So hello, hello, hello, get ready for some craziness in the market, because the fed's decision for the fomc, the federal open market committee is gon na be live in a couple minutes. We're looking at seven minutes, seven minutes. Folks and boy. Oh boys are gon na, be some crazy, crazy, crazy, crazy, crazy volatility.

Let's get right into it, let's see what in the world we need to be talking about. So overall, we've seen a massive bounce in the markets around 11 30. It pulled a hardcore u-turn and even though, if you guys were watching the morning stream, you know i got margin call down here. If i held, we would have hit that profit, which does it piss me off more than you could ever ever.

Possibly imagine so. At the spy, the tech sector, we have volatility and we also have bitcoin up on the screen. So there's going to be massive swings starting at two and then they will continue at 2. 30 when jerome powell starts speaking, live 2 p.m.

We get the results. Jerome powell, the chairman of the fed, starts speaking at 2 30.. Now most people are looking for a 0.5 interest rate increase. So that's a number to keep in mind, but the big thing is and we're going to get more of this really from when jerome powell starts talking.

According to the minutes, the feds started getting rid of those bonds to the tune of 95 billion a month. So we're listening to what's referred to as the balance sheet normalization the balance sheet, runoff, whatever you want to call it, that's really what we need to be listening to, because if they want to do it more aggressively more rapidly at a higher rate, that's more hawkish, Not good for markets, not good for equity, it's not good for crypto! On the flip side, if they do it a less aggressive, that's a bit more dovish! Well, that's going to end up being more bullish for the overall market, so we're listening for the interest rate increase. What's that number most people are saying 0.5, that's really what's being priced in right now, but more than that, it's all about balance sheet normalization. It's all about balance sheet runoff, so let's get ready because we now have about five minutes, and what i want to remind you of is hey.

We have a little bit of a game going on right now, so it is pinned to the top of chat. If you just go to mattcoors.locals.com, come to this one, the first one i pinned it new competition post, your prediction for the high value of the s p: 500. Today, right now, what are we sitting at a high of 4? 18 47. You can post up until really we're going to say: 2 30 is the cutoff time you have a half hour.

2 30 pm today may 4th any votes. Past 2 30. Do not count what you need to do head over here. It's pinned to the top of chat.

It's in the description uh, if you don't have an account. Yet the code is fomc um, there's about 20, more free codes left over right now, fomc, all you have to do is make sure that you're on monthly, not annual, go over to the website. Click try to sign up you! Don't it's going to be free, like that's the coupon code for 100, free fomc, put your guess here and whoever's closest you're gon na get a year free. So it's just a free competition and i don't know i always find a little bit more enjoying this.

Just because of how absolutely wild things can get uh, let's get rockin, i'm excited, i'm excited is the is this actually pin, though i thought i pinned it, let me reload it just to make sure that it is pinned all right. I think we're. I think we're rocking, i think we are rocking for some reason: it's not pinned all right, i'll, pin it now i'll, pin it now all right there. It is message pinned i'm told that it's pinned and it's about to go wild um.

So we could do a little bit. Oh, i need a poll from you. Okay tell me so i saw some people were talking about trade situations, saying that they weren't allowed in training uh. That is 100 wrong.

I don't know where people are getting that uh, but it is more along the lines of they are making. You have full margin, they didn't stop trading like whatsoever. They just said you have to have full margin, which i think is pretty fair in a high volatility scenario. That's what good brokers do they properly check for their margin? So we don't have like another robin hood, circa january 2021 scenario.

I saw some of these things. Making their rounds on, i think twitter was the main space of like hey uh. We think that they stopped trading, they didn't stop trading, that's just literally, not how it worked. They just made.

They made it so you have full margin, which means at this point in time. I can only trade one, but i'm gon na do whatever you guys. Tell me to do. Are we going red? Are we going green and we're gon na try to make 500 buckaroos 500 buckaroos? Ah, let's get going? What time do we have? Okay, we have exactly two minutes left, which means all right.

Are you guys voting make sure everyone votes? We need the most votes possible. Most votes possible matt. Can we get a twitch video as well uh, it's running on rumble and youtube right now we only do twitch in the morning and i'm really not liking. What's going on with twitch lately and what i mean by that is, like i heard recently that they're gon na start giving less to their creators uh.

It doesn't really impact me because i'm not that big on twitch, i'm really not big at all on twitch uh, but amazon's, making really weird decisions with it really weird decisions with it all right, all right, all right all right. What time is it almost 158? We're getting close team, we are getting close. Okay, we have. Oh, you guys, pinned it halfway and pull which one won, which one won and pull and pull 415 people slightly edged out by red slightly, which means we're gon na you heard it all right.

We sold we're putting in the profit target right away for 500.. We are good to go good to go good to go good to go. This is gon na get crazy all right, so i have the trade-in. The results are going to be here.

Momentarily financial conditions. Might not be tight enough to control inflation. I agree with what david's saying i think that plenty of things are going to slow down, but will it happen fast enough for the fed's liking financial conditions, not tight enough jim? Oh god? Oh god, on where i see credit spreads right now, credit cards have been hanging. The trade you guys told me to go short, we're pretty much break even right.

Now, looking for four thousand one hundred, seventy seven, basically to fed one until 500 dollars to come down. So that's in the next couple of years, so i would argue right now all right. Yes, what are the results? What are the results? Rates have gone up, but we're not really seeing enough of a slowdown, at least by my calculations, to get to two percent. Inflation is it going bullish.

Remember there is the old adage that is expected of 75 points. All expected percentage point. The federal reserve, increasing uh, says ongoing increases will be appropriate uh. The fed will begin to reduce the balance sheet on june 1..

It will ramp up the balance sheet reduction over time. It's going to begin with 47.5 billion dollars in balance sheet reduction through august and then, after that, three reduced. It's going to reduce the balance either allow the runoff of yo cnbc. What are you doing to us? Cnbc, why are you up right now? That's not good! Not a good look! Cnbc! The russian invasion of you start to slow down the balance sheet reduction over time.

It's going to begin with 47.5 billion dollars in balance sheet reduction through august and then, after that three-month period it's going to reduce it's going to reduce the balance either allow the runoff of 95 billion dollars a month as expected and that'll happen, beginning in september. That'll be a total of 60 billion in treasuries running off the balance sheet. Every month, 35 billion dollars in mortgages, the federal reserve says household and business spending remains strong job gain. Dude they're really messing it up robust the russian invasion of ukraine likely puts upward pressure on inflation and weighs on economic activity a very quick analysis, guys there's one sentence in here.

That was a little more dovish than i expected, and a lot of other observers thought there'd, be a line in here about the fed moving expeditiously towards neutral. It doesn't say that it just says anticipates: ongoing increases will be appropriate, doesn't say how much we're going to have to leave that for fed chair jay powell uh and whether he'll put some character on the pace from the federal reserve. But as expected, 50 basis points and balance sheet, runoff ramping up to 95 billion dollars a month, kelly st uh steve. Let's highlight two key things here as we're watching a knee jerk dovish reaction to the statement.

We see yields dropping about five basis points on the 10-year to 295 and equities moving higher somewhat. The dow is up 250, it seems, like you said they didn't use the word expeditious. Also, why are they doing half the expected pace of quantitative tightening for the first? Three months: that's pretty dovish, oh, so no! We we expected that we, we actually have began to to survey that kelly back several months ago. The federal reserve would ramp up to the 95 billion they've done that before um.

That was, i think, fairly well expected. I apologize for not mentioning it in the lead up to this, but uh. If they want the market to adjust to this, then they'll get to 95 billion. So you think this is.

What do you think then steve are the dovish surprises from the statement? No dissenters. Just the one comment here, i saw a bunch of people and because powell went forward and said we're going to move expeditiously back to neutral people thought that was going to be the new sort of buzz phrase that told us 50s were in and around are possibly Coming from the biggest hike in two decades in the actual language here, we'll see, if powell uses it again expeditiously to neutral uh to put um uh numbers around that kelly, the way people understood that off before two and a quarter, two and a half they didn't Say that i'm not going to go overboard here and say first move typically the wrong one. Folks, remember that remember, i'm curious! Are they talking about this week or are you talking about this one? One of these wicks are going to be horrifically wrong for the trees. I think the story here is whether or not the fed if it pushes 4 17.

75. Again, i think we're coming down 50s uh in route there, whether or not there's up some play up and some play down here. Stick around stephen we're going to bring back our panel plus bob pazani and rick santelli uh also joining us uh rick santelli. Let's turn to you uh: what do you think considering now it's a lot of price volatility and yields moving, but just consider we're at 279.

That's where the market was right before steve liesman started to read what the fed was going to embark on. So basically, it's unchanged and it definitely some stochastic process going on. There. 297 was where tens were exactly before steve started.

To read the statement, that's pretty much where they are now. The yield curve tends to twos was separated by about 19 and a half basis points exactly where it's at now, but so what i think is the aggressive tendencies of the faction bullish volatility, knock it off inflation. We're gon na deal with you we're gon na squash inflation, so they have to have that unified front, but in reality the markets. Pricing in, in my estimation, worst case scenarios that most likely aren't going to happen now.

Do i think the fed isn't going to embark on a big tightening cycle? Of course i do, but i just think that going back bitcoin kind of unmoved right now, volatility is still dying as we're seeing the spy and the queues pop tightening and the markets. The same markets we're quoting now we're showing three more very curious. If this will hold, i don't think we're out of the woods quite yet. So i'm just saying that we need to slay inflation.

You need to have a unified front of being tough, but you can't back down at all, even though deep inside i do think the fed understands that inflation, at least caused by supply chain issues, is going to moderate. The problem is: there's lots of inflation that isn't like labor inflation right now we say you know you're not getting paid as much inflation is going up, but my guess is in two or three years: that's going to reverse a bit. We're going to see higher wages. Stay and we're going to see some of the inflation levels actually dip below that.

I think the fed's doing as good a job as possible, considering they waited first move, is the wrong one. Looking a little heavy, the equity market to bob pizzani stocks, looking a little cheered it wouldn't it would seem bob. I don't know about that. Bobo muted same thing: coming around the bond market, we were moving actually before the fed announcement.

A couple minutes before 4 to 186 and then right after that, we were moving up and uh moved to 4210 we're right around the 4200 level right now, so fairly, muted reaction. I think the issue for everybody down here is: has the market priced in enough fed hawkishness we're talking about three percent fed funds at the end of the year? Powell has implied he wants a soft land. The stock market doesn't believe that he's going to be able to deliver on that. That's the big problem.

So can you do a soft landing or not, and the problem is at the meeting i think you're gon na find out or in the press you're gon na find out. He can't imply that they're not gon na be even more aggressive. He can take 75 basis points off the table and if he doesn't that's going to imply an even harder landing, so it's hard to argue for a soft landing when the fed isn't going to stop with the aggressiveness. Overall, i can tell you one thing: there is a very bullish opinion being pushed that inflation is peaking, that's going to cause the fed to back off later in the year powell himself addressed this uh.

Give me my money. Maybe the peak will be in march. Come on so we can't count on it. So powell himself has told the bulls: don't expect the seller.

You guys told me to go short at first. I did that and then i always think the first move is the wrong one. So i went short again at 204. and i'm looking to try to get a thousand dollars yeah.

Absolutely i think, generally uh come on. Give me money is right. I think the markets have priced in a very aggressive fed. What we may hear from them today is no explicit dovishness.

It does not make sense for them to be dovish. Just give me my money give me my money: got ta pay them bills about a 75 basis, point rate hike or an intra meeting rate hike, and they don't explicitly explicitly endorse it. Coming back on, the more bouncing off just above 65, put their foot on the pedal, but they may not explicitly endorse some of the most aggressive forms of tightening and i think that's what we'll be watching for to see what their path is going forward and how The markets may react to you. What were the big surprises for you here? Well, you know i.

I think that the fed will likely continue to be very, very hawkish, but it seems that the initial statement that they that the initial statement wasn't overly hawkish. So i think that's what they've done every single time and then they're like hey, don't forget we're going to supervise that we have to respect the initial conditions, the mark. You know the economy has been strong and we're coming from a very, very strong footing. The equity markets, for example, have been very, very strong how clearly they've weakened, but we're coming from a very, very strong place.

So what it seems to me like is that the markets are still a bit unafraid of the fed. Now the only issue that i have with that is that, if the fed wants to use their financial jerome powell will be speaking in 20 minutes, 20 minutes probably have to um go through a little bit more pain before the the fed actually achieves its goal of Pushing inflation to the levels that it wants to um and and that they're confident that they'll actually get to that target inflation point, and i don't see that quite yet, so i'm still a little bit nervous about the markets going forward today. Right now might be okay, but but going down the road, i'm a little bit concerned david. Why don't you react to what jim just said? Are the markets insufficiently afraid of the fed? I think that was one of the takeaways sufficiently afraid.

No, i think the markets are probably getting this about right. I think the fed is fundamentally dovish by its nature. They've been squawking like hawks over the last year because inflation's been high, but the reality is as the economy moves forward through the end of this year into next year, it's going to slow inflation's going to roll over and the fed doesn't want to make the typical Mistake of waiting too long and then doing too much and putting the economy into recession, and i think that you know jay powell. This press conference is going to be asked a lot of questions along the lines of.

Are you afraid of tipping the economy to recession? He's i think, he's got to reassure people about that, we're pretty confident inflation will come down and no we're not. It blows my mind that anyone's buying this there's there's no way. This could be good. Nothing in my mind, steve.

Let me turn back to you and i'm not gon na find it about the interest rate. This is not a good scenario who would be buying the case at which, right now, it's going to start at about 47 billion a month. If i'm reading right between treasuries and mortgage backs and rise to 95 billion um, why didn't the fed go there sooner? That was a way to to get into this uh tightening a little quicker uh. Why didn't it go to 95 billion? No! No! Why didn't it begin? Why didn't it begin squeezing the balance sheet sooner? That's number one, and what do you make of the pace that it is embarking on now, so i think that the fed not going sooner is one of the biggest mistakes the fed has made.

Maybe since i've been covering them, i mean they all sort of felt like they ought to have. No, no, no, no, no, no, they were doing whip. Sauce saw yes a time which was the same month that they reversed course. They had a plan to do something and they wanted to be.

I guess the only excuse you could give is they wanted to follow through with their plan to do something through march. They did so and then they reverse course almost automatically. It's part of the reason they have to be a little more firm now in terms of raising rates. Probably why they're doing 50s now they probably should have stopped powell made a pivot a little bit late, not crazy, late in november, you could argue.

Maybe he should have done it in september, but you could say he still had a covet crisis to deal with back. If you remember, there was another outbreak okay, so he was a little late in the in the rhetorical pivot, but he was much too late in terms of the pivot when it came to buying or stopping the the purchase of assets in qe. Let me just say real quickly: tyler uh, when all is said and done, i hate to do something too quickly. After a statement comes out, we're now uh.

You know 11 minutes after liftoff here and i see very little change here in the fed funds. Futures market outlook, i'm still seeing them price in 450 basis, point rate hikes uh through september, which means you get to that sort of nebulous neutral rate of two and a quarter two and a half by the september meeting. There's maybe something less of a chance of a 75 basis, point rate hike built in maybe a little bit that came off the boil, but not entirely - it's still, 35 percent uh for for june or july, so um. I i happen to think that this is exactly what powell wanted.

He set the market up for this report or this this these actions he gave it to them, and the market at the moment seems to be kind of even and flat on getting exactly what powell told us we were going to get on that note. Rick santelli, a final thought from you here: the 10-year, which initially dropped about five basis points on the statement is, is a little bit higher again. 297. 298.

That range. What are you watching? You know i am watching the twos to ten spread. It's just the easiest way to kind of handicap. What's going on on the shorter maturities that have been more aggressive in the rate increases because they're more closely tied to the fed overnight rate, and the long end, of course, has a variety of issues.

A investors like to buy higher yielding instruments, even if they're, not necessarily in positive real rate territory. And of course we have this notion that the long end is going to be our canary in the coal mine. So to speak on whether the recession, which is caused by inflation and bad policies and mistakes, not by raising rates which is actually the medicine. And i think that by watching that, if we get around zero, that's not going to be a very good thing.

And if we see a bit of steepening, i think that would be a better thing, all right. There's the 210 spread just under 20 basis points and big. Thanks to our panel everybody. We really appreciate your thoughts.

Your reaction, your analysis of this hour, uh mona, jim rick, bob and david kelly and, of course our steve leisman. You don't see him in the picture there because he's going over to ask some questions to jay powell at 2 30, when the press conference starts coming up here, we have more analysis and reaction to the decision from a former governor who's been critical of the central Bank plus ed yardeni on the potential still for a soft landing for markets and the economy away from this market. Moving press conference with soft landing, my ass, all right, here's what the dealio is. Basically everyone was expecting a 0.5 interest rate increase.

Before this we were already at 0.25. They just hit us with a 0.5, so in totality we're now at 0.75, but what they, what was literally just announced, was yes we're getting that 0.5 that everyone was pricing in and in terms of looking to the future. All the meetings, the next four meetings that will happen between now and september - that's what the futures market is still pricing in each one of those individually being a 0.5 interest rate increase. Now, that's good to know blah blah blah, but more interesting is their concept of a soft landing.

Are they gon na be able to be like sully on the hudson? Will they be able to pull it off and when i say, pull it off and they and blah blah blah? What am i talking about? I'm talking about the fed and i'm talking about the nine trilli that they've put into the system, basically to get us through the rona period. Well, that can't just like sit there, that's not how stuff really works, they have to take care of it and what you do it's referred to as balance sheet normalization. It's referred to as a balance sheet runoff. Basically, you got ta.

Let things mature and fall off of your balance sheet or you have to actively sell them so beginning on june 1st. They have mortgage-backed securities and some corporate debt and that type of stuff - and they also have treasuries so from june july and august those three months. Starting on june 1st june july august, they will be selling. The cap will initially be 30 billion per month and after three months it will increase to 60 billion and in terms of agency debt and mortgage-backed securities, it will initially be 17.5 and then they will increase.

It to 35. so june july and august it's going to be 47.5 billion dollars worth of selling per month and then, starting in september it will get notched up to 95 billion. So the way the market has run like an absolute madman if this ever loads load or faster, faster, faster, faster, faster, faster, faster sorry, i'm just being impatient all right. Let me clear all this up, so this run here remember when rona was announced, rona was announced.

No one knew what was going on and we fell off february 20th of 2020 and then all of a sudden you know what happened here. Do you know what the difference was? Was that the end of march, the fed stepped in and said we are going to unleash one of the most insane ridiculous policies of unlimited quantitative easing that this world has ever seen. So this is what happened when the announcement of the rona and the world's getting shut down and travel was shut down between the u.s and europe. It was crazy and then the fed right in here said: hey, you know what we're gon na announce next week.

We're gon na do quantitative, easing a crazy policy, quantitative easing, so they started injecting money into the whole system which served as a backdrop and it just shoved everything higher and higher, and higher and people who were into higher risk high reward things like big tech and All that good stuff, it just kept pushing it higher. Well, as you can see, this obviously changed on january 4th. Do you know what was announced on january 5th when we got the meeting minutes from the fed on this day the day that was the second one? After the peak, if you zoom in on january 5th, remember we're talking about this full run, they announced qe here it runs all the way up and then on the fifth. We got meeting notes from the fed.

That said, they were now looking into balance sheet. Normalization balance sheet, runoff, aka, quantitative tightening, we went from quantitative easing to quantitative tightening and ever since then, we've been in a down trend. Now am i calling for d-day absolutely not? Am i calling for a market to sell off yeah? It would be crazy not to call for that they're about to sell 95 billion dollars worth of funny stuff every single month you talking about just buying and selling aggression, we're about to run into a wall of selling. Now, with that, i don't i'm never ever going to be calling for like a d-day type of a scenario, because you can make money in any environment.

It's just do you know the trend if things are trending up and you're being supported by the fed or just some bullish, tailwinds, that's great. You go bullish, but if that's not happening and you're getting hurt by the fed, remember like you, don't fight the fed. If the fed's working against you and you're running into some very serious headwinds, well, you make money going the other way you can make money with the market going up down or sideways it doesn't matter. The name of the game is identifying the trend.

I wholeheartedly believe in terms of the economy and also in terms of the stock market, we're about to be in for a pretty rough patch between now and the end of 2023.. Who am i to say this? I don't know no one, i'm i'm nobody. I didn't study economics. I didn't work at some fancy hedge fund.

These are just my own opinions. So do your own dd folks! I do not have the credentials. I don't have the credentials, i'm just saying, studying how this stuff has played out in the past, because i fortunately was hooked on phonics as a child. I do have the ability to read hey.

I just made my thousand let's check in on that. Let's check in on that look at that snagged it snagged it short there locked in my thousand uh we're clawing back our losses from the margin call earlier today. Slowly, but surely they are getting clawed back um anyway. What was i saying? I have no credentials, but i was hooked on phonics as a child.

I have the ability to read and i also have the ability to see obvious trends in the market. If things are ripping up, you look into why the fed was buying everything. Now on starting on january, we started downtrending, ask yourself what changed the fed said: we're gon na start selling things it's pretty basic. This doesn't take some big brain phd economist master expert trader.

Really to piece together we're running into 95 billion worth of selling per month. That is a lot of headwinds. I don't think at least i just we're gon na be in for a bearish red period. That's my bias! Until inflation actually gets under control right now, we're still at a four decade, high level of inflation.

It's i'm not the one who got us into this like situation, don't get pissed at the messenger, that's just what we're dealing with. I think in the short term, the next year year and a half there's going to be some rough rough times in terms of the market ahead, if you're on the right side of that you'll be making a shitload of money. If you decide that no i'm going to still continue in trusting in the fed who told us this was transitory, not worrying about it. If you choose to still trust in the government who says they have it under control and not to worry at all, and they are just going to blame, what was it at first, they were blaming greedy corporations now they're blaming putin.

If you want to trust in them have at it, but my trust is not in the fed. It is not in the government because if you do it, it's just like simply a money losing strategy. That's my opinion. Do what you want.

I don't care, i'm telling you what i'm doing that doesn't make me right. I mean this morning. I already lost money. Yesterday i lost money, i'm i'm not saying you should copy me.

In fact, it's probably crazy to copy me. I'm just simply sharing my opinion and what i'm doing in the scenario all right. What else do we have rockin? What are you using to short this by the futures market? The s, p, 500 futures contract, it's just heavily leveraged and i just like the way it makes me feel uh. I like the heightened emotion of big, wins and big losses, which probably tells you something about.

My like strange psychological makeup, but i don't know it's for the content. I know you guys like it you guys like the good stuff. Let's do it i'll. Let you guys trade we'll go for a hundred bucks.

Next. 100 aka two points: oh shoot. That was meant to be a poll hang on. Let me make it a poll red green.

All right, you have, i don't know a couple minutes to answer a couple minutes and on rumble you could just comment it on rumble just comment up or down. This is how we play the game. It's all chaos. It's welcome to the thunderdome, welcome to potentially the start of a recession.

He says with a glimmer in his eyes short, whatever kramer is pumping, probably a solid strategy, probably a solid strategy. All right votes are coming in dominantly red dominantly red, which means, let me get it set up la dee da order. Fill order, filled order filled all right. It's filled we're in uh.

If it comes down we'll make money, i did it. I put in the profit target: i'm not going to be messing with it until it hits, but i've learned to trust in you folks. How does this affect amc um? I would say in general: if the market sells off, i don't there is a some people think that amc will go up if the market crashes. I am not one of those people.

I think people are really really misinterpreting what a negative beta value means and you only get a negative beta on amc if you're, using a very, very specific time frame like i said this negative beta concept, i think the people who are subscribing to that concept, don't Fully understand what it is, it's going to be tough for really any equity to perform. If the market is crashing, it's just that's a cold hard truth like you're going to want to look for people go to safe haven, investments such as like gold or right now, you're saying real estate pop. We talked a lot about really well, not a lot, but we talked about real estate this morning. Um there's certain alternatives that people enjoy.

It's just. I think some of the things that will get hit the hardest are going to be these high growth, tech stocks uh. But is apple, a hedge, no apple has almost a beta of one i mean apple will be tied very closely to the s p 500.. The thing that moves inverse to the overall market if you're, just looking for a basic thing, is volatility.

So if you think there's going to be an abrupt sell-off, you would be looking at something that's based on the vix, so vxx uv xy that will have an inverse relationship um. You could also real estate. Money could very well be going into real estate uh. You could be looking at like commodity etfs such as like gold, silver or, like that type of thing.

There's various ways to do it like there's not like one perfect thing uh, but people like i said they go for safe haven, investments, safe haven, investments all right. All right, our right. We have about two minutes, two minutes. Two minutes.

Two minutes. You guys voted red. You better, not lead me astray meant if apple is a safe haven, apple's, not a safe, a moon, apple's, a leading tech play. Safe havens are like literally like gold, it's gold, some people would argue bitcoin, but bitcoin is now like one of the highest correlation marks with the nasdaq.

Is this live? Ah, that's probably gon na dmca me. Don't do it to me fed they got me their own music. That elevator music always takes me down whoa wrong way. Spy.

Are you guys sure about this whole red guess that oh this is. This is getting out of hand very very rapidly, because how confident are you, and also what i just showed? You is proof that tradestation did not stop trading. I'm literally trading on tradestation, all right, jerome pal, give us give us some wow. This is some craziness right here.

Look at this well, would you look at that? No one has a clue what's going on, that's what makes it fun! That's what makes it fun all right pal! We are looking at a minute out if he's on time, he's usually more on time than president joe biden, but to be fair. President joe biden was only like a minute late this morning, so we can't count that one against them whoa. That's. We got some volume.

Pops man buckle up buttercup the market go burr, isn't it just coming right back down all right fed? Let's do this thing uh what's cnbc up to, we don't need that. We have our own stream of it. You gon na. Do it.

We starting alternate alternate player here. We go, let's rock, let's rock, let's rock, is he gon na come on? Oh jerome, it's your time to shine. This is a bigger player, so we'll use this one. Jerome, hello, hello, hello, mr jerome.

It tanks, right before he comes on in the bank before i go into the details of today's meeting, i'd like to take this update. Let's do it again, let's vote again next, two points next two points much too high and we understand the hardship it is causing and we're moving expeditiously to bring it back down. We have both the tools we need and the resolve that it will take to restore price stability on behalf of american families and businesses. The economy in the country have been through a lot over the past two years and have proved resilient.

It is essential that we bring inflation down into the sustained period of strong labor market conditions that benefit all from the standpoint of our congressional mandate to promote maximum employment and price stability. The current picture is plain to see. The labor market is extremely tight and inflation is much too high. Against this backdrop, today the fomc raised its policy interest rate by a half percentage point and anticipates that ongoing increases in the target rate for the federal funds rate will be appropriate.

In addition, we are beginning the process of significantly reducing the size of our balance sheet. I'll have more to say about today's monetary policy actions. You guys are very briefly reviewing economic developments. Orders are expanding at a robust percent pace last year.

Overall economic activity edged down in the first quarter underlying momentum remains strong. However, as the decline largely reflects reflected swings in inventories and net exports, two volatile categories, whose movements last quarter likely 58 percent down for future, we're short again: 17. We're going for more than two points of the game, we're going for a thousand dollars. The labor market has continued to strengthen and is extremely tight.

Over the first three months of the year, employment rose by nearly 1.7 million jobs. In march, the unemployment rate hit a post pandemic and near five decade, low of 3.6 percent improvements in labor market conditions have been widespread, including for workers at the lower end of the wage distribution, as well as for african americans and hispanics labor demand is very strong And while labor force participation has increased somewhat labor supply remains, subdued employers are having difficulties, filling job, openings and wages are rising at the fastest pace. In many years, inflation remains well above our longer run goal of 2 percent. Over the 12 months ending in march total pce prices rose 6.6 percent, excluding the volatile food and energy categories.

Core pce prices rose, 5.2 percent aggregate demand is strong and bottlenecks and supply constraints are limiting how quickly production can respond. Disruptions to supply have been larger and longer lasting than anticipated and price pressures have pressures have spread to a broader range of goods and services. The surge in prices of crude oil and other commodities that resulted from russia's invasion of ukraine is creating additional upward. Pressure on inflation and covet-related lockdowns in china are likely to further exacerbate supply chain disruptions as well.

Russia's invasion of ukraine is causing tremendous loss and hardship, and our thoughts and sympathies are with the people of ukraine. Our job is to consider the implications for the us economy, which remain highly uncertain. In addition to the effects on inflation, the invasion and related events are likely to restrain economic activity abroad and further disrupt supply chains, creating spillovers to the us economy through trade and other channels. The fed's monetary policy actions are guided by our mandate to promote maximum employment and stable prices for the american people.

My colleagues and i are acutely aware that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing and transportation. We are highly attentive to the risks that high inflation poses to both sides of our mandate and we're strongly committed to restoring price stability against the backdrop of the rapidly evolving economic environment. Our policy has been adapting and it will continue to do so. At today's committee meeting the at today's meeting, the committee raised the target range for the federal funds rate by a half percentage point and stated that it anticipates that ongoing increases in the target range will be appropriate.

We also decided to begin the process of reducing the size of our balance sheet, which will play an important role in firming the stance of monetary policy. We are on a path to move our policy rate expeditiously to more normal levels, assuming that economic and financial conditions evolve in line with expectations. There is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple of meetings. We'll make our decisions meeting by meeting as we learn from incoming data and the evolving outlook for the economy, and we will continue to communicate our thinking as clearly as possible.

Our overarching focus is using our tools to bring inflation back down to our two percent goal. With regard to our balance sheet, we also issued our specific plans for reducing our securities holdings consistent with the principles we issued in january. We intend to significantly reduce the size of our balance sheet over time in a predictable manner. By allowing the principal payments from our securities holdings to roll off the balance sheet up to monthly cap amounts for treasury securities.

The cap will be 30 billion dollars per month. For three months and will then increase to 60 billion dollars per month, the decline in holdings of treasury securities under this monthly cap will include treasury coupon securities and, to the extent that coupon securities are less than the monthly cap treasury bills for agency mortgage-backed securities. The cap will be 17.5 billion per month for three months and will then increase the 35 billion dollars per month. At the current level of mortgage rates, the actual pace of agency mbs runoff, would likely be less than this monthly cap amount.

Our balance sheet decisions are guided by our maximum employment and price stability goals and, in that regard, we'll be prepared to adjust any of the details of our approach in light of economic and financial developments. Making appropriate monetary policy in this uncertain environment requires a recognition that the economy often evolves in unexpected ways. Inflation has obviously surprised the upside over the past year and further surprises could only to the fed. We therefore will need to be nimble in responding to incoming data and the evolving outlook, and we will strive to avoid adding uncertainty to what is already an extraordinarily challenging and uncertain time.

We are highly intentive attentive to inflation risks. The committee is determined to take the measures necessary to restore price stability. The american economy is very strong and well positioned to handle tighter monetary policy. To conclude, we understand that our actions affect communities, families and businesses across the country.

Everything we do is in service to our public mission. We at the fed will do everything we can to achieve our maximum employment and price stability goals. Thank you and i look forward to your questions here. We go.

Here's the real show. Oh look at those hands. These suits aren't messing around today. Thank you.

Nick chambers of the wall street journal uh, chair powell. The unemployment rate at 3.6 in march is now essentially at the level that the committee uh had expected would prevail over the next three years and at the bottom end of fomc participants. Projections for the longer run rate that you submitted in the projections of the last meeting. How has your outlook for further declines in the unemployment rate change since march? What does this imply for your inflation forecast and how has your level of confidence changed with the regard with regard to the feasibility of slowing hiring without pushing the economy into recession? Thanks, thank you so um, so yeah you're right 3.6.

Unemployment is uh just about as low as it's been in 50 years, and i would say that i expect and and committee members generally expect, that we'll get some additional participation, so people will be coming back into the labor force. We've seen that, particularly among prime age people, and that will of course tend to hold these primaries rate up a little bit um. I would also expect, though, that that job creation will slow job creation has been at. You know more than half a million per month in recent months, very, very strong, particularly for this stage of the economy, and so we we think, with with fiscal policy, less supported with monetary policy, less supportive uh.

We think that job creation will slow volatility, so it is certainly possible that the unemployment would go down further um but um. So i would. I would expect those to be relatively limited because of the additional supply, and also just this, just the uh, the slowing in uh, in in job creation implications for inflation, really that really the wages matter, a fair amount for companies, particularly in the in the service sector, Wages are running high, the highest they've run in quite some time and um. They are one good example of uh or good illustration really of how tight the labor market really is.

The fact that wages are running at the highest level in many decades and that's because of an imbalance between supply and demand in the labor market. So we think, through our policies through further healing in the labor market, uh higher rates, for example a vacancy filling and things like that and and more people coming back in. We like to think that supply and demand will come back into balance and that, therefore, wage inflation will will will moderate to still high levels of wage increases, but not but ones that are more consistent with two percent inflation. Uh.

That's that's our expectation. Your third question was your level of confidence that you can slow hiring without pushing the economy into a downturn. So i guess i would say it this way. Um, it's uh, there's a path, there's a path by which we would be able to have demand.

Uh moderate in the labor market, and and have therefore have vacancies, come down without unemployment going up because vacancies are at such an extraordinarily high level. They're 1.9 vacancies for every unemployed person, 11 and a half million vacancies, 6 million unemployed people so and we we haven't been in that place on the vacancy. You know, sort of the vacancy unemployed curve. The beverage curve we haven't been at that sort of level of of a ratio in the modern era.

So in principle it seems as though, by moderating demand, we could see. Uh vacancies come down and as a result, and they could come down fairly significantly and i think, put put supply and demand at least closer together than they are, and that that would that would give us a chance to have lower get to get inflation. You know, get wages down and get inflation down without having to slow the economy and have a recession and have and have unemployment rise materially. So, there's a path to that now i would say i think we have a good chance to to have a soft or soft-ish landing or outcome.

If you will and i'll give you a couple reasons for that, one is uh. Households and businesses are in very strong financial shape. You're looking at you know, excess savings on that on balance sheets excess in the sense that they're substantially larger than the prior trend. Businesses are in good financial shape.

The labor market is, as i mentioned, very very strong, and so it doesn't seem to be anywhere close to a downturn um. It's therefore, the the economy is strong and is well positioned to handle tighter monetary policy. So but i'll say i do expect that this will be very challenging. It's not going to be easy, and it may well depend, of course, on events that are not in our under our control, but our job is to use our tools to try to achieve that outcome and that's what we're going to do.

Steve eastman cnbc thanks for taking uh my question, mr chairman uh, you talked about using 50 basis, point rate hikes or the possibility of them in coming meetings. Uh, might there be something larger than 50 is 75 or so, and perhaps you could walk us through your testing line? Why, one month should we or one meeting should we expect a 50? Why something bigger? Why something smaller? What what is the uh? The reasoning for the for the level of of the amount of tightening, thank you sure, so, um 75 basis. Point uh in an increase is not something the committee is actively considering what we are doing. We raised 50 basis points today and, and we've said that again, assuming that economic and financial conditions evolve in in ways that are consistent with our expectations.

There's a broad sense on the committee that additional 50 basis increases should be on 50 basis. Point acres should be on the table for the next couple of meetings, so we're going to make those decisions at the meetings, of course, and we'll be paying close attention to the incoming data and the evolving outlook, as well as the financial conditions and and finally, of Course we will be communicating to the public about what our expectations will be as they evolve. So the the test is really just as i laid it out: economic and financial conditions, evolving broadly in line with expectations - and you know i think expectations are that we'll we'll start to see inflation. You know flattening out uh and uh, not necessarily declining yet, but we'll see more evidence.

We've seen some evidence that the core pce inflation is is perhaps either reaching a peak or flattening out. We want to know we'll want to know more than just some evidence. We want to really feel like we're, making some progress there, and but i mean i, i we're going to make these decisions and there'll be a lot more information. I just think we want to see.

We want to see that information as we get there. It's a very difficult environment to try to give forward guidance 60 90 days in advance. There are just so many things that can happen in the economy and around the world. So um, you know we're leaving ourselves room to look at the data and make a disgruntled.

You know decision as we get there, i'm sorry, but if inflation is lower one month than the unemployment rate higher, would that be something that we would calibrate towards a lower increase in the in the funds rate or uh? I don't think one month. One month is not now: no one month's reading would not doesn't tell us much. You know, we'd want to see evidence that inflation is, is moving in a direction that gives us more comfort. As i said, we've got two months now where, where core inflation is, is a little lower, but we're not looking at that as a reason to take some comfort, you know, i think we need to.

We need to really see uh that our expectation is being fulfilled, that inflation in fact, is under control and starting to come down. But again it's not like we would stop. We would just go back to 25 basis. Point increases it'll, be it'll, be a judgment, call when when these meetings arrive, but my again our expectation is, if we see what we expect to see, then we would have 50 basis.

Point increases on the table at the next two meetings. Next, two meetings. Thank you. Colby smith, in the financial times, given the expectation that inflation will remain well above the fed's target at year end what constitutes a neutral policy setting in terms of the fed funds rate and to what extent is it appropriate for policy to move beyond that level? Uh at some point this year, so neutral um, when we, when we talk about the neutral rate, we're really talking about the rate that neither pushes neither pushes economic activity higher, nor slows it down.

So it's a concept. Really, it's not something we can identify with any precision, so we estimate it within broad bands of uncertainty and and the current estimates on the committee are sort of two to three percent and also that's a longer run estimate. That's that's an estimate for market pop economy. That's at full employment and two percent inflation.

So really the way. Really what we're doing is. We are we're raising we're raising rates expeditiously to the what we see as the broad range of plausible levels of of uh of of neutral. But we know that there's not a bright line drawn on the road that tells us when we get there, so we're going to be looking at financial conditions right.

Our our policy affects financial conditions affect the economy, so we're going to be looking at the effect of our policy moves on financial conditions. Are they tightening appropriately and then we're going to be looking at the effects on the economy and we're going to be making a judgment about whether we've done enough to get us on a path to restore price stability? It's that so, if that path happens, to evolve levels that are higher than estimates of neutral, then we will not hesitate to go to the to those levels we won't. But but again it's i there's a there's, a sort of false precision in in the in the discussion that we as policymakers, don't really feel you know it's. It's you're going to raise rates and you're going to be kind of inquiring.

How that is affecting the economy through financial conditions, and of course, if, if higher rates are required, then we won't hesitate to deliver them thanks tripal neil irwin, with axios uh. Do you see evidence that inflate uh inflationary psychology is changing that in areas like workers, wage demands, businesses willing and willingness to raise prices uh? Do you see evidence that that there is a psychological shift going on on inflation? So we do. We don't really see strong evidence of that yet, but that does not in any way make us comfortable. I think if you see look at short-term inflation expectations, they're quite elevated and you can look at that and say well, that's because people expect inflation to come down and and in fact inflation expectations come down fairly sharply.

Longer-Term inflation expectations are have been reasonably stable but have moved up to, but only to levels where they were in 2014 by some measures. So you can look at that and i think that's that's a that's a fair description of the picture, but uh. It's really about the risks. We don't see a wage price spile spiral.

We we see that companies have the ability to raise prices and they're doing that, but there have been price shocks. So i just think it takes you back to. The basic point was that we know we need to expeditiously move our policy rate up to ranges of of more normal, neutral levels, and we need to look around and and keep going if, if we don't see that financial conditions have tightened adequately or that the economy Is behaving in ways that suggest that we that we're not where we need to be so again, i you don't see those things yet, but i would say: there's no basis for feeling comfortable about that. It's it's a risk that we simply can't.

We can't uh. We can't run that risk. We can't allow a wage price spiral to happen and we can't allow inflation expectations to become unanchored. It's just something that we can't allow to happen, and so we'll we'll look at it.

That way. Great thanks, chair pal gina, smiling with the new york times you mentioned in the statement, both the upside risks to inflation from russia and china. Obviously those are very much supply chalks rather than demand side, and i wonder what you meant to convey by adding them. I wonder what you meant to convey by adding those well, so we um our tools, don't really work on supply shocks, our tools, work on demand and um to the extent we can't affect really oil prices or other commodity prices or food prices, and things like that.

So um we can't affect those but there's a job to do on demand and that you can see that in the labor market, where demand is, is substantially in excess of supply of workers, and you can see it in the product markets as well. But i i guess, i'm just pointing out that a couple of things for both uh the situation in ukraine and the situation in china, they're likely to both add to headline inflation and people are going to be suffering from that. You know people.