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Speaker 1: Bloomberg Audio Studios, podcasts, radio.

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Speaker 2: News, the Chairman of the Federal Reserve to rump out,

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Speaker 2: wrapping up the June FED decision. No change at the

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Speaker 2: Federal Reserve to interest rates, Plenty of changes in the forecast.

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Speaker 2: Inflation moving up a little bit, the dot plot moving

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Speaker 2: down a little bit. Equity market is just about holding

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Speaker 2: onto gains and still near all time highs on the

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Speaker 2: S and P five hundred on the NASDAK we're still

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Speaker 2: highed by one point eight percent, the rustle up by

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Speaker 2: two point two. We turn the page and switch at

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Speaker 2: the board and get to the bond market. This is

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Speaker 2: where things start to get. Interestings we're down by double

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Speaker 2: digits at the front end throughout most of the morning

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Speaker 2: and into the afternoon. We're now down by only nine

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Speaker 2: on a two year at four seventy four fifty five.

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Speaker 2: And if you take an inter day chart of the

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Speaker 2: two year yield, this shows the story of the morning

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Speaker 2: and the afternoon perfectly. I want to show you three moves.

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Speaker 2: The first move was eight thirty Eastern time this morning

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Speaker 2: when CPI came out cooler that expected what you see

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Speaker 2: on yields drop easy to see on the far right

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Speaker 2: side of the chart. Two moves I want to points

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Speaker 2: out once at two pm. Another is in the news

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Speaker 2: conference at two pm. We had some forecasts. The dot

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Speaker 2: plot came out and we all wanted to know where

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Speaker 2: the median dot would be in March. It signored or

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Speaker 2: at least implied three cuts for twenty twenty four. That

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Speaker 2: came down to one. You'll started to climb, and then

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Speaker 2: we all had a big question going into the news conference.

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Speaker 2: We'll hang on a minute. Did they factor in the

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Speaker 2: inflation report that came out this morning? And obviously, inevitably

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Speaker 2: Chairman Power was asked about it. This is what he

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Speaker 2: had to say.

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Speaker 3: What's in the SEP actually does reflect the data that

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Speaker 3: we got today to the extent you can, you know,

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Speaker 3: reflect it in one day. I think, well, you know,

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Speaker 3: you will see PPI tomorrow. Will know more about the

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Speaker 3: PCEE reading as the month goes on, but the initial

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Speaker 3: CPI reading and it's you know, kind of first level

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Speaker 3: translation to pce we did have this morning. We were

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Speaker 3: briefed about it and people were able to consider whether

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Speaker 3: they should make changes, and.

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Speaker 2: It didn't look like many people made any changes at least,

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Speaker 2: and for that reason, that's why you see that spike

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Speaker 2: car that little move high again on a two year

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Speaker 2: yield que The confusion around the forecasts, well, is this.

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Speaker 1: By design in some levels? Basically, there were a number

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Speaker 1: of Fed officials who got that CPI print and opted

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Speaker 1: not to change their inflation forecast. Do they do so

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Speaker 1: because they want more than three inflation reads to really

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Speaker 1: gain confidence in some sort of disinflationary trend? Is it

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Speaker 1: because all things being equal, it's better to send a

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Speaker 1: hawkish signal to markets that are eagerly looking for any

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Speaker 1: opening to buy into any idea of a rate cut.

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Speaker 1: All we know is that that was a slight disappointment

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Speaker 1: that's being reflected in slightly higher yields that have taken

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Speaker 1: back about five basis points from earlier this morning.

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Speaker 2: There's always going to be a big conversation about where

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Speaker 2: the medium dot is. But when these numbers came out,

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Speaker 2: you were the first to point this out. The split

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Speaker 2: amongst the policy makers now swear TK Just to go

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Speaker 2: through this again for those of you just joining us,

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Speaker 2: this is what we saw get away from the media

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Speaker 2: on the committee right now. The dot plot shows four

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Speaker 2: policy makers who saw no cuts this year, some anticipated

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Speaker 2: just one reduction, that was seven and expected tom two cuts.

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Speaker 2: The Federal Reserve is kind of all over the place.

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Speaker 4: Created and what's important here is the dispersion is not smooth.

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Speaker 4: So there's basically two camps. I thought Lukawa, of all people,

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Speaker 4: had a wonderful tweet out and that's really pointing out

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Speaker 4: the polarity that we see in the Fed as we

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Speaker 4: staggered through the summer.

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Speaker 2: I want to pick up on the labor market and

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Speaker 2: talk a little bit about that. So on Friday, payrolls

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Speaker 2: came in and it looked really hot on the headline

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Speaker 2: number two seventy two. But there's two surveys that go

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Speaker 2: into payrolls. There's the Establishment survey payrolls. There's the household

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Speaker 2: survey that's the unemployment rate. Unemployment came up to about

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Speaker 2: four percent. We all wanted to know what weight would

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Speaker 2: shairman Power put on the headline figure and how much

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Speaker 2: weight would he put on the household survey, and it

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Speaker 2: kind of said something like this, Sometimes it's difficult to

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Speaker 2: reconcile the differences. Payrolls might be a little bit overstated.

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Speaker 2: Makes more sense to look at things over the last

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Speaker 2: six months or so, Lisa. Overall, the picture is strong,

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Speaker 2: and we've got a gradually calling labor market.

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Speaker 1: People really honed it on the idea that the payroll

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Speaker 1: jobs growth maybe overstated. That line caught a lot of

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Speaker 1: people's attention at a time where he reflected the confusion

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Speaker 1: that we all felt, which is the reason why some

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Speaker 1: people said, we don't believe these numbers. Will wait for

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Speaker 1: the revisions. Nonetheless, this is why he's talking about a

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Speaker 1: series of data points, and maybe is part of the

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Speaker 1: reason why they aren't having much conviction, because this is

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Speaker 1: just sheer confusion that we're feeling from the feed.

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Speaker 2: Do you remember when Dan Swank used to talk about

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Speaker 2: aspirational forecasts of the FETA reserve. Let's have a look

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Speaker 2: at unemployment together. Four percent on Friday. This is where

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Speaker 2: they see it. Year end medium projection four percent, year

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Speaker 2: end twenty four four point two percent, year end twenty

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Speaker 2: five at LISA year end twenty twenty six, four point

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Speaker 2: one percent. Now, I understand the Fetter Reserve has a

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Speaker 2: great influence on things. They can shape the events they anticipate.

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Speaker 2: If they start to signal the unemployment's kind of five percent,

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Speaker 2: we've got a problem, and I think you see the

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Speaker 2: market freak out. But to signal, based on your own projections,

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Speaker 2: that we finish basically flat from where we are unemployment

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Speaker 2: by year end and climb to four point two by

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Speaker 2: twenty twenty five, is that aspirational or realistic?

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Speaker 1: You know, we said a lot of their projections were

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Speaker 1: aspirational a year or two years ago, and yet they

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Speaker 1: were correct. So I'm humble to sit here and say

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Speaker 1: that they're just purely aspirational. And we have not seen

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Speaker 1: the unemployment rate climb to such a significant degree, and

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Speaker 1: they've actually had to decrease their expectation for unemployment rates

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Speaker 1: just simply because the labor market was stronger than they expected. Now,

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Speaker 1: I would argue that the idea of upgrading their expectation

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Speaker 1: for inflation and keeping the same number of cuts, just

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Speaker 1: pushing them back to a later time raises some questions,

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Speaker 1: And this was ask the press conference. How did they

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Speaker 1: accept that, given that they don't see the labor market

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Speaker 1: breaking and that they want to get back down to

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Speaker 1: two percent, how do we cross how do we thread

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Speaker 1: that needle? And that's a good question that I didn't

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Speaker 1: really hear an answer to.

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Speaker 2: You want McKays run out of the news conference and

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Speaker 2: got in front of the camera for us, Mike, let's

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Speaker 2: catch out with you, Chairman Pow. Did he manage to

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Speaker 2: square the circle in that news conference?

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Speaker 5: Not really, John. I was thinking during this of the

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Speaker 5: line from the old movie Blazing Chaddles where the preacher says,

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Speaker 5: you're on your own boys, because there doesn't seem to

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Speaker 5: be any kind of direction here from the FED about

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Speaker 5: which way they're going to go and when they're still

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Speaker 5: base their base cases. I mentioned in my question to

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Speaker 5: the chairman is that they're going to cut rates this year,

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Speaker 5: but they don't see any difference at the end of

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Speaker 5: the year between the economy now and the economy then.

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Speaker 5: So how are investors supposed to anticipate what the FED

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Speaker 5: is going to do if the FED doesn't know and

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Speaker 5: can't give you any guideposts. The Chairman said, well, we

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Speaker 5: need a couple more reports that show things improving, but

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Speaker 5: what is improvement? Last month we saw the CPI changed

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Speaker 5: by about a tenth of a point and the PCE

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Speaker 5: changed by about a tenth of a point, and Chris

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Speaker 5: Waller said, well that's not good enough. I give those

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Speaker 5: reports a C plus. So it's really hard to tell

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Speaker 5: what's going to move them Obviously he's sort of signaling

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Speaker 5: not July, but from September on. It's an open question.

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Speaker 4: Mike. They want the convenience of a dramatic ex post decision.

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Speaker 4: Maybe that's not what the way the script goes this time.

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Speaker 4: What will you watch in the data that allows them

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Speaker 4: to get out front is they've never done before, well

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Speaker 4: maybe the nineties, but basically that they've never done before.

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Speaker 5: Well, basically you want to see what they want to

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Speaker 5: see an improvement in inflation data. But how much is

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Speaker 5: going to be the tricky part. We'll have to watch

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Speaker 5: both what the market reaction is and what the data show,

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Speaker 5: and then what they say in their speeches. At the

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Speaker 5: same time, we will also be looking at the unemployment

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Speaker 5: rate and job creation to make sure things don't go

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Speaker 5: south there. Either one might push them one direction or another.

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Speaker 5: I think that at this point they're going to be

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Speaker 5: as cautious as possible, but they do seem determined to

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Speaker 5: get at least one cut in.

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Speaker 1: Mikeel A lot of people were asking, including both Muhammada

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Speaker 1: and Bob Michael, whether the finficials really under stood the

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Speaker 1: CPI data and kept their projections. We got kind of

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Speaker 1: an answer but Sima Sha put it this way. You know,

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Speaker 1: if they did know that, maybe that implies that they

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Speaker 1: need more than three months of softer inflation prints before

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Speaker 1: they can be convinced to cut rates. Do we have

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Speaker 1: any clear message from the idea that yes, FED officials

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Speaker 1: had the information, and yes they had the chance to

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Speaker 1: change their forecasts, and no they did not.

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Speaker 6: Do it.

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Speaker 7: Well.

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Speaker 5: The chairman suggested that some people may have changed their forecast,

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Speaker 5: but the majority didn't. It's not going to be extending

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Speaker 5: the number of inflation data that they get. It's going

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Speaker 5: to be more of the same that we saw today.

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Speaker 5: Doesn't have to be maybe the same magnitude, but it

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Speaker 5: has to be a continued sequence of slowing inflation for

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Speaker 5: them to gain confidence. That's their magic word is confidence.

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Speaker 5: And they don't tell us what would give them confidence,

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Speaker 5: but it seems like several more, one or two more

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Speaker 5: maybe would give them the confidence that they could start

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Speaker 5: moving towards cutting rates.

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Speaker 4: Mike, you're expert at the data far more than i am.

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Speaker 4: If you look at domestic final sales, take out the

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Speaker 4: noise of trade, the world's agony, etc. If you look

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Speaker 4: at domestic final sales, what's the run rate? On the

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Speaker 4: economy that they're going to be dealing with to July

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Speaker 4: thirty one, September eighteenth, and near the election November seventh, well, we.

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Speaker 5: Were still in that area. Tom two point eight percent

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Speaker 5: in the first quarter, still well above trend growth for

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Speaker 5: that and the Atlanta Fed GDP now is running above

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Speaker 5: three percent. If you take that one and you take

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Speaker 5: the first quarter GDP at average them, you're at two

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Speaker 5: point two percent for the first half. So they're going

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Speaker 5: to be dealing with and they predict they're going to

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Speaker 5: be dealing with an economy that doesn't slow down at

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Speaker 5: this point and doesn't affect the labor market at this point.

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Speaker 5: And the interesting thing is they see core PCE inflation

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Speaker 5: going up, but they're still talking about raising rates or

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Speaker 5: cutting rates rather. So it's it's a situation that kind

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Speaker 5: of leaves everybody at sea here as to what it

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Speaker 5: is they're actually going to do. If they want to advertised,

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Speaker 5: listen to our speeches. This is a good advertisement for that.

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Speaker 2: Yeah, Mike, I'm not sure if that one bites. Let's say,

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Speaker 2: if that works. Mike McKay, thank you, sir, great work

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Speaker 2: As always in the news conference. Once again, this is

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Speaker 2: the calendar for the next month or so. So July fifth,

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Speaker 2: you get another jobs report. Let's see if it looked

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Speaker 2: like the one we got on Friday, July eleventh. You've

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Speaker 2: get a CPI report back end of July, very last

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Speaker 2: day of the month, July thirty one, another Federal Reserve decision.

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Speaker 2: No questions really about July, Lisa, but I guess it

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Speaker 2: was implied based on the forecast we got a little

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Speaker 2: bit earlier.

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Speaker 1: Basically, it seems like July is squarely off the table.

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Speaker 1: It was not even an consideration September though. J. Pewell

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Speaker 1: didn't even entertain that idea. He kind of hemmed, in hard,

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Speaker 1: I don't want to talk about timeframes. I don't we

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Speaker 1: don't want to be like, you know, squirred in give it.

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Speaker 2: I would have a suppression of it.

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Speaker 1: Well, I meaning again, honestly, that was exactly what he

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Speaker 1: needed to do, right, Wasn't that kind of the goal

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Speaker 1: that Bob Michael set out for him was to do nothing?

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Speaker 1: I mean, if anything, he had the most hawkish message

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Speaker 1: relative to market expectations.

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Speaker 7: In a long time.

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Speaker 1: So it was somewhat of a different Ja Powell than

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Speaker 1: we've gotten in the past. But you know, he wouldn't

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Speaker 1: really solidify anything, and that I think was by design

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Speaker 1: given their confusion.

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Speaker 2: I think emphasis really matters in news conferences. Of course

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Speaker 2: it matters. It's pretty straightforward. It's where he didn't put

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Speaker 2: the emphasis. He didn't really put much emphasis on the

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Speaker 2: forecast for economic growth, on employment or inflation. Where he

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Speaker 2: actually put emphasis was on the destination for the FED dots.

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Speaker 2: And I thought it was pretty interesting. So we were

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Speaker 2: all sort of geared up to focus on twenty twenty four.

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Speaker 2: Would the dot plot, the median dot come down from

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Speaker 2: three to two, maybe to one? It comes down to one,

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Speaker 2: but then you're looking out to twenty twenty five and

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Speaker 2: they give you one back, so they take two away

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Speaker 2: and then throw an extra one in in twenty twenty five.

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Speaker 2: So really, today, when you look at the dot plot

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Speaker 2: the OTTOMN destination, what's changed for the FMC incens to

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Speaker 2: topoth the rights from Haya.

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Speaker 1: Basically that just the disinflationary trend is happening more slowly

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Speaker 1: than they previously thought, but that at some point they

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Speaker 1: will have this same trajectory, just on a delayed timeframe.

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Speaker 1: And that was essentially what Ja Powell laid out today

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Speaker 1: and maybe on the margins that's a bit more hawkish

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Speaker 1: than the two year was pricing them before.

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Speaker 4: I'm going to go to modest further progress. Modest is

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Speaker 4: on the yactis. I have no idea what it means.

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Speaker 4: Further in progress, John, is exactly what you were talking about,

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Speaker 4: which is what they're doing here, is they're extending out

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Speaker 4: the optionality of their timeline. Their ex exis. Because your point, Lisa,

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Speaker 4: this disinflation. It is slower. David Rosenberg not the next Rosenberg.

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Speaker 4: David Rosenberg says eureka. But what they did today was

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Speaker 4: extend out the X axis with further progress. That's not

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Speaker 4: in any textbooks. That's marketing bologney.

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Speaker 2: As far as i'm we can get to Jeff Rosenberg

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Speaker 2: right now as Blackrock, Jeff want to put a catch

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Speaker 2: up with you, sir. Let's get into it. How did

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Speaker 2: you make these forecasts? And can you square the circle

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Speaker 2: for us?

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Speaker 6: You know, I agree with Lisa, it's a little bit

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Speaker 6: hard to square the circle here from the press conference.

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Speaker 6: I mean, obviously, the morning's data set the tone for

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Speaker 6: a very douvish press conference, and the one hike Median

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Speaker 6: kind of took the wind out of the sails and

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Speaker 6: so the so Powell was kind of faced with that

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Speaker 6: as the as the backdrop, and so it was maybe

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Speaker 6: a little bit less of the dubbish Powell than we've

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Speaker 6: seen in the past. But I think he did give

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Speaker 6: us a couple of insights. One, he did talk about

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Speaker 6: the overstatement argument on payrolls, you know, a little bit

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Speaker 6: to last week's data.

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Speaker 7: Two, you know, he talked about two point six two point.

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Speaker 6: Seven as being I can't remember exactly the quote a

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Speaker 6: fine place to be. And I think that does reveal

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Speaker 6: that this is a FED that doesn't have to get

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Speaker 6: to two percent anytime soon, and that's part of this

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Speaker 6: asymmetric response function. If inflation is a little bit too hot,

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Speaker 6: then we'll just hold pat and if there's weak in

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Speaker 6: the labor markets or any kind of unexpected weakening, then

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Speaker 6: we're going to cut, and we'll cut more aggressively. And

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Speaker 6: so I think they're comfortable with this path of inflation.

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Speaker 6: And then I think on the third point, there's just

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Speaker 6: a bit of confusion about how stale are the SEP

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Speaker 6: forecast relative to the new information from the morning. I

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Speaker 6: think what is clear here is that having.

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Speaker 7: Been a little bit burned by.

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Speaker 6: The enthusiasm at the end of last year and then

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Speaker 6: the reversal on inflation. They're not going to want to

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Speaker 6: reverse so quickly with just one good print, and he

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Speaker 6: stated again and again they'll need more than just one.

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Speaker 6: And I think that's why you had maybe the hesitancy.

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Speaker 6: But understand that the difference between two cut and one cut.

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Speaker 7: Median is one member. This is a very fine.

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Speaker 6: Point to be seeing, you know, pretty big shifts in

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Speaker 6: market pricing. I think the broader theme here is this

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Speaker 6: is still a FED that is looking to cut rates,

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Speaker 6: very supportive to financial markets. Obviously the data this morning

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Speaker 6: is portive to that, a little bit dismissive about the

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Speaker 6: strength of the labor market. So I think this is

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Speaker 6: a pretty good set up here for bonds and stocks.

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Speaker 1: Does this mean in your view that September is still

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Speaker 1: very much on the table, even if Fetcher Powell really

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Speaker 1: demurred when it came to a timeframe.

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Speaker 7: I do think it is.

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Speaker 6: And I think obviously you know, this is the volatility

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Speaker 6: that is what happens when the data lights the way,

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Speaker 6: when you're when you're completely abandoning forecast based policy for

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Speaker 6: data dependents. But if we do get in the interim

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Speaker 6: period between now and September.

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Speaker 7: Reports that are along the lines.

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Speaker 6: We don't have to get as big of a downside

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Speaker 6: surprise as inflation as we've seen, but that continued gradual

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Speaker 6: rebalancing in the labor market stabilization to slowing on the

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Speaker 6: inflation side, then I think absolutely September is in play

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Speaker 6: as well as December and the two cuts that are

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Speaker 6: you know, not in the median, but I think are

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Speaker 6: still very much in play here.

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Speaker 7: Jeff.

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Speaker 4: When he stepped off the stage, we were up two

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Speaker 4: point any standard deviations on both SPX and Nasdaq one hundred.

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Speaker 4: We've pulled back a little bit from their selling into

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Speaker 4: the excitement tomorrow morning. I guess, Jeff Rozenberg, simple, how

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Speaker 4: do you invest in this? Do you just clip a coupon?

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Speaker 4: Do you increase your cash level in this uncertainty? Is

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Speaker 4: there an opportunity?

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Speaker 7: Well?

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Speaker 6: I think, as I mentioned, the opportunity here is that

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Speaker 6: this is a FED that is very asymmetric, and they're

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Speaker 6: asymmetric with regards to holding policy flat in the face

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Speaker 6: of disappointing data in terms of strength or policy progress

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Speaker 6: on inflation, and then very supportive on unexpected weakening in

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Speaker 6: the labor market. I think that's very supportive to financial

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Speaker 6: market conditions. I think there's a longer run you know,

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Speaker 6: problem with that potentially, but in the short run, this

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Speaker 6: is a little bit more favorable to risk markets and

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Speaker 6: to risk taking. You can step out of cash into

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Speaker 6: that front end of the curve. This is a fed

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Speaker 6: that's telling you that they're going to cut rates. So

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Speaker 6: cash has been very supportive because they've held rates up.

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Speaker 6: But the path going forward, and Jonathan mentioned it, you know,

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Speaker 6: this is just shifting the cuts into twenty twenty five,

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Speaker 6: So you're going to lose the income by hanging out

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Speaker 6: in cash. The belly of the curve for fixed income investors,

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Speaker 6: the front belly of the curve two to five year apart.

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Speaker 7: I think that's a very attractive part of the curve.

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Speaker 6: I do think you have to start moving out into

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Speaker 6: that part of the curve to lock in those rates.

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Speaker 6: And the economy to the comments on Mike McKee GDP,

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Speaker 6: now the forecasting you know above trend growth relative to

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Speaker 6: the fears of recession, this is a very supportive in

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Speaker 6: market market environment for credit. That's a carry argument. I

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Speaker 6: think you can clip coupon there, take some risk there

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Speaker 6: because the default risk is still very much low because

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Speaker 6: the growth side of the economy.

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Speaker 7: Is very strong.

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Speaker 2: Jeff, stay close. I get you back in in just

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Speaker 2: a moment. I want to talk about twenty five by

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Speaker 2: talking about twenty four. There's four meetings left this year

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Speaker 2: July thirty one, September eighteen, November seventh, December eighteenth. I

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Speaker 2: want to go to the November mating. November fifth is

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Speaker 2: an election. The day after they kick off a FED mating.

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Speaker 2: Michael McKay, we're all talking about folksts for twenty twenty five.

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Speaker 2: None of us are got a clau halfway about what

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Speaker 2: twenty twenty five is going to look like.

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Speaker 5: Well, you take a look at the dot plot for

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Speaker 5: twenty twenty five, and compared to twenty twenty four, it's

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Speaker 5: very very spread out. There is no consensus at all.

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Speaker 5: We pick a median for convenience and talk about it

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Speaker 5: and we say, Okay, they're putting us up to four

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Speaker 5: rate cuts next year. But really, what the dot plot

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Speaker 5: is telling you is they have no idea. And one

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Speaker 5: of the reasons is we could have a completely different

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Speaker 5: fiscal policy next year, and we have a lot of

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Speaker 5: issues including debt ceiling, the government funding and the tax

387
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Speaker 5: cuts that are going to expire that could change the

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Speaker 5: economic picture tremendously. So I'm not going to tell Jeff

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Speaker 5: Rosenberg how to trade that, but I don't think you

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Speaker 5: can have a whole lot of confidence that what their

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Speaker 5: predict today is going to be anything like what we'll

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Speaker 5: be seeing at the November meeting.

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Speaker 2: Am im kay, thank you sir. Of course, the forecasts

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Speaker 2: are always more instructive to really gage the reaction function.

395
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Speaker 2: That's what's important here, how they respond to incoming information.

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Speaker 2: But let's just run with this, the forecast for twenty

397
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Speaker 2: twenty five, Brami, what are they worth given how much

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Speaker 2: could change in November onwards.

399
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Speaker 1: Well, this is the reason why Bob Michael said I'm

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Speaker 1: in charge here. I'm a bond Micael investor, and I'm

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Speaker 1: the person who sets the rates right now, not the

402
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Speaker 1: Federal Reserve at a time where they are just as

403
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Speaker 1: confused as ever before. I am curious, Jeff, what is

404
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Speaker 1: your take on that that right now we see big

405
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Speaker 1: bond investors saying we're setting rates, the Fed is a

406
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Speaker 1: bunch of confused people who are looking at the same

407
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Speaker 1: data and equally confuses everybody else. We can look at

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Speaker 1: supply and demand. We can react to all of the

409
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Speaker 1: economic data. Sure, yields jump up and down, but we're

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Speaker 1: the ones that are kind of the main guy in

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Speaker 1: the room.

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Speaker 6: You know, I'm going to agree with Bob Michael very

413
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Speaker 6: much so, especially when we're talking about the back end

414
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Speaker 6: maturities and the term premium. You know, this is a

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Speaker 6: FED that's gonna get less into the business of setting

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Speaker 6: term premium and influencing the maturity of rates and the

417
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Speaker 6: difference between demand and supply. Particularly as Mike McKee was

418
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Speaker 6: just mentioning, we're gonna have a big issue around fiscal

419
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Speaker 6: deficits in their financing, and much more of that is

420
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Speaker 6: gonna be borne by us, the bond market, investors, the

421
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Speaker 6: private sector, so a lot more of that term premium

422
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Speaker 6: and then resetting that term premium is gonna be dictated

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Speaker 6: by financial markets. It's partly why I think the front

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Speaker 6: end of the curve is a bit more attractive because

425
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Speaker 6: the term premium, you're going into that uncertainty with relatively

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Speaker 6: low yes we're off the historical lows, but relatively low

427
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Speaker 6: compensation for both term and inflation premium. I think that

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Speaker 6: makes the back end a lot more challenging, and because

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Speaker 6: we view it as more challenging, there's less demand, you're

430
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Speaker 6: gonna have more supply. I think that could be a

431
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Speaker 6: factor towards a little bit longer run process of steepening

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Speaker 6: out both term and inflation premium.

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Speaker 4: You back, Jeff, what's important here, and you said that

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Speaker 4: there's a risk on field of this, and certainly we've

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Speaker 4: seen it in technology and SPX before he ended his

436
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Speaker 4: press conference up well over two point eight standard deviations?

437
00:21:15,119 --> 00:21:19,120
Speaker 4: Is the answer here, Jeff, that everything is just playing solid.

438
00:21:19,600 --> 00:21:22,680
Speaker 4: There isn't the polarity of a boom economy or doom

439
00:21:22,680 --> 00:21:26,040
Speaker 4: and gloom. It's just a solid American economy.

440
00:21:28,080 --> 00:21:29,280
Speaker 7: It's pretty solid, Tom.

441
00:21:29,320 --> 00:21:32,440
Speaker 6: I mean when you look at that domestic demand component

442
00:21:32,520 --> 00:21:35,200
Speaker 6: and it's so solid that you know, last Friday when

443
00:21:35,200 --> 00:21:37,480
Speaker 6: I was on we talked about the question that was

444
00:21:37,520 --> 00:21:38,399
Speaker 6: asked a bit today.

445
00:21:38,760 --> 00:21:40,560
Speaker 7: You know, how restrictive is policy?

446
00:21:41,119 --> 00:21:44,399
Speaker 6: Really you're not really seeing it in the economic slowdown

447
00:21:45,000 --> 00:21:47,400
Speaker 6: that you'd otherwise expect outside.

448
00:21:46,920 --> 00:21:48,439
Speaker 7: Of the interest rates sensitive sector.

449
00:21:48,560 --> 00:21:51,840
Speaker 6: So for risky assets and for credit, as I just mentioned,

450
00:21:52,040 --> 00:21:54,920
Speaker 6: I think that's a good thing. So I do think

451
00:21:55,080 --> 00:21:58,560
Speaker 6: that the strength of the economy here helps to underwrite

452
00:21:58,560 --> 00:22:02,840
Speaker 6: some risk taking in a broad sense, and there's a

453
00:22:02,960 --> 00:22:05,679
Speaker 6: bit of a worry there that that might be leading

454
00:22:05,720 --> 00:22:07,920
Speaker 6: to maybe less progress on inflation.

455
00:22:08,080 --> 00:22:09,840
Speaker 7: But I think what we heard from the chairman.

456
00:22:09,560 --> 00:22:12,760
Speaker 6: Today, they don't need Yes, they're going to say we

457
00:22:13,440 --> 00:22:16,360
Speaker 6: want to maintain policy and get back to two percent.

458
00:22:16,640 --> 00:22:20,159
Speaker 6: But it could be a long period of willingness to

459
00:22:20,280 --> 00:22:23,760
Speaker 6: accept two and a half to three percent as good enough.

460
00:22:23,840 --> 00:22:24,520
Speaker 7: Take the win.

461
00:22:24,840 --> 00:22:29,080
Speaker 6: We've come from seven down to below three. That's a

462
00:22:29,080 --> 00:22:32,760
Speaker 6: good outcome, and not risk the economic growth side by overtightening.

463
00:22:33,040 --> 00:22:35,080
Speaker 2: Jeff love doing this with you. Thank you, sir Jeff

464
00:22:35,119 --> 00:22:37,960
Speaker 2: Rosenberg there of black Rock wrapping up FED decision day

465
00:22:38,080 --> 00:22:40,560
Speaker 2: and CPR Lornich as well. Let's get some fun of

466
00:22:40,560 --> 00:22:42,080
Speaker 2: words around a type or take ky first to you

467
00:22:42,240 --> 00:22:42,879
Speaker 2: fun of thoughts.

468
00:22:43,119 --> 00:22:45,000
Speaker 4: It's going to be eventful through the rest of the year.

469
00:22:45,200 --> 00:22:48,760
Speaker 4: I thought it was off of CPI this morning, just spectacular.

470
00:22:48,920 --> 00:22:51,600
Speaker 4: Yes they're data dependent, but you know what, it's going

471
00:22:51,640 --> 00:22:54,240
Speaker 4: to be eventful right up to Jackson holand beyond.

472
00:22:54,560 --> 00:22:56,600
Speaker 1: Anyone who is looking for some sort of certainty in

473
00:22:56,600 --> 00:22:59,520
Speaker 1: the bond market, some sort of stability, good luck, because

474
00:22:59,560 --> 00:23:01,920
Speaker 1: right now you have a green light to go crazy

475
00:23:02,040 --> 00:23:04,520
Speaker 1: to see Bonker's types of moves. To quote one of

476
00:23:04,560 --> 00:23:08,119
Speaker 1: our guests earlier this week, because right now there is

477
00:23:08,240 --> 00:23:11,320
Speaker 1: no central planning when it comes to where reads are going,

478
00:23:11,440 --> 00:23:13,440
Speaker 1: and that to me is significant at a time where

479
00:23:13,440 --> 00:23:16,560
Speaker 1: at one point that was considered a financial stability risk.

480
00:23:16,720 --> 00:23:18,240
Speaker 1: Right now it doesn't seem to be. I don't know

481
00:23:18,240 --> 00:23:20,560
Speaker 1: if that's a sign of strength of fragility, but right now,

482
00:23:20,880 --> 00:23:23,639
Speaker 1: that is the takeaway. These double digit moves, it yield

483
00:23:23,720 --> 00:23:26,000
Speaker 1: on a daily basis, they seem to be here to

484
00:23:26,000 --> 00:23:26,520
Speaker 1: stay well.

485
00:23:26,560 --> 00:23:28,760
Speaker 2: Right now we're giving some of that up. Just recap

486
00:23:28,840 --> 00:23:30,760
Speaker 2: some of the price section session highs on the S

487
00:23:30,800 --> 00:23:33,359
Speaker 2: and P five hundred. About twenty minutes ago we were

488
00:23:33,400 --> 00:23:36,000
Speaker 2: hired by more than one point three percent, now positive

489
00:23:36,000 --> 00:23:38,440
Speaker 2: by about seven tens to one percent on the SMP.

490
00:23:38,680 --> 00:23:40,800
Speaker 2: In the bond market at the low's on a two

491
00:23:40,880 --> 00:23:42,960
Speaker 2: year year old, we've been down sixteen basis points. We're

492
00:23:42,960 --> 00:23:45,240
Speaker 2: now down about seven or eight. So some of this

493
00:23:45,680 --> 00:23:47,880
Speaker 2: unwidening just a little bit. The team's going to take

494
00:23:47,920 --> 00:23:49,800
Speaker 2: over from here. They'll run you through the close. They'll

495
00:23:49,840 --> 00:23:52,680
Speaker 2: catch up with former Fed Governor Betsie Duke and Jim Chenos.

496
00:23:52,760 --> 00:23:55,560
Speaker 2: Look out for those conversations from New York City. That's

497
00:23:55,600 --> 00:23:57,800
Speaker 2: it for us. We'll see the end of July all away.

498
00:23:57,880 --> 00:24:01,400
Speaker 2: Until then, from New York was the Feticides