Hey everyone welcome back. We have the federal reserve's decision coming in any sec. What we, the federal reserve taper the taper, is, of course, the reduction of bond buying from 40 billion dollars per month in mortgage-backed securities and an additional 80 billion dollars a month in uh treasury bonds. It is a lot of money, printing and at some point here it will be coming to an end.

However, right now we do expect that the taper will not actually happen uh. Today, we do expect that the november 4th meeting is now the most likely to experience a taper, and the reason for this is uh specifically because we uh. We expect uh that, because of the jobs report that came in at a miss at the beginning of the month and the uh inflation readings that held a little bit stable, somewhat stable, we should see some kind of pause and the excitement over having this uh. This taper happen uh as soon as uh previously thought uh, which it was supposed to be.

There was a pretty good chance. It was gon na be this meeting but uh. Now it's not so uh. Let's go ahead and get started here.

We should be out in about uh 10 seconds uh. Sometimes it takes a little bit longer. It's not out just yet all right, let's see here, federal reserve.gov is not even loading right now come on uh all right. Well, no problem.

We always have a backup. I mean i might pull this here and i'll pull the statement up in just a second here hold on good way to break the linkage between rachel's paper would be to see what we got we'll see. If that's what they do there, it is do we have it rates were unchanged in the statement here got it uh, but i can't get. It said that if economic progress continues, reducing asset purchases may soon be warranted.

I'll. Give you the exact language on that in general: yes, not yet no taper yet affected by the pandemic. The federal reserve said have improved in recent months, but the rise of covet cases have slowed the recovery and whoever i think it was david kelly said it was right. They did lower the forecast for 24 months and back to that, the second decision was unanimous.

Now the median forecast now calls for a rate hike in 2022. Nine rate hikes were called for uh in 2022, three of which actually call for two rate hikes the funds rates hitting 1.8 in 2024. So quite a bit of work to do unemployment rate was is forecast. The median is slightly higher uh 4.8 instead of 4.5 and a few other things somebody's talking about inflation there they did pull up the inflation forecast, or at least the median forecast of all 18 members to 4.2 from 3.4.

It remains above 2, interestingly, through 2024. This is our first look at 2024 and gdp was indeed pulled down i'll, give you that number there five point: nine percent from such a one point one percent off of the gdp forecast for this year and next year. Actually, they put a little bit back about a half a point: three point: eight percent, so they're still seeing above trend trend growth through 2020. Okay, we're going to break through this in just a moment.

Take a look at this. It looks like uh. Crypto is a moving higher on uh that slightly higher here, ada jumped up to about 2.2. You've got the s.

P 500 uh, mostly moving up here on this news, so that's exciting to see as well. So this was just pretty much expected here that the federal reserve would come in with uh, with better news than expected the market's not like super up and down or like super excited about this. It's almost kind of like the market expected this year uh. We finally got the documents loaded as well, so i'm going to jump this uh this on over summary of economic projections.

I'm downloading this right now we're going to pull this up in just a moment, we'll look at it together! Listen in here for a moment. First from a few moments ago, but as we know, uh, the first move is often the wrong one, or maybe it's right, 24 hours later, and things often change like 28 times in between with that said, you know liz. I i totally take your point about how they want to describe. The tape you know is the taper which it could sound.

That could happen in six weeks. Is that a tightening or not well? The whole point is everything is getting tighter, so they're they're talking about the taper they're moving the median first rate hike into 2022.. You know that's all pretty consistent with and remember, not tapering means more money printing right, so it kind of makes sense that crypto's moving on this, the pandemic framework is going away. They're they're getting us back to something more normal yeah.

The evolution is happening, but it's happening very, very slowly and i think steve said this earlier today on a different program that, even if they taper at the speed that we're expecting they're still buying a lot of bonds through the first half of 2022. So it's not as if, suddenly, the liquidity is going to leave the system or leave the picture, there's still a lot of liquidity that they're putting in something uh out of the ordinary. As for the market action, i think before we got the announcement, it was interesting to see that the 10-year yield had fallen and equities were up strongly so at broad brush. You could assume that the market was expecting a dovish statement, but if you pulled back the cover a little bit and looked at what sectors were actually driving, it was cyclicals right.

It was materials, it was energy, it was financials industrials. So what that would suggest? Okay, i finally got it my goodness, i'm sorry that took a little bit longer here, so we already know their statement no taper and rates unchanged. We expected that, but this is really what we wanted to look at is the dot plot here. Finally, uh darn, like their federal reserve website, was just like the biggest pinwheel uh.

This is not great, but anyway, here we go okay, so this is what we want to look at uh. This is the summary of economic projections uh for uh today, which is uh september 22nd at 2021.. Okay. So what we have here is uh the june projection.

Is this number right here in green and what you're looking for here are changes to understand? Where's the fed's mindset, and so what you can actually see is this modification for the 2021 gdp down to 5.9. You have companies like morgan stanley that are a little bit more bearish uh than the federal reserve. Here it looks like you had estimates at uh. 5.8 was the low for estimates here from folks at the fed, so the fed a little bit more bullish on the state of the economy here looks like inflation.

The uh prior projection for inflation was a 3.4 2021 projection that has been moved up to 4.2. But take a look at this. You really see the fed consolidate their inflation expectations to that 2.2 range by next year. So we're really expecting to see inflation reflect down.

Just a matter now of determining okay: what what day is? Are we going to see that kind of uh inflection to the downside? Uh? Let's see here also, you know it'll be kind of funny for doing right now and i'mma do it, because why not is i'm going to? Oh, that's, actually not bad hold on a sec i'll. Tell you exactly what i'm going to do all right ready for this hold on give me one. Second, here, okay, i don't know, i don't know if uh was the limit going to go through right now hold on a sec, let's see here, uh. Okay, give me a second here.

I don't know why weeble's so slow right. Now, it's killing me! So there we go okay, cool there. We go that went through uh, okay, so uh crypto moving. Obviously, on these expectations that the fed is also now realizing that fed's probably going to stay up longer as usual, when i do a short term trade or yolo uh, i i send an alert out in the stocks and psychology of money group i'll talk about this.

In a second here i just want to make sure: let's get this all done, but um uh there we go okay, so anyway, we'll talk about that in just a moment. Let's go through the summary here and then i'll go through some of these details. So um. Okay, so pce inflation.

They revised this up, we're going to keep printing money uh not expected to stop printing money until they get to their their uh end of their uh or soon they say is when they expect to pay a taper. We've got the fed funds rate projection. This is interesting. Look at this here.

They are pricing in a rate increase for the end of 2022.. You see this and then they're pricing. It looks like uh, potentially two or three or two more rate increases here, because the way this usually functions is you would go point uh. You would go from point zero to point one which is really this range.

This is the usual rate increase. Then you would see a rate increase from 25 to 0.5 and it's always these ranges is what you have. So it's not like an individual rate. It's it's a range that you get 0.75, i'm sorry 0.50 0.50 to 0.75 and then you would see 0.75 to 1..

Take a look at this. The fed actually believes that we'll be here by this one percent number by 2023, this number here. So this is your 2023 and then here we're going to probably be here by 2022.. That's interesting so kind of moving up their expectations for a uh, a rate increase here.

That's interesting, uh, okay! So then um we've got what else do we have here? This is very interesting, so higher inflation expectations, but they're saying inflation's going to go down at 22 and three. So why then, the rate increase in 2022? That's not as exciting. I don't i did that's. One thing i did not want to see is that rate increase they're being priced in 2022, i mean they're, giving us a long-term heads up on it that you know we do want to raise rates.

Uh is their expectation; they did raise unemployment slightly here, and this is their reflection of the increase but notice that did not affect what their opinion is for the following years, see right here, the unemployment rate was boosted a little bit for their projection for 2021. At the end to 4.8, but they did not make any changes to 22 or 23.. Okay, that's interesting uh all right, so this is their gdp expectation that gdp is expected to rotate to the downside, and the big range of projections is in 2022 here in terms of what how strong is that market going to be in 22? But you can see the trend here. The trend is very much sort of slowing down and staying up, uh you're missing that the increase in rate determines the inflation rate.

Now it's it's the other way around. Its inflation determines uh the um uh, the interest rate that we use. So, let's see what else: here's the dot plot; okay, here's dots so right now, we've got quite a few for 2022, actually we're at one two: three, four: five: six: seven, eight, nine! That's nine! For a 20 22 increase with four seven, eight one, two three four: five: six: seven, eight, nine uh nine plus what we had over here - eight, we still got more over here, though yeah here you've got uh a plus sign seventeen, so you've got seventeen folks here. Let me pull up really quickly the dot, the last dot plot that we had.

So i think that's going to be interesting. Okay hold on here: let's pull up summary of economic projections, because they only do these a few times a year summary of economic projections. Let's see okay, one sec, we're going to compare two months ago. Is this it? No! Those are the minute meeting notes.

Oh, i don't know that i have them nope. I don't have them handy turn it all right. Oh well, that'd be nice. So, okay, what else do we have so dots here? I i can get these though hold on a sec, i'll pull them up, really quick, federal reserve and then we'll compare these the fomc for their last one fmc summary of economic projections.

Pdf. Let's see what we got here, we go june got him okay, and i really want to see their dots. Here's their pdf drone powell by the way, speaks in about 19 minutes. So we got a little bit of time summary of economic projections, press materials.

Now, oh got it! Here's the june meeting, okay cool! So here are the dots for june. So take a look at this. This right here is june and june, had one two three four five seven, so we had two dots move over from raising rates in 23 to raising rates in 2022, nice. Okay, so we have seen that's that's roughly.

What we expected is to see a few move over uh, and i do think it's interesting that they're thinking about raising rates here in 2022 by about a quarter of a percent okay, these uncertainty about g - that's this is where one place they're. Looking at uncertainty is gdp growth. We got cnbc mentioning rates expected to hit 1.8 percent in 2024. I mean that's similar to what that's.

What we see here see look at that: here's that 1.8 percent in 2024 - which they did not previously make an estimate of this, but this is also where i've been focused on seeing this earlier rate bump in uh in 2022: okay cool! So let's take a brief. Listen here to see what the commentary is: i'm gon na grab the bloomberg terminal as well and see what kind of notes we can get here. We've got the fed coming out in uh 17 minutes. The market is giving the federal reserve enormous room here to do what it wants to do, which is to taper without increasing yields.

This is a very big development. This is something that has been. I want to call it six eight months in the making where powell has been trying to get to this point and he said i'm going to taper, but he doesn't want to see that reaction in the bond market. I'm looking at fed probabilities for december i'm seeing a 48 chance of a rate hike which is kind of like where it was even a little bit low, okay, uh, so uh i did say i was going to talk about my yolo as well.

I've got the terminal rotating up okay, so i just bought a call option, i'm tempted to buy some shares as well, but as soon as this taper happened, i bought a call option in actually hud 8 mining, that is, a bitcoin uh. Uh mining play hot 8. Mining is a canadian north american miner. They uh when before bitcoin fell off with this whole uh evergrand uh disaster issue or whatever we had uh this sitting much higher.

Look at this. We ran up to 11.34. It's worth noting that it did fall before the ever grand issue because they issued uh debt uh. They were raising some money, which is actually a good thing because they just use that money to buy more bitcoin miners.

But with this news on evergrand kind of softening no taper going away and these expectations of having to raise rates a little bit earlier with the fed recognizing higher inflation, i think all of these things are just straight bullish for uh for crypto right now, so excited About that, so i'm going for a call option on hot 8 mining if you weren't into options shares obviously work as well. You don't have to follow me on this. Call. Options are very dangerous.

You could lose a lot of money very quickly uh. So you know just for what it's worth looking at uh crypto, it's worth watching crypto here you can see. As soon as these minutes came out, we started getting a rise in crypto, which absolutely makes sense. It makes sense for multiple reasons again number one uh rate increase now projected in 2022, the first one.

Then you have two more rate increases projected after that in uh in 2023, then you have the uh the fact that we're still gon na be printing money with the fed recognizing that we have higher inflation and lower jobs, growth uh, it's a it's a perfect uh Catalyst, in my opinion, for crypto to potentially rotate back now no guarantees crypto is extremely volatile. The good news is, we are at a lower position now than where we were at the beginning of september. Obviously you could see at this beginning of september. We were at a uh uh sort of much more dramatic uh place when it came to uh crypto.

We were about almost 53 000 and uh just recently. Have we really been rotating down off of this uh? So, in my opinion, it's an interesting time here to take advantage of uh some crypto uh. Now, interestingly, as well, you have uh robin hood that announced the crypto wallet and uh. At the same time, you are seeing robin hood bounce about 6.8 percent right now, which, in order to sign up for the crypto wallet, wait list.

You need to update the app which i've been trying to update the app, but it wasn't updating for me yeah. So it's just worth mentioning: you got ta, update the app and then check your email for an email from robinhood, and then i think you could join the waitlist. Did i get it? Okay? I think i finally did it let's see here if i can pull up the email and show you all not sponsored by robinhood, just saying that's: oh there we go open in app. Okay, let's see if it works.

Uh join waitlist, okay, wow. I got number 256. 000. wow, i was slow.

It honestly wasn't like the hugest priority uh, but anyway, that's that's the kind of like little excitement you get. There jump the list by half when you successfully invite your friends anyway. Jerome powell comes out in 12 minutes to come. Chat with us, so it'll be exciting to see what uh jerome powell is up to uh, okay, uh and yeah.

I do want to put it on member chat. I do, but i can't for some reason i just this was i was having some issues right when we started this live stream. I cannot get the edit window to load on youtube right now, so there's so. We are literally stuck on free chat.

I just get pinwheel on the edit window, so i don't know if it's a youtube problem or what it is but anywho, let's uh, let's continue on. I want to also see the fed statement. So, let's pull just the fed statement here quickly and also see what we've got in bloomberg. Okay, so this is the actual fed statement with which jerome powell is expected to read to us when he starts, but the federal reserve has committed to use its full range of tools.

This is uh the same thing he always says, with with progress on vaccinations and strong policy support indicators of economic activity and employment have continued to strengthen. Oh, you, optimist jerome, you optimist. It's it's awesome all right, but a rising covet cases have slowed the recovery. I don't think many are so terribly anxious about uh about this, but could be wrong uh, but inflation is elevated but largely remains transitory.

Overall, financing conditions remain accommodative in part, reflecting policy measures to support the economy and flow of credit path of the economy continues to depend on the curve of the virus, or course of the virus seek to achieve maximum employment. Inflation at a rate of 2 percent over the long run, with inflation having persistently below this longer run goal, the committee will aim to achieve inflation moderately above two percent. For some time know this. The committee expects to maintain an accommodative stance on monetary policy, keeping the fed funds rate at zero to one point: uh two: five percent - sorry uh 0.25 percent and expects it will be appropriate to maintain this until this is the big key right here and so everything's Going to be really related to that unemployment, uh and those unemployment numbers that come out uh, specifically the jobs report which the next jobs report - let's put this on the calendar jobs report release date, uh that would be for october els.

Let's see here, bls jobs report, okay, bls jobs report comes out october 8th, so it's actually not going to be the first friday. This time it's going to be the second friday uh, because uh the first friday it looks like, is on the very first uh. Let's see here, okay, so um, so we'll get the report on the eighth and uh. Let's see here federal reserve, okay statement until they have really reached levels consistent with the committee's assessment.

Okay, last december, the committee indicated it would increase its holdings of treasury securities by 80 bill per month and mbs by 40 bill until we've made substantial, further progress progress since then, the economy has made progress towards these goals. If progress continues broadly, as expected, the committee judges that a moderation in the pace of asset purchases may soon be warranted, so this is uh. This is the big move here about uh: hey, don't uh, no, no taper! Yet that we're expecting. Oh there we go! No taper, yet that's finally, loading no taper yet, but instead uh expecting it soon.

So we're probably gon na see jerome powell punt the questions here about when that taper is going to be. My expectation is you're you're, really looking at november 4th as the the earliest possibility of a taper announcement. Until then uh. You know, we've got cpi not coming out until october 13th.

Jobs report not coming out until october 8th, so you've got a little bit of time and personally, i think that could lead to uh. Even a crypto run uh hud 8 mining killing it right now, let's see btc usd. How are we doing? Uh jerome powell is going to be talking good and crypto. Your bitcoin still pushing nicely here very nice here we go.

Finally, this thing darn thing loaded: it's like right when the whole jerome power thing happened, that all of a sudden youtube was pinwheeling, and so was the federal reserve. Okay, there we go all right, so jerome powell will be talking about seven minutes, excited about that. Hmm watching bitcoin move nicely here did crossover 44 000 did pull back slightly, got ethereum push to 30 or 3800 and aydah. Look at that 225.

Let's go, let's go! That's awesome! That's really good! Oh! That's! Fun! All right! Okay, cool! So now, let's take a peek at the terminal. I want to see what uh the folks on wall street are saying about this: let's go to them live all right. Here we go so we've got. Fomc statement is out here.

The salient points, dot plot scans, a bit hawkish, perhaps yeah - that's kind of what we were thinking too, is really that uh, it's it seems like people have moved up at the fed to raising rates sooner. This is what they did in 2018 and it wasn't good. The the market had a freak out when uh, when rates actually started going up. That was a much more uh impactful outcome than uh than really just the paper talk, although you did have the taper tantrum back in 2013, so uh, typically the more the fed projects, the less the market is willing to follow soon: uh, okay, dot plot.

We got two members shifting their dot, leaving us with a half a hike median. There was a considerable movement. The median shifted up to one percent of 2023, a lot of dispersion in 2024 median at 1.75, but a mode or frequency here of 2.125, which is even higher than that 1.75. Seven members think by 2024 we still need to be at 1.125.

It's actually not increasing. So really a scattering is, is what bloomberg here is observing in the dot plot, which in fairness, you see that here? If you actually look at the dot plot uh, we looked at 22 here and we looked at 23 and you can see this beautiful sort of clustering happening here around really one rate increase. You've got a good median over here about increasing to about one percent, but it's harder to identify the median here, statistically your median's here, but you have most members voting for a rate increase right around here. So that's interesting: okay, median dots for the next few years.

Okay, i talked about this. Let's see what else do we have okay, scrolling down? Okay, we have gold pushes higher, as dollar falls on fed statement. Yeah gold pushed up nicely here. The metal climbed point five point: five percent to 1784 per ounce short of that 1800 level.

Whiplash hits the foreign exchange markets. The euro sets new highs in the minutes after the statement hit, showing traders saw it as both dovish or hawkish. In the initial minutes. Oh yeah, you had this crazy bounce.

I saw that in the s p 500. um dollar now at session lows: okay, yeah, because if the fed keeps buying no that's right that he's buying. That should put that would put prices up and yields down. That makes sense.

So the dollar would weaken that that makes sense the dollar initially climbed, but has now weakened, because the fed's still going to be printing money, which also makes intuitive sense yeah. This is, i mean, look. I don't think any of us expected bad news from the fed. Uh, i look.

I i expected more bad news before this fed meeting. I thought yesterday and like maybe this morning would be worse, but this this was expected. We knew they weren't going to taper. I think there's a little bit of bearishness in the tone of raising rates sooner, but i think that's so far out.

Nobody really cares right now: uh ada, just bounced to 225, really good uh. I did a nice trade on my crypto. I uh. I sold a bunch of crypto a couple days ago, just like in the middle of the night too, which i still send alerts to everybody in stocks and psychology money, no matter what time.

It is sorry if i woke anybody, but anyway uh i sold. I sold all my crypto and now i'm by buying it back and lowering my cost basis, which has been great but anyway, uh sofa is also moving nicely here. Eleven point: three: four percent: let's just look at the broader market and see how things are moving here uh, so i just did a yolo on honey mining. We talked about that uh.

This is the day chart for huddate mining and uh. This is really, as crypto has been falling, you had a bond offering crypto has been falling because of the the offering now we're kind of hitting that dip. Uh and we've got some nice growth here after the minutes came out. You can see this is.

This is really just the reaction i mean this morning. We had a nice gain here on hud 8, but then you have this reaction over here. After the minutes came out, you've got sofi up 11.27 on the day: amazing uh hud, 8. 225.

There hood 6.41 trade desk 4.87 nice on trade desk, here's bitcoin trying to get to that 44 000 level; uh pallet, here back up about four percent, good good, good good. Looking towards the downside here, we've got uh peloton still sitting down about seven point. Five three percent did close my piton holding but uh, but i do have to say it close out a while ago, but i do have to say i was really tempted to pick up. Some soul puts on this one jerome powell's gon na be talking in a moment.

So we got about one minute to go before jay bao comes out to talk to us yeah what else yeah, otherwise the market it seems relatively stable. Let's see, for example, tesla how's. It uh here's the release of the minutes. Tesla's actually moved up about half percent on this news and the s p 500 has moved up roughly half percent on this news as well.

Any thoughts on u.s steel x, they've done very well as uh. My my memory of them, but i'm not a commodities expert, i always say so - uh, okay, one minute to go. It's exciting, mm-hmm, yeah, yep, yep, yep uh did i ever get up to uh hood. Put i don't have a you mean a soul.

Put. Let me see, i closed a bunch of robin hood options. Uh the day uh here we go here see this is my uh. My weebs and my tesla options are just crying right now, but that's okay.

Where is robin hood? See here's my firm there's, the amc! It's amc stock down about 13. Where is is my hold on? Is it my robin hood hold on a sec? Give me a second here: where is? Is it in robin hood or here robin hood etsy goo kip? I don't know if i did my robin hood here or there. Let me see hood. No, it's still up it's right here.

Look um, put it back in here hood. So there you go see. This is the put. This is the october 15, 42 put and uh.

This thing is up 46 percent, so i think that's the one you're referring to oh ger, j pal, let's go monetary policy will continue to support the economy until the recovery is complete progress on vaccinations and unprecedented fiscal policy actions. This is him, of course, reading the statement. Support to the recovery indicators of economic activity and employment have continued to strengthen real gdp rose at a robust 6.4 pace in the first half of the year, and growth is widely expected to continue at a strong pace in the second half sectors, most adversely affected by The pandemic have improved in recent months, but the rise in coven 19 cases has slowed. Their recovery household spending rose at an especially rapid pace over the first half of the year, but flattened out in july and august as spending softened in covid sensitive sectors such as travel and restaurants.

Additionally, in some industries, near-term supply constraints are restraining activity. These constraints are particularly acute in the motor vehicle industry, where the worldwide shortage of semiconductors has sharply curtailed production, partly reflecting the effects of the virus and supply constraints. Forecasts from fomc participants for economic growth this year have been revised somewhat lower since our june summary of economic projections, but participants still foresee rapid growth as with overall economic activity. Conditions in the labor market have continued to improve demand for labor is very strong and job gains averaged 750, 000 per month over the past three months in august, however, job gains slowed markedly with the slowdown concentrated in sectors most sensitive to the pandemic, including leisure and Hospitality, the unemployment rate was 5.2 percent in august, and this figure understates the shortfall in employment, particularly as participation in the labor market, has not moved up from the low rates that have prevailed for most of the past year.

Factors related to the pandemic, such as caregiving needs and ongoing fears of the virus appear to be weighing on employment growth. These factors should diminish with progress on containing the virus leading to more rapid gains in employment. Looking ahead, fomc participants project the labor market to continue to improve with the median projection for the unemployment rate standing at 4.8 at the end of this year and 3.5 percent in 2023 and 24.. The economic downturn has not fallen equally on all americans and those least able to shoulder the burden have been hardest hit, in particular, despite progress, joblessness continues to fall disproportionately on lower wage workers in the service sector and on african americans and hispanics.

Inflation is elevated and will likely remain so in coming months before moderating as the economy continues to reopen and spending rebounds. We are seeing upward pressure on prices, particularly because supply bottlenecks in some sectors have limited how quickly production can respond in the near term. These bottleneck effects have been larger and longer lasting than anticipated, leading to upward revisions to participants inflation projections for this year yup. While these supply effects are prominent for now, they will abate and as they do, inflation is expected to drop back toward our longer run goal.

The median inflation projection from fomc participants falls from 4.2 this year to 2.2 percent next year. The process of reopening the economy is unprecedented, as was the shutdown at the onset of the pandemic. As the reopening continues, bottlenecks, hiring difficulties and other constraints could again prove to be greater and longer lasting than anticipated, posing upside risks to inflation. Our framework for monetary policy emphasizes the importance of having well anchored inflation expectations both to foster price stability and to enhance our ability to promote our broad-based and inclusive maximum employment goal.

Indicators of longer-term inflation expectations appear broadly consistent with our longer-run inflation goal of two percent. If sustained higher inflation were to become a serious concern, we would certainly respond and use our tools to assure that inflation runs at levels that are consistent with our goal. The path of the economy continues to depend on the course of the virus and risks to the economic outlook remain. The delta variant has led to significant increases in covet 19 cases, resulting in significant hardship and loss and slowing the economic recovery.

Continued progress on vaccinations would help contain the virus and support a return to more normal economic conditions. The fed's policy actions have been guided by our mandate to promote maximum employment and stable prices for the american people, along with our responsibilities to promote the stability of the financial system. Our asset purchases have been a critical tool. They helped preserve financial stability and market functioning early in the pandemic and since then have helped foster accommodated financial conditions to support the economy.

At our meeting that concluded earlier today, the committee continued to discuss the progress made toward our goals. Since the committee adopted its asset purchase guidance last december december, since then, the economy has made progress toward these goals. If progress continues broadly, as expected, the committee judges that a moderation in the pace of asset purchases may soon be warranted. We also discussed the appropriate pace of tapering asset purchases once economic conditions satisfy the criterion laid out in the committee's guidance, while no decisions were made.

Participants generally view that so long as the recovery remains on track a gradual tapering process. That concludes around the middle of next year is likely to be appropriate. That's a big one. Even after our balance sheet stops expanding our elevated holdings of longer term securities will continue to support accommodative things about six to eight months paper.

The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff, for which we have articulated a different and substantially more stringent test. We continue to expect that it will be appropriate to maintain the current zero to one quarter percent target range for the federal funds rate until labor market conditions have reached levels consistent with the committee's assessment of maximum employment and inflation has risen to two percent and is On track to moderately exceed two percent: for some time, half of fmc participants forecast that these favorable economic conditions will be fulfilled by the end of next year. The result, the median projection for the appropriate level of the federal funds rate lies slightly above the effective lower bound in 2022. Participants generally expect a gradual pace of policy firming that would leave the level of the federal funds rate below estimates of its longer run level through 2024..

Of course, these projections do not represent a committee decision or plan, and no one knows with any certainty where the economy will be a year or more from now, more important than any forecast is the fact that policy will remain accommodative until we have achieved our maximum Employment and price stability goals. 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 support the economy for as long as it takes to complete the recovery.

Thank you and i look forward to your questions all right, uh. Just a quick note, the big takeaway there was concluding the tape for the middle of next year. That was the big takeaway we're going to get to questions now. This is big when it comes to the taper and eventually to any rate increases.

I'm wondering if you can walk us through what substantial further progress looks like given the latest batch of productions that have pce inflation coming in a little higher than the june projection, the unemployment rate also being higher than june, as well as the uh change to gdp. Lower than june, if you could help us make sense of all those things as you um sort through what substantial for the progress looks like. That would be great sure. So so the the test for um beginning our tapers, that we've achieved substantial for further progress toward our goals of inflation and maximum employment and for inflation crypto's falling a bit right now on this achieved more than significant progress, uh substantial further progress, so that that part Of the test is, is uh is achieved, in my view and in the view of many others, so the question is really on the maximum employment test.

So if you look at a good number of indicators, you will see that since last december, when we articulated the test and the readings today in many cases more than half of the distance, for example between the unemployment rate, unemployment rate in december of 2020 and typical Estimates of the natural rate, 50 or 60 percent of that road has been traveled, so that's uh that could be substantial further progress and many on the committee feel that the substantial further progress test uh for employment has been met. Others feel that uh that it's close, they want to see a little more progress. There's there's a range of perspectives. I guess my own view would be that the test, the substantial further progress test for employment is all but met, and so once we've met those two tests once once the committee decides that they've met and that could come as soon as the next meeting uh.

That's the purpose of that language is to put notice out that that that could come as soon as the next meeting it's november. Fourth committee will consider uh that test and we'll also look at the broader environment at that time and make a decision uh whether to taper. Thank you we'll go to howard schneider uh thanks uh, chair pal thanks michelle. So looking at the steps we have now uh.

Basically, four years of inflation above target and policy never gets to the long run rate um, i'm wondering if you could address that from two perspectives: uh one uh within the new framework that the fed adopted last year, uh and second from the perspective of uh, the Average household that's now, uh being asked to uh pay higher prices and increasingly higher prices for four years running uh was for some this year. Our real wages have actually gone down sure so um as you can see, the the inflation forecasts have moved up a bit in the out years. Uh - and that's really, i think, a reflection of and they've moved up significantly for this year and that's, i think, a reflection crypto's falling on this look at this. It's not good for yolo that we're seeing in the economy have really not begun to abate in a meaningful way.

Yet so those seem to be going to be with us at least for a few more months and perhaps into next year. So that suggests that inflation stop talking jerome, i never either. I guess the uh inflation rates for uh for next year and 2023 were also marked up, but just by a couple of tents um why those are very modest over look at that s p down too 2.1. You know uh two years and two years and three years out.

These are very very. I don't think that that that households are going to uh. You know notice a couple of tenths of an overshoot that just happens to be people's forecasts um. You know we want wan na, we wan na foster a strong labor market and we wan na foster inflation averaging two percent over time and i think we're very much on track to achieve those things in terms of the framework i see this is very consistent with The framework um uh, we want inflation expectations to be anchored at around two percent uh.

We want we're we're um that that's really the ultimate uh test of whether we're getting this done under the framework and um. You know we do want inflation to run moderately above two percent um. I wouldn't put - i wouldn't put too much on a couple of tenths over over uh two percent in 2023 and 24, one one tenth and four, but uh you're right. Those are the numbers.

Thank you: let's go to colby smith, a trip powell uh. Thank you. Michelle chair powell, you mentioned ongoing discussions about the tapering timeline and i'm wondering what the contours of that debate have been for those that want to move a bit more quickly. Is it about maintaining optionality for a 2022 interest rate increase, or is it about financial stability risks or concerns about the efficacy of asset purchases? At a time when we have supply constraints? Thank you.

So let me say that that there's very broad support on the committee for this plan, both as to the timing and as to the pace of the taper. So this was a unanimous vote today and i'd say quite quite broad support for for this approach unanimously. You're correct that that there are some who would prefer to have gone sooner. Uh and they've made their arguments publicly some for some of them.

It's a financial stability concern uh and for others it's it's other other concerns they can make their own uh make their own arguments. This is a this is an approach that the committee will broadly support, and it will. It will put us having completed our taper sometime around the middle of next year, which seems appropriate um. You know the uh asset purchases, as i mentioned, were very very important at the in the early stages of the crisis.

They they were essential in restoring market function. In the treasury and other markets, then, as the as the recovery got going, they supported aggregate demand, as they will do and now we're in a situation where, where um, they still have a use, but it's time for us to begin to taper them their uses. Usefulness is much less as a tool than it was at the very beginning, yeah and, of course, this leaves the whole question of rate increases ahead, which is really where the the framework that the framework is all about, how we, how we deal with rate increases, uh And that sort of thing, so that's so the appropriate way to go and he's calling bond purchases a lot less useful. So now s p is following again thank you.

We'll go to nick stop talking hi nick tim ross of the wall street journal, uh, chair powell. You have said the test for liftoff is more stringent than the test for tapering, but if the near term projections today are credible, more of your colleagues seem to think that uh rate liftoff and not just a taper, may be closer at hand. Does the committee have a different opinion than than you do about the threshold he's scratching the market that you've articulated or do they believe that either inflation or economic growth will necessitate a rate increase sooner than you do well so again, substantial further progress toward our goals Is is the test for beginning the taper? The paper takes some months and everyone's figuring so you're going to be well away from uh from satisfying the liftoff test when when, when we begin the taper, so in terms of the liftoff test, though uh you know it is it's what we adopted last september, it's It's uh labor market conditions, consistent with maximum employment, and while we, while we have uh interesting signs that in many ways the labor market's very tight, we also have lots of slack in the labor market and we think that that those imbalances will sort themselves out inflation. At two percent and on track to to achieve at moderately higher inflation over two percent, you know that really depends on the path of inflation.

If inflation remains higher uh during the course of of 2022, then we may already have met that test by the time we reach liftoff. So i just think if you look at if you look at what people are writing down for year and 2022 numbers, some people are writing down very low unemployment rates and that's only one indicator, but it suggests a very strong labor market and i think they're writing Down in good faith, what they see as meeting the test, uh there's a range of perspectives about where the economy will be but um by the way all, but one participants have us lifting off during 2023. So it's not! It's not really an unusually wide array of views about this lifting off by the way refers to interest rates going up. You know like the rocket ship and he's right.

You can see right here all all, but one oops see uh see rates going up uh until 2024.. Were you aware of the kind of security buying and selling that presidents, kaplan and rosengren were participating in last year, and i wonder if you thought that was appropriate. This is a boring question, so no, i was not aware of the specifics of of what they were doing uh. So let me just say a couple things about this subject.

We understand very well that the trust of the american people is essential for us to effectively carry out our mission and that's why i directed uh the fed to begin a comprehensive review of the ethics rules around permissible financial holdings in activity by fed officials. So those rules are in in many respects the same as those for government agencies plus uh, a number of things that apply specifically to us because of our business. One of those is sort of three things i would point to in terms of specific restrictions. One is ownership of certain assets is not allowed and that's bank securities and other things.

Secondly, there are times when we're not allowed to trade at all or to you know, buy and sell financial assets, and that's the period immediately before during an foc meeting and third there's regular disclosure. So all of these everyone's you know, ownership and and activities - are all disclosed on an annual basis. So you know i would have had to go back and read people's financial disclosures to know what their activities have been. This has been our framework for for a long time and i guess you'd say it served us well, the other thing you would say that it is now clearly seen as not adequate to the task of of uh of really sustaining the public's trust.

You know so we need to make changes and we're going to do that. As a consequence of this, this will be a thorough, going and uh comprehensive review. We're gon na gather all the facts, um and and look at ways to further tighten our rules and uh and standards bitcoin, don't like it bitcoin, don't like it at all. Thank you, uh.

Thank you, mr chairman. I always want to follow up on gene's question rocket. Um landing the issue of uh ownership of these stocks and trades uh. Do you think it's appropriate for federal reserve officials to be owning the same assets that the federal reserve is buying? Is that one of the modifications that you're looking at and in that these you said yourself, they don't clearly not seem as appropriate in that the fed's code of conduct says fed officials should avoid even the appearance of the uh of conflict.

Uh do those trades. In fact and holdings violate the fed's code of conduct. Finally, you have a timeline as to when you might get done with your review. Thank you, sir.

Don't have a timeline, yet we can start with that um, so um. Well, let me let me address the muni question since that's that's uh, that's in there um, you know i i personally own beautiful municipal securities for many many years and in 2019 i i froze that meaning i i they're. No, i'm holding all the securities. My my wife and i to maturity and uh munis were always thought to be a pretty safe place for for a fed person to invest because, as you as you know, the lure was that the fed would never buy municipal securities.

So it was not an uncommon thing and so then comes the the you know the covid crisis and i reverse that policy and i did it without hesitating, and the reason was that that the financial markets and including the municipal financial market were very much on the Verge of collapse - and it was time to go and we did, but we also checked with the office of government ethics and who looked carefully at it and said that i didn't have a conflict. So that's that's one answer that i wanted to share with you. Secondly, yes you're right, though, as a we're going to be looking at all those things. I really i don't want to get ahead of the uh.

The process here and speculate about particular outcomes, but this again comprehensive and deliberate process we're going to make changes. I want to be able to look back on this years from now and and know that we rose to meet this challenge and handle the situation well and what we did made a lot of sense and and and uh protected, the public's interest and the institution that We're all yawn, sorry, i'm sorry like them talking about the epic stuff, it's important! I get it. I just think they should have immediate disclosure if you're gon na trade stuff disclose it instantly. That's what i do in stocks and psychology money, that's what they should do.

As politicians i mean it was a real coincidence. I happened to pre-own these munis. They were, they were bought many years ago actually, but see now we're wasting time. Talking about this, we should be talking about that taper.

It was really not a it. Just was an unforeseen event and i couldn't sell them so so what i did was i just held them, checked with the ethics people and went ahead so, but it's a general principle yeah. That makes a lot of sense. Thank you.

Thank you. We'll go to christopher gaber. Thank you. Thank you.

Thank you. Uh chair powell um. Well, i had a question about uh jobs and the fed's schedule is the fed's uh policy framework of you laid out here. Um, you and other fed officials have often talked about expecting a job market pickup in september uh as more children return to school, freeing up more parents to work cova debating you mentioned in the past.

The extra unemployment benefits expiring, there's some real real-time data, suggesting uh that we may not be seeing much of a return of labor supply. So do you still expect to see that in the next couple of jobs reports and how would a relatively weak jobs report in september affect your plans? Thank you so you're right, we have a really i'll call it a unique situation where, by many measures, the labor market is tight and 11 11 million job openings. Very widespread reports from employers all over the economy, saying it's quite difficult to hire people uh wages. Moving up and that got so quite a tight type, labor market.

So our view, i think, widespread view a few months ago, was that several things were coming together in the fall, including kids back to school, which would you know, which would lighten caregiving duties, including the exploration of uh unemployment, extra unemployment benefits, um and other things would Would come together to provide an increase in labor supply, and so we get out of this strange world where there are lots of unemployed people in a high unemployment rate, but a labor shortage. And so what happened was delta happened? And you you have this look at gold ran leveled crashed. This is called jerome powell talking when schools are open 60 of the time or when they're always at a threat of being closed because of delta, the delta variant. You know you might want to wait rather than going ahead and taking a job and starting work only to have to quit it three weeks later you're going to wait until you're.

Confident of that, so some of that may not have happened. Also, people - people didn't you know, as you know, hiring and spending in um in these face-to-face service, industries, travel and leisure. It just kind of stopped uh during during those nights. So we so that that really the big shortfall in labor in jobs was was largely in travel and leisure, and that's because he said the big shortly because of delta.

So so that all happened, and so what we we know is it didn't happen. I think there's still it may just be that it's going to take more time, but it still seems that that that inexorably people will these are people who were largely working back in february of 2020 they'll get back to work when, when it's time to do that, It just may take longer time, you're right though it didn't happen with any uh any force in september, and a lot of that was was delta um in terms of the uh that you you asked also about the test for november. I think if, if the economy uh continues to uh progress broadly in line with expectations, then i think, uh and and and also the overall situation, is appropriate for this. Then i think we we could easily move ahead at the the next meeting or not, depending on on uh, on whether we, whether we feel like that those tests are met.

Well, if i just quickly follow up, i mean what, how much of that will depend on what kind of jobs report we get for september, and i mean is it you know? Are you in a data dependent phase here where you need to see certain numbers going ahead, or are we at a point where you've accumulated enough progress that so you it's it is it's accumulated progress, so you know for me it wouldn't take a knockout great super. Strong employment report, it would take a reasonably good employment report for me to feel like that test is met and others on the committee. Many many on the committee feel that the test is already met. Others want to see more more progress and you know we'll work.

It out uh as as we go, but i i would say that in my own thinking the test is all but met. So i don't. I don't personally need to see a very strong employment report, but i'd like to see a good, a decent employment report um. I mean it's: it's not um, it's again, it's not to be confused with with the test for liftoff, which is so much higher great.

Thank you hey. Thank you. We'll go to victoria guida hi chair powell um. So i wanted to ask about the vice chair of supervision position, and just i was wondering if you could speak about how you view that role and the extent to which you defer to that person on regulatory policy and then just sort of a related question.

As you know, randy quarles vice chairmanship ends next month, and i was wondering, if he's going, to retain the supervisory portfolio until he's replaced in that role. Sure so dodd-frank created this position. Vice chair for supervision and it's it's there's actually a specific assignment. In the dodd-frank frank language, as i'm sure you know and effectively, what it means is that the vice chair for supervision is charged with with setting the regulatory agenda, and you know it's a specific grant of authority and uh in the ten years.

Almost that i've been at the fed that person has really done that uh dan tarula certainly did it and and uh christchurch quarrels. Did it as well, and i i would you know i i think i respect that authority. I respect that. That's the person who bitcoin continues to fall and i believe the spy yep spy's also been trending in that direction.

To look at for for a new person to come in and and look at the current state of regulation and supervision and and uh suggest appropriate changes, and, and i welcome that um in terms of uh vice chair coral's term.