Hey everyone meet kevin here coming to you from a hotel lobby, we're going to be able to stream j-pal from here. But we've got a big moment because we're waiting to see what the heck j-pal is going to release we're going to pull up the notes. We're going to go through all of them together. I'm excited i'm a little uncertain as to what's going to happen, but personally, i'm expecting a 75 basis.

Point hike. That means our upper bound is going to be 1.75 and our lower bound is going to be 1.5. That is going to be above the estimate. Uh.

The current survey is, for a 50 basis, point hike uh. If we get anything more than that, it'd be a little bit of a shocker. The federal reserve yesterday did give us a heads up via the wall street journal that uh we're probably gon na get 75. So we'll see what happens.

I'm if i look nervous it's mostly because i'm sitting in a hotel lobby - and i don't want to get kicked out my microphone - my handheld microphone apparently doesn't work when i just plug it into my laptop. So i'm kind of fingers crossed that the audio is going to be okay, but you know what we got. The fingers crossed we've got 60 seconds to go. The market is expecting with a 98 certainty that we are going to get 75 basis points right now.

I'm very excited to see how the market's going to be reacting as well. It's going to be fun. This is going to be a big moment, so we'll see what happens. I do have the bloomberg terminal up, so we'll be able to get all of the data that we need right away, but i'll also be going straight to the fed dock.

We've got the nasdaq. Actually, rising right now, 1.85 percent to the upside, we're above that 280 level, uh kind of been sitting at that 180.. Okay, some of you say audio, is good. Thank you for that.

I appreciate the um. What's it called the affirmation? I need that right now, anyway, 40 seconds to go uh until the decision comes through. I've got the computer set to give me that decision instantly uh, rather than having to like dig through a piece of paper for it or whatever so staring right at it. I'm very excited.

Okay, again, the expectation is 1.25 on the lower bound, which would be a 50 hike, but where the market is expecting, that was the survey. The market is expecting 0.75, which would be a lower bound 1.5. Here we go 10 seconds away. Here we go markets, rising qqq is up two percent right now, 1.5, we got 75., we got a 75 basis, point hike.

This is uh what the market was expecting. Qq now dropping qqq just dropped half of a percent. After that happened, we want to see the dot plot. Next, the dot font is going to be really really important.

I'm going to go ahead and share the screen as soon as i have that dot plot, we don't even actually have the document uh on their press release website yet, but this is coming through here. Looking for their dot plot right now see, okay fed sees rates at 3.4 percent at the end of 2022.. Oh my gosh there. It is uh markets actually going up now, qqq up to 2.5 uh.

We have the 3.4 terminal rate for 2022 3.8. For the end of 2023, back down to 3.4 at the end of 2024., they they are now pricing in a u-turn they're showing us. The u-turn 75 basis points as expected, uh strongly committed to returning inflation to two percent. We had one person descent and this person is deemed to be a hawk uh kansas city, george dissents, in favor of a 50 basis, point hike, but everybody else went for 75..

Nasdaq is really uncertain here in terms of what to make of this nasdaq sitting at about 1.8 right now, uh policy rate forecast now 3.4. This is a huge jump from that 1.9 that we had on the summary of economic projections. The federal reserve's website just crashed by the way biggest increase since 1994. The range uh, let's see here is now 1.5 to 1.75.

That's a 75 basis, point height new dot blot. We just talked about uh. They added a line saying they're strongly committed to returning inflation to the two percent objective and removing the prior language that they expect inflation to return to two percent and the labor market to remain strong. So they do expect labor market softness employment projections showed a much bumpier soft shock soft landing than expected, with the unemployment rate rising from 3.7.

At the end of 2022 to 4.1, in 2024, growth forecasts were cut to 1.7 percent, not as close to that 0. As i was expecting, but they still don't see a recession 1.7 in 2022 and 2023, that's down from 2.8 fed officials expect inflation to come down significantly in 2023, no expectations of a recession nasdaq still holding on to about 1.9 percent. Here, treasury uh two-year treasury falls to three point: three percent. Let me see the uh ten-year treasury is sitting at three point: four one percent so still elevated, but down on the day, uh again, nasdaq still bouncing around 1.7.

Here i want to get the summary of economic projections up for you all here, but their website is kabut, so i'm reading it from a different area. Projections got them all right here we go. You ready folks we're gon na get these projections off, because it's a big deal. Okay, share, share, share, share, screen, share, chrome, temp projections, all right here we go.

Are you ready for this folks? Let's do this together? Okay, so this is a big deal right here. This chart right here - okay, look at this here, so this is the change in real gdp. The projection uh. The old projection is right here they dropped it from 2.8 to 1.7.

Honestly, i think that's still optimistic. This should be closer to zero nasdaq down now to uh just up one point: five percent, so some red candle sticks there uh we've got the projection going forward. Sticking to one point: seven percent sticking to one point: nine percent here in 2024 longer run 1.8. Okay, unemployment rate look at that move in the unemployment rate right here going to 3.7 at the end of this year.

That would be up from that 3.5, where we sit now we're also seeing a 3.9 percent expected. That's a rise there to 2023 and then uh 4.1 over in 2024. That's a big move there. It's obviously not terrible, but it's clear that not only do they expect the jolts numbers to change to where we'll have less job openings, but they do actually expect we're going to see the unemployment rate move up above that longer term expectation of 4.

Then inflation look at that decline, they're expecting an inflation here. They first told us 4.3 at the end of 2022, but they're now going for 5.2 at the end of 2022. uh nasdaq. Now up only about one percent.

We've got uh 2.6 here for 2023. I want to see the ranges. These ranges are honestly pretty tight. Look at that 1.5 to 1.9 on gdp unemployment, 3.6 to 3.8, inflation 5 to 5.3 they're, pretty well in line with each other's expectations.

Look at this range right here, 3.4 for 2022. There's that three eight there's that three four look at that range, though here much higher terminal rate now the market had actually started pricing in the potential for a four percent terminal rate, which i thought was very interesting. Of course, there's a fly here. This is so annoying uh, but anyway the market was starting to price in a four percent terminal rate and the fed is not protecting that uh, which is very, very good to see.

Let's see here, okay, what else do we have? I want to see a little bit more uh what the fed has to say. So let me pull up the fed doc one more time. I'm sorry the uh, the suits okay, so new wording strongly committed. Okay, that's not news! We already knew that it's telling that they deleted okay, so the suits on wall street are saying it's telling that they deleted the line that inflation should go back to two percent and labor markets should return strong or should remain strong, so they deleted that little segment Right there, that's the big deal that they keep referring to.

I will go ahead and pull that up one. Second, i want you to see where that is so. We go to this okay here. So now, we're gon na share dab.

It's a little slower here compared to having a switcher, but that's okay. So i want you to see this statement right here. Right here see this here. The committee is strongly committed to returning inflation to its two percent objective and that the labor market will remain strong.

We'd actually have a complete removal about the labor market remaining strong here uh. The only time labor is mentioned here is that we'll take into account labor conditions. Nasdaq is now falling a little bit more heavily down about point eight percent. I don't necessarily see anything dirty in this so far we're going to go through the table and dot plot in just a moment.

I think that what do we have here? Lower growth projections from the sap are already visible in the data atlanta fed's gdp now model dropped significantly after retail sales data. Earlier earlier we had a miss. We had a contraction on retail sales data. It has come down rapidly from 2.5 since the middle of may.

That's right: we had a negative 1.3 percent or negative 0.3 and also a revision downward from last month's retail sales. This is no surprise. As we've seen, retail mobility data plummet the uh 3.4 median forecast for the year. End policy is about 175 basis points of more hiking needed by the end of the year.

Okay, that's actually a big deal that could potentially be what we're. Why we're seeing a little bit of drama here? So let me show you uh how this would look okay, so what we're gon na do? Is i'm gon na pull up a quick spreadsheet here, and i want you to see how you can do this yourself? Remember i'm a big fan of teaching you how to fish, rather than just giving you a fish right all right, so look how easy this can be so january. We got a zero hike right march. We got a 25 basis.

Point height. You go over here insert some boom simple right, okay, this is going to be the lower bound of the fomc rate and guess what i can do watch this upper bound. Fomc range. I can take insert formula.

Add 25 basis points. That's because this is always going to be a range now we're going to clean up the cell a little bit make this a percentage. A couple: decimals uh, that's going to be too complicated. Let's make it a number we'll give it a number, since we're going to go with basis points, but two decimals, okay good.

So what did we get in may in may? We got our first 50 right. There we go in june. We just got uh 75. So this is where we sit right now right and the federal reserve told us in march that end 2022 would equal 1.9, okay, but now they're telling us in june that the end of 2022 is going to equal 3.4 right.

So we have to get this range to equal 3.4 watch this july september november december. So let's go with 75.5 0.5.5. That's too high see that's too high, so we can actually probably go 0.5 here still too high 1.25. There you go this.

This is a potential forecast for the next meetings right here. This is today's meeting right here, but this shows you how they might be able to achieve that sort of terminal rate right. It gives you a little bit of an idea uh, it does look like uh yeah, yeah, no kidding uh, so so jolly makes a good point here that uh you know. Last uh, you know fomc meeting the 75 basis.

Point hike was off the table and here they come in with 75 basis points. This is true, but everything changed after that last cpi report and and i'll tell you, the bigger one, isn't so much that the last cpi report came in bag, bad, it's actually that dude come on man, i'm doing a live stream over here. It's actually that the uh consumer estimates for inflation came in higher. Now, let me show you the current five-year break, even let's pull that up, because that's the market's expectation for inflation when consumers start expecting more inflation, especially ahead of a large cpi print like that.

Really bad: we don't want that okay, but this is actually good. The market's expectations for inflation, very, very restrained, uh. Let me pull that up. Okay, stand by all right, stop sharing sheriff's hearing our friend render screenshot there.

You go see this on the right side over here. I want you to really pay attention to this segment right here. That's right here, this 2.96. This is the five-year break-even inflation rate, and this is really really important uh, because we do not want to see this skyrocket like it did when war began over here right.

We want to keep this anchored low. Ideally, if we can just get below this box over here or quite frankly, if we can get below this box and stay below there, it's really good and it's a sign that the bond market's thinking, okay, the fed's, doing the right thing here - nasdaq right now, stabilizing A little bit sitting around point two percent: it definitely did fall after uh the the report, but uh. Let's go now through a little bit more of the dot plot. Jerome powell will be speaking in about 18 minutes and we'll be covering jerome powell speaking as well.

I'll probably mute my audio uh and then we'll just be listening to jerome powell and if i need to chime in obviously i can do that. Okay, so right now we need to go back to the dot plot all right. This is our dot plot here right. So, let's go back in over here by the way.

I think this is the perfect opportunity to mention that the sponsor for today's video is actually stream yard. They're letting me do all of this on the go here. So thank you to streamyard, including share audio from jerome powell's uh press conference when that time comes so check out, metkevin.com streamyard, to learn more about professional broadcasting, software really really good. I mean this is a game changer that i could do this with just a laptop honestly.

This is really good. No stream switch or anything uh, okay, so uh, let's, which means your cost to set this up, is like nothing all right. Everybody needs to chill down. Okay, all right, so let's go through this together here all right.

What do we got over here? So this is the change in real gdp. This just shows you the median projection right here, the blue, so the red line is the projection. The blue line is the range of estimates. So remember you have multiple people on the board, so you get a range of estimates.

Unemployment rate moving up here, uh, especially in 2023 and 2024. This is the inflation rate. Look at that curve that they're projecting for inflation. So they're actually suggesting that inflation's really going to peak here in 2022.

We don't know what month. We really think it's probably going to be something like september, uh or july before we actually see some kind of peak, but they do say we're going to see the peak in 2022. we'll see if they're right, obviously and then some kind of uh. You know what looks like almost like this: this decline down.

I can't think of it here, like a logarithmic decline down where we approach zero, but rather than zero. It's two okay good! So, let's see if we have anything else juicing here, these are the midpoint target ranges for the fed funds rate all right. So let's understand this. So this is about 3.4.

So you could see the median tendency here. You do have one person who's wanting us to get up to about 0.4 and up multiple about five wanting to keep us between three and three point: five, remember with that spreadsheet, we made we i'm gon na, go back to it really, quick, because i think it's Important for you to see it now, so let's go back to that spreadsheet window this! Yes, here we go take a look at the spreadsheet. This right here is the current projection of of the path. Now, it's possible that this right here could be a 0.75, and this could be a 0.25 that would accomplish the same thing.

Some folks are essentially pricing in the need to have a 50 here and a 50 here which would get us closer to that 4 right. So what i would do, if i were you is, i would take a screenshot right now of this here: i'll smile, okay, ready, okay, good! Like save that this, i think this is a very, very good thing for you to remember when it comes to the federal reserve. Okay, dude, hello, all right now we're gon na go back over to share screen and the tables. Remember powell is speaking at 2.

30 powell speaks at 2, 30 p.m. I'm just gon na throw that quickly up boom. There we go all right. So let's keep going here again.

Thank you to stream guard for allowing me to do that: distribution of uh projections and change in real gdp. So these shows oh look at this. Somebody actually thought gdp for 2022 would come in at one percent. Folks, look at that! One percent right there, that's actually pretty shocking that we had somebody coming this low.

I i mean based on where all the others are. Personally, i thought these would have come in much lower like if it were up to me. This would be like one percent. This would be like point five percent and then zero would be over here, and i think the bell curve would be like this, like we would be very close to zero percent, but the fed is telling us over and over again here we don't think we're hitting Recession: okay, fed whatever you say the next, this next thing you know gdp is going to come out we're in a recession we'll be like.

Oh yeah. Oh, it's just a transitory recession. Uh! Okay! Here are the moves in the unemployment rate, and i mean really the move up to about four percent or so not so. Thank you jolly for saying we're not picking up too much in the background.

I appreciate that so uh. It's honestly, this microphone that i'm using right now is just the mac laptop. It's one of the m1 pros uh. So if the audio is great, i'm i'm blown away, but anyway, distribution of participants, projections for pc inflation, okay - this is for 2022 right here.

Right. Look at this. Some one person over here thinks that inflation's gon na still be above six percent by the end of 2022.. That's that's not good right.

This is suggesting uh that uh that you really want uh. I don't think we have august. There's no august meeting hold on somebody's saying: i'm missing august fomc meeting schedule, uh, there's no august, no there's no august, there's no october meeting uh. So thanks for the five dollars but yeah there's there's no august or october uh.

Okay, anyway, the fed only meets eight times per year, so anyway, okay, so interesting that we've got somebody way out here at 6.1. I think, honestly, that might be more realistic, but we'll take the opium from the other folks nasdaq's actually rapidly rising right now, but don't get too excited j-pal's really good at crashing the market, while uh we're talking. Is this the actual fomc report? Yes, this is the actual uh federal open market committee, projection known as the sep, the summary of economic projections. If you want to take a screenshot and you want to favorite another screenshot, this right here is a very important screenshot.

You can refer to this for the next probably eight weeks. I don't think we're gon na get a new one until september, so uh screenshot this, because you're not gon na get a new one of these from the fed until september, all right moving on so then, let's see what else! What do we have over here longer run? This is the longer run projection for inflation, so they actually think they're gon na be able to get personal consumption expenditures down to the two percent range. Fine, okay, longer term projections, there's nothing interesting here. Confidence interval based on historical forecasts, whatever, okay, here we go.

What is this participants asset assessments of uncertainty and risks high, so basically weighted to the downside, so, in other words, the fed together believes that, even though uh we we have these projections, we believe these projections are weighted to the downside. So the risks are to the downside and that gdp could have substantially higher uncertainty all right, and then we have i'm also going to go back to the suits in just a moment to see what else the suits are telling us also like. If you can lately, you know, one of the reasons by the way i haven't been doing as many live streams is because a lot of people have been telling me they've really enjoyed like the detail in like a more concise video. But then i also still get comments from people all the time.

They're like we missed the live streams like i don't get it like i'm trying to provide. So if, if you can, after this video, post or whatever, if you can leave me like a detailed comment down below - and let me know a little bit more about like your thoughts or even a discord - go to medkevin.com chat, you can join the free discord tag. Me at me kevin. I promise i'll check them today.

I really want your feedback. That'd be really helpful for me. Okay, i don't think that there's much else in this document, but remember j-pal, comes up in 11 minutes and i want to see what the suits are saying: forecast, uncertainty, yeah, whatever dudes, all right, i'm going to leave this right here on the sep page and then What we're going to do is we're going to uh i'm going to take a look at what the suits were saying. So i have your break even stable right now at 2.96, which is very good.

We have the bond market sitting at 3.43 for the 10-year treasury. Okay - and we also have a i like it when i do this well - i'm gon na see if i can pop this open a little larger, no okay, i want you to see the changes exactly. They were the way they were made in the uh fomc statement. So we can see it a little bit more clearly so uh cnbc actually has that for us.

Let me make sure there we go all right. Take a look at this all right, so they replaced, although overall, with overall economic activity appears to have picked up after edging down in the first quarter. Okay, that's actually also a really interesting statement that economic activity slowed in the first quarter, potentially because of omicron and now they're, seeing a pickup of economic activity, which is actually a bullish thing and potentially a way of suggesting that omicron was the reason we had a Negative q1 read right, job gains have been robust and unemployment rate has remained low. Okay, the implications for the u.s economy are highly uncertain, so they removed that after ukraine.

Like now, we know what the implications are. They are weighing on global activity, commodity prices and so on. They removed this with appropriate, firming and stance and monetary policy. The committee expects inflation to return to its two percent objective and the labor market to remain strong, see this right here was removed and the labor market to remain strong.

So they do expect that labor market weakness - this is them saying, like people are going to lose their jobs you're going to see more job loss. The fed is literally telling you this just like the fed, literally told you that we are going to make stop stocks drop right. They told us that so uh anyway. This is where you see the 75 basis.

Point hike. In addition, the committee decided to begin will continue reducing its uh holdings of treasuries and mbs mortgage-backed securities good. The committee is strongly committed to okay. They added this as well.

Okay, which is just basically saying they're, committed to uh their whatever two percent target and george was the only person who voted no on the 75 basis, point hike, everybody else: master, hocker, muller, bernard powell, even powell, folks powell went for the 75, you know and he Drives the bus right all right, so let me i'm going to take a peek at what the suits are saying. So what else are the suits and then j-pal is coming up in a few minutes about seven minutes now, all right, so the suit suits all right. Uh esther george's descent is a surprise. She's been regarded as a long-time inflation hawk and has dissented as a hawk in earlier years, but in the past she also emerged to be much more moderate and centrist.

Okay, i mean they're not really saying anything here. Her recent speeches and interviews she's urged the fed to be deliberate and intentional. She may have felt the 75 bp move was not deliberate and intentional. Okay, all right stocks in the same place is where they were before the release.

Uh somebody now one of the suits from guggenheim is suggesting that the numbers the federal reserve is suggesting from the summary of economic projections are quote fantasyland. So let me give you my reaction to this. I i partially agree. Okay, remember what i what i said.

I said that this summary of economic projections should be real, they should grow a freaking pair and they should give us what's really going to happen. They should show us how close we actually are to a recession. They should actually show that an unemployment rate going up to five percent or something, and they should show that inflation is probably not going to go back down to 2.7 next year. I don't know so i kind of agree with this fantasyland argument.

You know this is better. I think this is a more realistic scp, but i think it's still a little fantasy. I kind of agree with that. I don't know if i'd go as far as calling it fantasyland, but i don't they could do better.

No change in the quantitative tightening program by the way that has stayed consistent against expecting to see for inflation by a 5.2 percent by the median projection towards the end of the year and real gdp. Let's see now, that's nothing new bloomberg intelligence. We think the yield curve will invert more similarly to the 1990s experience than during the last two cycles when the 10-2 only inverted modestly, a more aggressive, fed, hiking cycle and slowing economic backdrop should keep a flattening bias in the market for now so expect the yield Curve to be flat, okay, we saw that cut down and economic growth forecasts. We compared the economic statement any of the gains that we saw in the minute prior and minute after the release are pretty much gone right now we only have about one percent there on the qqq still sitting below that 280 level sitting at about 279 right now, Uh looking again at the 10-year treasure, sitting at 3.427, bitcoin sitting at 20, 675 ethereum at 1070..

If you haven't yet watched my video in crypto this morning, you want to understand a little bit more about what's going on with the celsius hack or the hedge fund. Well, not hack the celsius disaster, that's how this lock lockup and the disaster with the hedge funds make sure you watch my video on that. Also, if you have not yet seen my video on uh my experience with ben mala that has been posted, it took us about 30 hours to edit and uh. It has like the least amount of views in any of my videos, the last 10 days.

So i'd appreciate it. If you watched it, it's called ben mala exposed it had a different title, but i changed it all right, so uh. We are now four minutes away from jerome powell's press conference which i'm personally very excited about, because we're going to get to see him respond to questions, and i will give you a live reaction to uh what uh what is said, what is asked so we are Going to prepare that right now and that is going to be prepared with audio, so it could be one second here and then we'll keep going to the suits. My phone see press conference we're gon na hop on over to the car.

There we go. So we are going to make this nice and big here, and this is where we are going to listen to jerome power uh, all right, so that'll be up shortly uh. This is obviously the fed's page here. I hope you appreciate hope you appreciate my commentary.

In addition to when they do their q a and of course, we'll do a recap afterwards as well - excited to see this. Actually, i wonder if i put this over here, if i could just make this full screen. Oh, let's see it full screen fall screen. I did it shout out to streamyard.

Oh that's, pretty cool, that's actually really cool, okay, uh anyway, so uh, one more point from alpha trai, the real fireworks are starting in seven minutes. That's true! That is true. Usually it's it's. The meeting that uh that stirs a lot of panic kevin turn your transparency mode on the maxes.

What does that mean uh these turn on transparency mode? Why would i turn on transparency, moon? I have it on noise, cancelling that uh anyway, qqq bouncing around right now we're sitting around 1.4. Let's go ahead and just i'm going to pull up apple here quickly, apple about four tenths of a percent: 133 we've got tesla sitting up about three point: four percent at about 685 netflix for giggles, seven percent on netflix today, oh my gosh. What happened at netflix you're not getting a little more risk on there eh the subscription services, it's kind of cool uh. You know i've been really looking at the software service businesses too lately, but uh boy we've seen some crush in some of these stocks.

Just looking at the day's chart here we got carvana and tupperware and beyond meet up 12 to 15 to whack at 30 of 12 roku up 10 pinterest snapchat roblox, all up 8 to 10. The advertising play is moving here. Snowflake up six percent interesting yeah. You have jp morgan, responding saying i'm sort of befuddled in the sense that they've ratcheted lower their gdp projections for this year and next and they've increased their unemployment rate projections by four tenths of a percent over 2023.

Yet they're massively increasing how much they're looking to lift rates um, i don't see why that would be befuddling. I think them. Lifting up rates is how they're going to plan to get inflation down, but the consequence of that is gdp and uh going uh down and unemployment going up jp morgan, i don't know. Sometimes some of the people on jp morgan make sense.

Sometimes they just uh jerome might be, ladies riding his bike. No way, man no way he's get you dude drone pedal, i have to say he's always on time, but he's good watch today. He isn't, but no he's usually pretty good. So i uh much much respect for them for uh for being on time all right.

So, let's let me write that down one minute to rome all right, mohammed allerian, the fed has significantly moved higher its interest rate path while also front loading it a lot unusually. It simultaneously revised down growth projections in a notable manner. I don't actually think that's unusual, but okay. The fed meeting in my opinion is often like the the press conference is usually not good for the stock market.

It usually takes the market a little bit of time to digest. What's heard hector, i i looked at my my screen: okay, 75 basis. Point move, props the door wide open for the same magnitude, height uh next and also in uh, canada. Oh here we go.

Okay, good so they're, starting to stream. I'm excited to see this hey. You can look all right one minute to j pal. It is 2 30..

Where is he? Oh? It's so exciting! I don't know i get excited uh-oh there. He is see. I told you he's always on time. Tell me if the audio is okay, please when he starts no, it's not hold on hold on hold on it's probably unmute.

It's on mute, understand the hardship that high inflation is causing we're strongly committed to bringing inflation back down and we're moving expeditiously to do so. 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 and the country have been through a lot over the past two and a half years and have proved resilient. It is essential that we bring inflation down if we were to have a 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 federal open market committee raised its policy interest rate by three-quarters of a percentage point and anticipates that ongoing increases in that rate will be appropriate. In addition, we are continuing the process of significantly reducing the size of our balance sheet, i'll have more to say about today's monetary policy actions.

After briefly, reviewing economic developments overall economic activity edged down in the first quarter as unusually sharp swings in inventories and net exports. More than offset continued strong underlying demand, recent indicators suggest that real gdp growth has picked up this quarter with consumption spending remaining strong. In contrast, growth in business, fixed in investment appears to be slowing and activity in the housing sector looks to be softening in part reflecting higher mortgage rates. The tightening financial conditions that we've seen in recent months should continue to temper growth and help bring demand into better balance with supply.

As shown in our summary of economic projections, fomc participants have marked down their projections for economic activity with the median projection for real gdp growth running below 2 through 2024., the labor market has remained extremely tight with the unemployment rate near a 50-year low job vacancies. At historical highs and wage growth elevated over the past three months, employment rose by an average of 408 000 jobs per month down from the average pace seen earlier in the year, but still robust 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, while labor supply remains subdued with the labor force, participation rate little changed since january. Fomc participants expect supply and demand conditions in the labor market to come into better balance. Easing the upward pressures on wages and prices.

The median projection in the sep for the unemployment rate rises somewhat over the next few years. Moving from 3.7 at the end of this year to 4.1 percent in 2024 levels that are noticeably above the march projections, inflation remains well above our longer run goal of 2 percent. Over the 12 months ending in april total pce prices rose 6.3 percent, excluding the volatile food and energy categories. Core prices rose 4.9 percent in may.

The 12-month change in the consumer price index came in above expectations at 8.6 percent, and the change in the core cpi was 6 percent. Aggregate demand is strong, supply constraints have been larger and long lasting than anticipated and price pressures have spread to a broad range of goods and services. The surge in prices of crude oil and other commodities that resulted from russia's invasion of ukraine is boosting prices for gasoline and food and is creating additional upward pressure on inflation and covet ready covert. Related lockdowns in china are likely to exacerbate supply chain disruptions.

Fomc participants have revised up their projections for inflation this year, particularly for total pce inflation. Given developments in food and energy prices, the median projection is 5.2 percent this year and falls to 2.6 percent next year and 2.2 percent in 2024.. Participants continue to see risks to inflation as weighted to the upside. The fed's monetary policy actions are guided by our mandate to promote maximum employment and price 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 high inflation poses to buy both sides of our mandate and we're strongly committed to returning inflation to our two percent objective. Against the backdrop of the rapidly evolving economic environment. Our policy has been adapting and it will continue to do so.

At today's meeting the committee raised the target range for the federal funds rate by three quarters of a percentage point, resulting in a one and a half percentage point increase in the target range. So far this year the committee reiterated that it anticipates that ongoing increases in the target range will be appropriate and we are continuing the process of significantly reducing the size of our balance sheet, which plays an important role in firming the stance of monetary policy. Coming out of our last meeting in may, there was a broad sense on the committee that a half percentage point increase in the target range should be considered at this meeting if economic and financial conditions evolved in line with expectations, we also stated that we were highly Attentive to inflation risks and that we would be nimble in responding to incoming data and the evolving outlook. Since then, inflation has again surprised to the upside.

Some indicators of inflation expectations have risen and projections for inflation this year have been revised up, notably in response to these developments. The committee decided that a larger increase in the target range was warranted at today's meeting. This continues our approach of expeditiously moving our policy rate up to more normal levels, and it will help ensure that longer term inflation expectations remain well anchored at two percent, as shown in the scp. The median projection for the appropriate level of the federal funds rate is 3.4 percent.

At the end of this year, a percentage point and a half higher than projected in march and 0.9 percentage point above the median estimate of its longer run value. The median projection rises. Further to 3.8 percent at the end of next year and declines to 3.4 percent in 2024, still above the median, longer run value. Of course, these projections do not represent a committee plan or decision, and no one knows with any certainty where the economy will be a year or more from now.

Over coming months, we will be looking for compelling evidence that inflation is moving down consistent with inflation. Returning to two percent, we anticipate that ongoing rate increases will be appropriate. The pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy. Clearly today's 75 basis point increase is an unusually large one, and i do not expect moves of this size to be common from the perspective of today, either a 50, the market level, 75 basis point increase seems most likely at our next meeting.

We will, however, make our decisions meeting by meeting and will continue to communicate our thinking as clearly as we can. Our overarching focus is using our tools to bring inflation back down to our two percent goal and to keep longer-term inflation expectations well anchored. Making appropriate monetary policy in this uncertain environment requires a recognition that the economy often evolves in unexpected ways. Inflation has obviously surprised to the upside over the past year and further surprises could be in store, he seems shaky.

We therefore will need to be nimble in responding to incoming data and the evolving outlook. He seems sad and we will strive to avoid adding uncertainty to what is already an extraordinarily challenging and uncertain time. We are highly attentive to inflation, risk risks and 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, employment and price stability goals. Thank you and i look forward to your questions.

Okay, that was good. That was good. Only 175 is what they're saying schneider with reuters um uh two related questions. Uh chair powell, do you feel you uh boxed yourself in with the language you used at the last press conference on uh 50 aces point hikes in june and july? Apparently, could you please give us uh as detailed a sense you can? Of course, you played uh in reshaping market expectations so quickly on monday, dude friday's cpi in the consumer experience um.

As you know, we we always aim to provide as much clarity as we can about our policy intentions, subject to the inherent uncertainty in the economic outlook, because we think monetary policy is more effective when market participants understand how policy will evolve when they understand our objective Function, our reaction function and, in the current highly unusual circumstances, with inflation. Well, above our goal, we think it's helpful helpful to provide, provide even more clarity than usual um, again subject to uncertainty in the outlook, aka texas and i think, over the course of over the course of this year. Financial uh markets have responded, uh and and have generally shown that they understand the path where we're uh we're laying out it. Of course it remains data dependent um, and so that's what we generally think about guidance and that's why we offer it and of course, when we offered that when i offered that guidance uh at the last meeting, i did say that it was subject to the economy.

Performing about in line with expectations, i also said that if the economy performed, if data came in worse than expected, then we would consider moving even more aggressively. So we got the we got the cpi data and also some data on inflation expectations uh late last week and we thought for a while and we thought well. This is the appropriate thing to do so. Then the question is: what do you do and do you wait six weeks to do it at the next meeting, and i think the answer is that's not where we are with this literally we decided we needed to go ahead, and so we did and uh that's Really, that's really how we made the decision.

The stupid question waste of a question waste the past is in the past, move on bro ask a future question questions gina smiling with the new york times: she's good! You, let's see it. I guess i wonder if you could describe for us a little bit how you're deciding how aggressive you need to be so obviously 75 today, what did 75 achieve that 50 wouldn't have, and why not just go for a full percentage point at some point sure. So if you take a step back, what we're looking for is compelling evidence that inflationary pressures are abating and that inflation is moving back down and we'd like to see that in uh, in the form of a series of declining uh monthly inflation readings. That's what we're! Looking for and by this point uh, we had actually been expecting to see clear signs of at least inflation flattening out and ideally beginning to decline.

We've said that we'd be data dependent, focused on incoming data, highly attentive inflation risks. The things that i mentioned um to howard moments ago, so, contrary to expectations, inflation again surprised to the upside indicators. Some indicators of inflation expectations have risen, uh and projections of this year have moved up, notably, so we thought that strong action was warranted at this meeting and today we delivered that in the form of a 75 basis, point rate hike as i mentioned. So what was the the point of it really? Is this um we've been moving rates up, uh expeditiously to more normal levels and over the course of the seven months since we, since we pivoted and began moving in this direction, we've seen uh financial conditions tighten and appropriately so um, but the federal funds rate, even After this move is at one point, six percent so uh again, the committee uh is moving rates up expeditiously to more normal levels and we came to the view that um we'd like to do a little more front, end loading on that.

So i think that the scp gives you the levels that people think are appropriate at given points in time. This was really about the speed with which you would get there. So, as i mentioned, we 75 basis points today. I said the next meeting could could well be about a decision between 50 and 75.

That would put us at the end of the july meeting you know in in that range of in that more normal range and that's a desirable place to be because you begin to have more optionality there about the speed with which you would proceed going forward. Just just talking about the sdp for a second, what it really says is that committee participants widely would like to see policy at a modestly restricted restrictive level at the end of this year, and that's six months from now, and you know so much data and so Much can happen so remember how highly uncertain this is, but so that is generally a range of three to three and a half percent. That's where people are and that's that's what they want to see, knowing what they know now and understanding that we need to be. We need to show result but also be flexible to incoming data.

As we see it. If things are better, we don't need to do that much it so and if they're not, then we you know either do that much or possibly, but would be very, very independent. Then you're looking at next year and what you're seeing is people see more a bit more tightening in in a range of maybe three and a half to four percent, and that's generally, what people see as the appropriate path for getting inflation under control? No problem. Starting back down and then getting back down to two percent, so 75 basis points seem like the right, the right thing to do at this meeting and um and uh.

That's what we did good suggestion that it could come down. No problem, steve, eastman cnbc. Thank you for taking my question, mr chairman um. You have not used the phrase in a long time.

Monetary policy is in a good place, which is a phrase that you used to use, often um, now that the committee is projecting four percent on a 3.8 percent. Next year, in terms of the funds rate uh, which is similar to where the market is now the futures market of four percent funds right next year, do you think that's a level that is going to be sufficiently high enough to deal with and bring down the Inflation problem and just as a follow-up, could you break that apart for me, how much of that is restrictive and how much of that is a normal positive rate that ought to be embedded or not in your opinion, in the funds rate. Thank you sure. So.

The question really is: how high does the rate really need to go, and this is you know, the estimates on the committee are in that range of three and a half to four percent, and how do you think about that? Well, you can think about the the longer run neutral rate. You can compare it to that. We think that's in the mid twos um. You can look frankly at broader financial conditions.

You can look at you know: asset prices. You can look at the effect you're having on the economy rates, asset prices, credit spreads. All of those things go into that you could. You can also look at the yield curve and ask all along the yield curve.

Where is where is the policy rate so for much of the yield curve? Now real rates are positive. That's not true at the short end, at the short end of the yield curve in in the early years, you don't have real net. You have negative rates still so that, but that really is one data point it's one part of financial conditions, so i i think you i have to look at it this way. We move the policy rate that affects financial conditions and that affects the economy.

You know we have, of course, ways rigorous ways to think about it, but ultimately it comes down to do. We think financial conditions are in a place where they're having the desired effect on the economy and that desired effect is we'd like to see. You know demand moderating. Demand is very hot.

Still in the economy, we'd like to see the labor market getting better in balance between supply and demand, and that can happen both from supply and demand. Right now, there's demand is substantially higher than than available supply, though, so we feel that there's a role for us in moderating demand. Those are the things we can affect with our with our policy tools. There are many things we can affect: uh and - and those would be you know the things - the the commodity price issues that we're having around the world due to the war in ukraine and um, and the fallout from that, and also just all of the supply side.

Things that are still you know pushing upward on inflation. So that's that's really how i think i would think about it, but just three point: eight percent four percent get it done. Does it get the job done and breaking the background good question, i i think it. It's certainly a in the range of plausible numbers, i think we'll know when we get there really.

I mean i honestly, though, that that would be. You would have positive real rates. I think in inflation coming down by then i think you'd have positive real rates across the curve um. I think that you know the neutral rate is pretty low these days so uh i i would think it would, but you know what we're going to we're going to find that out.

Empirically we're not we're not going to be completely model driven about this. We're going to we're going to be looking at at this keeping our eyes open and reacting to incoming data both on financial conditions and on what's happening in the economy. This is all good. So far, nick tamaros of the wall street journal, uh charpelle you've said that you, like your policy, to work through expectations and now.

Obviously, this decision was something quite different from how you and almost all of your colleagues had set those expectations during the intermediate period, and i know you just said that what changed was really the inflation data, the inflation expectations data, but i'm wondering on the inflation expectations Data was there something you saw that was unsettling enough to risk eroding the credibility of your verbal guidance by doing something so different from what you had socialized before yes. So if you look at, we look at a broad range of inflation expectations. Um so you've got the public. You've got surveys of the public and of experts and and you've also got market based, and i think, if you look across that broad range of data, what you see is that expectations are still in the place very much in the place where short term inflation is Going to be high but comes down sharply over the next couple of years, that's that's really where inflation expectations are and also as you get away from this episode.

They get back down close to two percent, and so this is really very important to us that that remained the case, and i think, if you look for most measures most of the time, that's what you see to. Even if we even see a couple of indicators that that bring that into question, we we take that very seriously. We do not take this for granted. We take it very seriously, so the preliminary michigan reading it's a preliminary reading, it might be revised.

Nonetheless, it was quite eye-catching, and - and we noticed that we also noticed that the index of common inflation expectations that the board has moved up after being pretty flat for a long time, so we're watching that and we're thinking. This is something we need to take seriously, and that is one of the factors. As i mentioned, one of the factors in our deciding to move ahead with 75 basis points today was what we saw in inflation expectations, we're absolutely determined to keep them anchored at two percent uh. That was one of the reasons.

The other was just the the cpi rating, so if you saw a movement like that again, another tick up in inflation expectations uh, would that put a 75 or even 100 basis. Point increase in play at your next meeting. You know we're gon na i'll, just say we're going to react to the incoming data and uh appropriately. I think so.

I i wouldn't want to put a number on what that might be. The main thing is to get to get rates up and and then pretty soon, we'll be in an area where, where, where we're, i think, as you get closer to the end of the year you're in you're, in a range where you've got restrictive policy, which is Appropriate 40 40-year highs in inflation. We think that policy is going to need to be restrictive and we don't know how restrictive. So, i think, that's how we'll take it.

Uh hi chair pal neil irwin from axios, thanks for taking our questions, um the uh, the late breaking kind of decision to go to 75 basis points. Uh. Do you worry that that will make policy guidance a less effective tool in the future uh, and should we think of that as a kind of symmetrical reaction function, if we start to get uh soft readings on inflation or if the labor market starts to roll over? To take your second question first, yes, i mean, i, i think, we're again we're we're going we're resolved to take this on, but we're going to be flexible in the implementation of it. Sorry and your question was guidance so again, the the overall exercises that we try to be provide as much clarity about our policy intentions as we can, because we think that makes monetary policy work better.

There's it's always a trade-off, because you have to live with that guidance, and so you do it and it helps a lot of the time. I frankly think this year has been a demonstration of how well it can work. We, you know with the with us, having really just done a very little in the way of raising uh interest rates. Financial conditions have tightened quite significantly through the expectations channel, as we've made it clear what our plans are.

So i think that's been a very healthy uh uh thing to be happening so and - and i would hope that our that are it's - it's always going to be the any any guidance that we give is always going to be subject to things working out about, as We expect, and in this particular situation you know we're looking for something specific, and that is progress on inflation. We want to see progress, we want to see inflation can't go down until it flattens out and that's what we're looking to see and and if we don't see that, then that's the kind of thing that we'll call. Even if we can, we don't see progress for a longer period that could cause us to react, but we will we will soon enough. We will be seeing some progress at some point and and and we'll react appropriate to that too.

But i would. I would like to think, though, that our guidance is still credible, but it's always going to be conditional on on what happens. This is an unusual situation to get uh. You know some data late in in uh during blackout, pretty close, very close to our meeting very unusual to one that would actually change the outcome so um.

That's why the text in my ten years, plus here at the fed i've only seen something like that. Even close to that one or two times, so that's something that will come up a great deal. This is another way of him saying this is why we had to text the wall street journal because we got data so late in the blackout period.