1
00:00:00,280 --> 00:00:03,560
Speaker 1: Now, this morning, the FED delivered what markets had been

2
00:00:03,600 --> 00:00:06,000
Speaker 1: expecting for weeks. It was a twenty five basis point

3
00:00:06,320 --> 00:00:09,000
Speaker 1: rate cut. But the thing is that the US medium

4
00:00:09,039 --> 00:00:11,320
Speaker 1: term interest rates actually higher following the cuts. So let's

5
00:00:11,320 --> 00:00:12,760
Speaker 1: have a look at what's going on here. Sam Dickey

6
00:00:12,760 --> 00:00:13,880
Speaker 1: from Fisher Funds is with us.

7
00:00:13,920 --> 00:00:15,520
Speaker 2: Ay, Sam, good evening here.

8
00:00:15,640 --> 00:00:18,079
Speaker 1: Why did the interest rates rise and how did the

9
00:00:18,120 --> 00:00:19,440
Speaker 1: other asset classes react.

10
00:00:20,880 --> 00:00:22,600
Speaker 2: It does seem like a bit of a paradox. You

11
00:00:22,640 --> 00:00:25,160
Speaker 2: cut your benchmark rate and market interest rates go up.

12
00:00:25,640 --> 00:00:29,240
Speaker 2: But like you said, this had been fully expected by

13
00:00:29,280 --> 00:00:32,199
Speaker 2: the market ever since the US job market started to

14
00:00:32,200 --> 00:00:35,360
Speaker 2: soften in earlier was so. In fact, at this time yesterday,

15
00:00:35,400 --> 00:00:38,520
Speaker 2: the market was pricing a one hundred and five percent

16
00:00:38,640 --> 00:00:40,960
Speaker 2: chance of a rate cut today, which is a silly number.

17
00:00:41,000 --> 00:00:42,839
Speaker 2: What that really means is the market was pricing a

18
00:00:42,960 --> 00:00:45,120
Speaker 2: small chance of two rate cuts today. So the market

19
00:00:45,120 --> 00:00:48,160
Speaker 2: was a little disappointed. The old buy the rumor, sell

20
00:00:48,240 --> 00:00:51,560
Speaker 2: the fact. But on top of that, Paldin commit to

21
00:00:51,720 --> 00:00:55,560
Speaker 2: aggressive easing. He said he would do a kind of

22
00:00:55,560 --> 00:00:58,120
Speaker 2: meeting by meeting approach, and in fact, the FED raised

23
00:00:58,160 --> 00:01:01,000
Speaker 2: their full year growth for cast from one point six

24
00:01:01,080 --> 00:01:04,480
Speaker 2: to one point eight percent, So many in the market

25
00:01:04,480 --> 00:01:07,119
Speaker 2: were hoping, you just commit to a fairly aggressive easing

26
00:01:07,160 --> 00:01:10,240
Speaker 2: policy on the back of extremely weak jobs numbers, but

27
00:01:10,319 --> 00:01:13,000
Speaker 2: he didn't do that. Other asset classes were pretty muted.

28
00:01:13,080 --> 00:01:16,560
Speaker 2: US equities march higher, of course, upper touch. But the

29
00:01:16,600 --> 00:01:20,160
Speaker 2: big move was the dollar. So because interest rates are higher,

30
00:01:20,680 --> 00:01:23,320
Speaker 2: that means investing the US dollar and putting money in

31
00:01:23,319 --> 00:01:25,440
Speaker 2: the bank there is relatively more attractive. So the US

32
00:01:25,440 --> 00:01:27,840
Speaker 2: dollar went up, and things like the KI dollar and

33
00:01:27,920 --> 00:01:29,920
Speaker 2: Aussie dollar fell very sharply on the back of it.

34
00:01:30,400 --> 00:01:32,320
Speaker 1: Now, what do you think is the real story behind

35
00:01:32,319 --> 00:01:33,960
Speaker 1: the Fed's nine month paused before this?

36
00:01:35,720 --> 00:01:38,360
Speaker 2: Yes, a lot of intrigue around this. So you have

37
00:01:38,400 --> 00:01:40,240
Speaker 2: to take your hat off to Powell and co. For

38
00:01:40,440 --> 00:01:44,279
Speaker 2: standing fast for nine months in the face of President Trump.

39
00:01:44,280 --> 00:01:46,880
Speaker 2: So President Trump has called him in recent months he

40
00:01:47,040 --> 00:01:50,840
Speaker 2: complete failure and a real dummy because he should have

41
00:01:50,880 --> 00:01:53,559
Speaker 2: cut rates some time ago according to the administration. Of course,

42
00:01:53,600 --> 00:01:56,000
Speaker 2: presidents want to pressure the FED to his rates rapidly

43
00:01:56,040 --> 00:01:58,880
Speaker 2: because it stokes the economy and makes the administration look

44
00:01:58,960 --> 00:02:01,680
Speaker 2: good ahead of mid term action next year. But the Feed,

45
00:02:01,720 --> 00:02:04,800
Speaker 2: on the other hand, has been concerned about the inflationary

46
00:02:04,880 --> 00:02:08,920
Speaker 2: impact of tariffs, especially now tariffs have saddled, settled, and

47
00:02:08,919 --> 00:02:10,320
Speaker 2: the rubber's going to meet the road there.

48
00:02:11,240 --> 00:02:13,840
Speaker 1: What do you think this all means for investor, Sam?

49
00:02:14,840 --> 00:02:17,600
Speaker 2: I don't think Power is playing politics. I think he

50
00:02:17,720 --> 00:02:19,840
Speaker 2: is doing what he's supposed to do, which is as

51
00:02:19,960 --> 00:02:22,119
Speaker 2: maintainers independence, which I take my hat off to him.

52
00:02:22,720 --> 00:02:25,440
Speaker 2: Remember inflation that the rubber does meet the road on

53
00:02:25,480 --> 00:02:29,200
Speaker 2: inflation from here. So Home Depot, who we spoke to recently,

54
00:02:29,240 --> 00:02:33,040
Speaker 2: who have held pricing firm despite the fact they import

55
00:02:33,080 --> 00:02:35,800
Speaker 2: a lot of goods from around the world the subject

56
00:02:35,800 --> 00:02:39,280
Speaker 2: to tariffs. They had a lot of low price inventory

57
00:02:39,280 --> 00:02:42,520
Speaker 2: that they imported before the tariffs hit, but they basically

58
00:02:42,600 --> 00:02:44,560
Speaker 2: run out of that low priced inventory and they are

59
00:02:44,600 --> 00:02:48,040
Speaker 2: strongly signaling that they will lift prices from here. So

60
00:02:48,680 --> 00:02:51,119
Speaker 2: if we do start to see a rise in inflation,

61
00:02:51,520 --> 00:02:54,200
Speaker 2: that might sort of tie the Fed's hands a wee bit.

62
00:02:54,639 --> 00:02:56,760
Speaker 2: But if not, there's plenty more room to ease.

63
00:02:57,320 --> 00:02:59,240
Speaker 1: Okay, Sam, Look, it's good to talk to you, as always,

64
00:02:59,240 --> 00:03:02,200
Speaker 1: to talk to you again. Have your soon. Sam Dickey Official.

65
00:03:01,880 --> 00:03:05,880
Speaker 2: Funds for more from Hither Duplessy Allen Drive listen live

66
00:03:05,960 --> 00:03:08,840
Speaker 2: to news talks. It'd be from four pm weekdays, or

67
00:03:08,880 --> 00:03:10,960
Speaker 2: follow the podcast on iHeartRadio