests, oh, inflation's actually good.

[1:28:45] He's probably going to push rates down

[1:28:48] over his term. I actually expect we'll

[1:28:50] have lower rates than ever before by

[1:28:52] 2032. This is a mindset that I've had

[1:28:54] for the last four years. And I think

[1:28:56] that'll that'll be true. And I think

[1:28:57] he's going to use essentially more

[1:29:00] real-time data, potentially

[1:29:01] incorporating AI data to guide the Fed

[1:29:05] on where they should be with policy.

[1:29:07] Obviously, there's some risks with that.

[1:29:09] We've never had AIEL data controlling

[1:29:12] Fed policy or at least advising Fed

[1:29:14] policy. So, it's going to be interesting

[1:29:15] to see how all this plays out. But I

[1:29:17] think the bias here is hold until we

[1:29:21] get, you know, a new explanation for the

[1:29:24] economy and then probably cut. Today,

[1:29:27] though, markets are really pricing in a

[1:29:29] lot of rate hikes, right? I mean, this

[1:29:31] this is very aggressive. You've got uh

[1:29:35] probably two to even three, maybe even

[1:29:37] four rate hikes priced in over here

[1:29:39] going through the summer of 2027. And

[1:29:41] again, you go to the end of the year,

[1:29:42] you're pricing in one to two hikes with

[1:29:45] an equal chance, basically a one-/ird

[1:29:47] chance for each of them of a rate hike

[1:29:49] by the end of the year. I personally

[1:29:51] think this is totally wrong and it makes

[1:29:52] me bullish because I think money is made

[1:29:55] when people are not looking at certain

[1:29:57] stocks. I think in 2022 when I was

[1:30:01] loading up on Nvidia, which ended up

[1:30:02] being a 10x in my portfolio, made

[1:30:05] millions of dollars. I was really

[1:30:06] grateful for that. Everybody was making

[1:30:08] fun of me for buying chips then. It's

[1:30:10] kind of like, you know, today it's

[1:30:11] really unpopular to buy certain stocks

[1:30:14] that are printing money that are really

[1:30:16] cheap in their valuation and they're

[1:30:20] cheap at the same time as the market is

[1:30:22] pricing in rate hikes when I think we're

[1:30:24] actually more likely to get rate cuts.

[1:30:25] Now, we'll see. I could be wrong.

[1:30:27] Obviously, you know, that's what makes

[1:30:29] us human after all. But if you want to

[1:30:31] see exactly what I'm investing in,

[1:30:32] consider joining us over at mekevin.com.

[1:30:34] You could use that coupon code pope. Uh

[1:30:37] the reason again that pope is because uh

[1:30:39] we actually got that nod from the pope

[1:30:41] over here which I was really happy

[1:30:42] about. I was wearing the reinvest polo

[1:30:45] and uh yeah gotta say it's uh it's it's

[1:30:48] kind of cool. Uh was not expect people

[1:30:50] wait hours to see the pope and then we

[1:30:52] got the nod right there. How sick is

[1:30:54] that?

[1:30:56] So uh somebody told me it's it's um not

[1:31:00] blasphemous to say the pope likes you or

[1:31:02] gives you a nod. Only if you use God in

[1:31:04] that reference. So that that was good.

[1:31:07] Uh but anyway, that gives us a little

[1:31:08] bit of a uh breakdown of what's going on

[1:31:12] uh with uh Kevin Walsh. I I will say

[1:31:14] he's a little bit boring, a little bit

[1:31:16] of a politician. I uh expect a lot of

[1:31:19] changes to come from the Federal

[1:31:20] Reserve, but I think that they will bias

[1:31:22] down. And again, if you look at the

[1:31:24] summary of economic projections, you

[1:31:26] could even see that bias down on rates

[1:31:28] here. Uh and I think they're going to

[1:31:30] repel from that noisiness of, you know,

[1:31:33] oh, we're going to hike and then we're

[1:31:34] going to cut. I think that's a terrible

[1:31:36] idea. And in fact, I think one of the

[1:31:38] most powerful comments that I heard was

[1:31:41] Kevin Worsh was asked, hey, you know,

[1:31:43] was there like a consensus from the

[1:31:44] committee? And the consensus was that

[1:31:46] there is no consensus. He in fact called

[1:31:49] everybody pretty humble and uh, you

[1:31:51] know, pretty willing to listen to other

[1:31:53] commentary and potentially even change

[1:31:54] their minds. Uh, and so there was no

[1:31:57] overbearing push towards one direction

[1:31:59] or another, which is very consistent

[1:32:01] with my belief that we're likely to do

[1:32:03] nothing until we get a cut. The market

[1:32:06] is totally mispricing that in my

[1:32:08] opinion, which creates a long-term

[1:32:10] buying opportunity. So, yes, that makes

[1:32:12] me bullish. Probably sitting somewhere

[1:32:14] around an 8.3 on the bare bull scale

[1:32:16] right now, which, you know, was pretty

[1:32:19] elevated. Um, certainly not desiring

[1:32:22] rushing into debt. I'm not a big fan of

[1:32:24] debt uh because I do think that uh there

[1:32:27] you know the next time we have a

[1:32:28] recession whenever that comes it will be

[1:32:30] one of the worst and Kevin Worsh will

[1:32:33] actually contribute it contribute to it

[1:32:35] being bad. He'll cut rates to zero but

[1:32:37] he won't print money like the other guys

[1:32:39] like a Paul Vulkar or Janet Yellen or

[1:32:41] Jerome Powell. He won't print money like

[1:32:42] them or at least he'll try to resist

[1:32:43] from that. I think that his task force

[1:32:46] will also advise just that which uh is

[1:32:48] is unfortunately bearish for a

[1:32:51] recessionary period which makes me very

[1:32:53] uninterested in debt. But with that

[1:32:56] said, uh overall I'm optimistic here. I

[1:32:59] I I hate to say that I like what I heard

[1:33:02] because I'm tired of hearing task force.

[1:33:05] I am excited though about hearing, hey,

[1:33:07] we're going to update like how we

[1:33:09] collect data and how we analyze data.

[1:33:12] Honestly, it's long been needed. So,

[1:33:14] we'll see what they come up with, but

[1:33:15] respect for trying because I agree that

[1:33:18] that the data is quite dated. Anyway,

[1:33:21] there you go. Thanks so much for being

[1:33:22] here. I always appreciate you watching.

[1:33:24] Uh, consider sharing. Subscribe to the

[1:33:26] video or the channel. Feel free to

[1:33:28] follow me on XMEK or on Instagram at

[1:33:31] realme Kevinev. I try to post there

[1:33:32] every day. And, uh, go to meet Kevin.com

[1:33:34] and use that coupon code pope.