WEBVTT 00:00:00.009 --> 00:00:01.558 What, what, what's happening? Why is the 00:00:01.570 --> 00:00:03.508 room dark? We were expecting the speech about four 00:00:03.519 --> 00:00:06.658 minutes ago. What's going on? Uh This has 00:00:06.669 --> 00:00:09.319 happened before with public figures, apparently a group of 00:00:09.329 --> 00:00:13.569 climate activists have interrupted the meeting and they've escorted Jay 00:00:13.579 --> 00:00:16.870 Powell off stage and I presume David Weston as well 00:00:16.879 --> 00:00:19.000 to keep them safe for the time being while they 00:00:19.010 --> 00:00:22.158 calm things down. So, um it doesn't seem 00:00:22.170 --> 00:00:25.388 to have anything to do with money policy and certainly 00:00:25.399 --> 00:00:28.798 climate change doesn't have a lot to do with the 00:00:28.809 --> 00:00:32.719 Feds activities, but they are using this platform to 00:00:32.728 --> 00:00:34.848 try and make a point. So we are now 00:00:34.859 --> 00:00:37.978 waiting, we in, in on hold to see 00:00:37.990 --> 00:00:40.399 when they get the room cleared and then can bring 00:00:40.408 --> 00:00:45.048 the chairman back. Mike. Let's just, let's 00:00:45.060 --> 00:00:46.740 just talk about what's happening cos we, we're all 00:00:46.750 --> 00:00:47.908 waiting for the speech now. So we're trying to 00:00:47.918 --> 00:00:50.609 figure out that we're trying to interpret the market reaction 00:00:51.039 --> 00:00:53.060 to what we've heard the comments that you brought us 00:00:53.069 --> 00:00:55.289 a little bit earlier on. The sense seems to 00:00:55.298 --> 00:00:59.200 be that the comments that are being delivered are not 00:00:59.209 --> 00:01:00.609 pushing back on current market, pricing the market. 00:01:00.618 --> 00:01:04.109 Therefore, is taking this as actively Dovish maybe in 00:01:04.120 --> 00:01:06.778 line with some of the other fed speak that we've 00:01:06.790 --> 00:01:10.219 seen recently. Is that your interpretation, we're seeing 00:01:10.230 --> 00:01:11.519 rate hikes being priced a little more softly. Uh 00:01:11.528 --> 00:01:14.579 We're seeing the yields coming down a little bit, 00:01:14.588 --> 00:01:17.168 particularly at the front end. Do you think having 00:01:17.180 --> 00:01:19.159 read the comments that this is the message that, 00:01:19.168 --> 00:01:22.439 that Jay Powell is hoping to deliver in this conversation 00:01:23.948 --> 00:01:25.448 ? I think so. I think what he was 00:01:25.459 --> 00:01:27.540 trying to do was basically come in line with what 00:01:27.549 --> 00:01:30.209 we've heard from at least 12 other members of the 00:01:30.219 --> 00:01:34.219 committee since their last meeting, suggesting that the real 00:01:34.230 --> 00:01:36.849 rates are doing enough of the job and at this 00:01:36.859 --> 00:01:40.808 point, they can pause and you see that result 00:01:40.819 --> 00:01:42.939 in the fed funds futures, there wasn't much of 00:01:42.948 --> 00:01:46.689 a percentage chance of a rate increase given by the 00:01:46.698 --> 00:01:49.088 markets for November 1st and now it's down to 5% 00:01:49.239 --> 00:01:53.168 . So it looks like investors are understanding this as 00:01:53.180 --> 00:01:57.198 essentially a Dovish speech. I'm not sure if Dove 00:01:57.209 --> 00:02:01.239 and Hawk applies in this case because the fed is 00:02:01.250 --> 00:02:04.819 pretty much almost done anyway, but it does suggest 00:02:05.168 --> 00:02:07.469 not to expect anything on November 1st from the fed 00:02:07.528 --> 00:02:09.330 . But I wonder if it also talks about the 00:02:09.338 --> 00:02:12.368 the cuts. It feels like a lot of the 00:02:12.379 --> 00:02:15.050 movement, Mike has been pricing out cuts for next 00:02:15.058 --> 00:02:17.189 year and if that's where you're maybe going to see 00:02:17.199 --> 00:02:22.419 that whole pancake curve. And I wonder if how 00:02:22.429 --> 00:02:24.409 , how Powell addresses that while staying on his message 00:02:25.788 --> 00:02:29.379 , I think that might be something that David will 00:02:29.389 --> 00:02:31.360 ask him because there is a question about what is 00:02:31.368 --> 00:02:34.689 going to happen going forward. And Paul alludes to 00:02:34.699 --> 00:02:37.179 it in his prepared remarks, talking about how the 00:02:37.189 --> 00:02:39.330 economy has been much stronger than people anticipated. And 00:02:39.338 --> 00:02:43.909 the September inflation numbers have been disappointing and if the 00:02:43.919 --> 00:02:46.409 economy continues to grow at the rate, it is 00:02:46.419 --> 00:02:49.538 , it suggests that inflation will be sticky if not 00:02:49.550 --> 00:02:52.014 go up and the fed might have to do more 00:02:52.213 --> 00:02:53.413 . So that raises a question of what happens in 00:02:53.425 --> 00:02:57.254 2024. But I think if you hold his feet 00:02:57.264 --> 00:02:59.455 to the fire, Powell will say I can't make 00:02:59.463 --> 00:03:01.294 a prediction because I don't know whether the economy is 00:03:01.304 --> 00:03:05.485 going to continue along this path. Very strong third 00:03:05.493 --> 00:03:07.544 quarter numbers. But you still have a lot of 00:03:07.554 --> 00:03:10.585 economists including Bloomberg economics, suggesting recession in the fourth 00:03:10.594 --> 00:03:13.694 quarter or the first quarter of next year.