Test test. All right. What's going on guys. So today we are going to be uh, covering the Fomc, uh meeting That's going to be happening in about four minutes.

I'm going to be sharing my screen. Just give me a little bit. I'm going to give it some time for people to start tuning on in posting it on Discord One quick second 2 P.m. Eastern time is in three minutes, right? All right here we go.

The press conference. We are live at 2:30 p.m. Oh, for the press conference because it's 30 minutes after. Yeah, All right.

should be loud enough. Can you guys hear me and see me? Okay, Quality looks good. Justin On your side. Okay Fed Rate monitor tool according to Investing.com just so you guys could see this very quickly.

I'm going to start sharing my screen. Uh, we have a Fed Rate monitor tool coming in at a 95.9% probability that the Federal Reserve is going to pause a 4.1% probab Probility that the Federal Reserve is going to cut interest rates Now what exactly does that mean for people like you? And I Especially right now with such a high expectation that the Federal Reserve is going to pause. Uh I Don't expect the market to see too much of a reaction. it's just it's not what it was before when the Federal Reserve was like aggressively announcing rate hikes of like three qus of a basis points.

That's when it was very significant each Fed meeting. Now, pretty much what we're waiting for is for the Federal Reserve to cut interest rates I Just don't think that we are there yet. I Think it's not expected until Q2 of 2024 that the Federal Reserve is actually going to start cutting interest rates. Uh, when it comes down to NASDAQ NASDAQ is down 1% but if you look at it, from where the market opened at to where we're at right now, pretty much break even right from where we open to where we're at.

So not talking about the movement during extended hours, but where we're at right now Tesla break even in the sense of where it closed at yesterday to where it's at right now. Really nice recovery there. Google Stock has dropped with its selloff. Uh, after reporting quarterly earnings, it beat both earnings per share and overall Revenue But its revenue for its ad rev was down causing the stock to drop 6.3% and at 1.9 trillion doll market cap it lost $120 billion in less than 24 hours.

Talk about a bad day. But guess what, there's still a trillion dollar company so it ain't It ain't as bad for people like you and I And here it goes. we got. we got coin dropping.

Let's see 2 P.m. I'm not seeing anything. A lot of movement on NASDAQ A lot of movement. so let's see what it was.

what was announced. All right. Looks like we're seeing some selling pressure. Beautiful! Drop here on coin.

just want to take a bite my damn. Chipotle Rates are left unchanged. Love it All right? I'm buying to cover. There it goes.

Yep, so the next one is in six weeks and six days that's going to be March What is that Close that out? Yep, still stayed at that 5.5% so not anything going on there. Dwac A lot of consolidation, no sell off there, nothing to do there. some selling pressure, some selling pressure. and this is the really I would say frustrating part.

So just for those that are a little bit newer that don't understand what is going on. Um right now the Fomc uh just announced that there was a pause. So not not a rate cut. Not a not a a rate hike, but a pause.

This was already factored in. so it's not like it's a surprise, but yet the market is pulling on back. Could it be an overreaction? Possibly. But the thing that I also want to remind you is that in 28 minutes um Jerome Pal is going to be speaking and when he speaks it is often more important based off of how he answers questions.

he has this little script that he reads during his speech. It's about a 2 to 3 minute speech. It literally is like it sounds the exact same every single time. Um, that being said, he then begins to answer questions from reporters from different news outlets from like the Wall Street Journal uh New York Times Stuff like that right? We have some people that are are reporters there that are some of our favorites right? right? Justin Um, it's an it's an inside joke for those that tune on in often.

but other than that um, it's based off of how he answers those specific questions that can give us a little bit more detail if the Federal Reserve is more hawkish meaning that they're more willing to raise interest rates or more dovish and less aggressive and more willing to potentially cut rates. So a common question that is most likely going to be asked is how soon can we see the Federal Reserve cut interest rates? Is it before Q2 You know, Is it next month? Is it still being taken? Meeting by meeting? Uh. And that's kind of like the feedback that is given to us uh by Jerome pal who's the head of the Federal Reserve Uh But he also does a really good job not giving too much information as also his part is not to influence the market, but the jobs of the reporters are obviously to try to get that info out of him. So as you can see 2:30 p.m.

eastern time, that's when that's going to be going on live. Um, and until then, uh, we just have to wait for the market to react. So I'm just going to post it here. so F1 Fad paused meaning no I no cut I Just want to explain it so everyone understands, even our beginners that are just getting into this.

I'm going to do another buy to cover. So what this means is I am covering locking in profits in the short position that I've taken as coin became overbought. If you were like Ricky I didn't know that you were taking a short position on coin. it would have been so cool if I would have known.

well guess what? I shared it with my Lpp team I only keep them up to dat and again, you don't have to be a part of it. but I made them aware of what my goal is, what my intention was when it is that I added more to my short what my goal was to cover um and stuff like that. So not only do they get to watch me trade live every morning, but they also get access to these updates that throughout the day. If I choose to take trades or I see specific things either setting up or coming together, um, then I keep them up to date within that that Discord and get into the second link in the description down below.

If you guys want to join and if not again, you guys can just stay subscribed to the YouTube channel. which one oh I thought I did there it goes. Okay, all right and you guys for for the meantime I guess we can leave it up to you guys um to decide but uh, we have about 1,500 of you guys here and if you guys want me to stay live until Jerome Pal begins to speak, then let me know. Drop a thumbs up.

Let me know. uh, where are we at right now with likes? we're at 189 likes? Let's get it to half 750 likes. So 750 likes I will stay live. If not, it's all cool.

Um, we at least hosted this live stream. So I just want enough of you guys to, uh, tune on in and to stay with me. Uh, when Jerome Pal begins to speak, it's probably in my opinion, the most entertaining, uh, entertaining. Uh, but it's also it can get quite boring during the later part of that live.

So I was thinking maybe go live from 2:30 Eastern Time to 3:00 Eastern time is normally when most of the good questions are asked from our favorite people and favorite journalists. What? What's what's the names do you remember Colby I know that one? Uh, you guys have to let me know down in the comment section which one's your favorite reporter? All right. just so you guys could see my screen while I'm uh, closing out my trade I'm going to do a limit order here and the reason why is the spread between the bid and the ask is a little bit too big. So I'm going to bring it down to 13227.

Let's see if it pulls back enough so I can properly exit the trade. No update on that. Yeah, that's funny. Here we go there, it goes filled.

So I've reduced most of my position for my coin short so far on the day I'm up 9,164 started off today in the red just so you guys know. my first video that I uploaded today I showed you guys I think I was down 2 or 3K Um, wasn't too worried about it again. I trade with a little bit over half a million dollars. So uh, being able to come back from a a smaller loss um, wasn't much of my concern I just knew that I needed to stay patient and wait for coin to become very overbought.

Coin has been recently selling off, so it doesn't surprise me that it's most likely going to retrace back down to the moving average, which is right around 127. Doesn't mean that it has to happen. Of course not. patterns tend to repeat themselves, they don't always have to, but um I stayed patient, waited for things to become overbought and Once Direction became favorable I wasn't afraid to take it the position um and step step on the gas when Direction was more clear and it looks like we're really just getting into it if anything.

So I still have part of my position open right now our previous support range as you could see right around 131 so just a little heads up on that. we'll see if we can get that um break below. hopefully before Jerome Pal begins to speak. So why coinbase though? with the new ETF Uh, in my honest opinion, coinbase is useless only.

uh, generates income from transaction fees. Not a fan I'm not a fan of it either. Charlie I Don't think you understand I'm not buying it I'm not investing in it I'm shorting it meaning that I'm making money as it sells off. So I thought it was overhyped.

Um, just like Bitcoin Right when when it rallied up, uh, hit highs of 187, the Bitcoin ETF then was released I I Really do believe that and again, it's just maybe. um I think because of what happened the day before. uh, the spot Bitcoin ETF approval where there was that fake out I Really don't think that it gave Bitcoin the chance to Rally or I didn't give coin the chance to Rally because there's too much of a concern on that fake out. um that it kind of ruined it for the following day where it actually got approved because at that point I feel like there's so much fear already instilled in the market due to the that uncertainty.

we did see Bitcoin run up to 49 for a little bit and then it just absolutely crashed. So I mean it just made things easier for me because I was shorting coin. Um, but it's just un I mean I still feel for the other side. Um, it's unfortunate.

but at the end of it again, your emotions don't make you money. The trades you take do right. So I just decided to not over complicated and go with the flow and Market began dropping and I began shorting I think we just broke 10,000 Yep, $10,000 on on the day there we go. How's the homeless situation there? Still homeless people on the side of the building? Don't worry, we'll take care of it though.

I should throw that spot up on Airbnb should to put it up for like 25 bucks today and be like hey, you going pay for that Not funny, no. takes money to make money brother. I'm trying to can't leave them alone when they're on my private property taking shits and throwing up needles up in their arm. they're bleeding all over the place I Don't know about you, but if you want me to leave them alone, send me your address.

D Brown I'll ship them over to you so you can take care of them and leave them alone. Love to put a TV outside. might as well. are you guys out? Yeah boy.

Take take care brother. Don't let don't step on a needle out there. All right. we have 18 minutes until Jerome Pal begins to speak.

so just ah, heads up. Um, the Federal Reserve F1c Meine announced a rate pause. We're giving it there's seven. What is it? 16 more minutes and then Jerome Pal's going to be live.

You're going to be able to see him there. You're also going to be able to see him in my screen and we're going to hear him. um, pretty much share his feedback on how they came to the decision of a pause and then he's going to be answering some questions. So again, if you would like me to continue to host the live stream, all I ask you to do is drop a thumbs up and get this video to over 1,000 likes.

So if you're in Miami and homeless refus to uh, go to a Shel shelter you can get arrested I wish we were like that here in Arizona The only reason that this lady got arrested is because she got caught with drugs on her. So she did get arrested. but fortunately for her when she was released she just came back and built out her crib a little bit more. Do you think that he will confirm a recession? No.

Ricky are you eating? Chipotle Um yeah Chipotle I Didn't know that I got it with all these fajitas. Has the illegal immigrant crossing affected the area you live in? No, not not for me. I Haven't seen my cousins yet? No, not in our area, not in our area I'm Mexican Oh crap man. Jesus Should I get for my joke? But no I haven't seen any of it.

What's going on? Andrew So I'm in Texas and that is intense I Bet man. yeah. Texas seems to be more in the If Texas becomes its own right. They're trying to fight to become its own country Guys might be moving to Texas right? Isn't that kind of wild? I Guess we should.

Yeah, what you look Russian Someone said I look Russian might want to get your eyes checked buddy. Um, the last thing? All right. A lot of consolidation happening right before Jerome Pal speaks. we got 13 minutes.

I'm probably not going to want to hold this position because if markets begin to recover, we've seen this happen. Markets sell off. During the first part, Drone, Pal begins to speak and all of a sudden, markets can begin to recover. You don't have to, You can continue continue to hold your positions.

You can do whatever you want. You're an adult, right? But I'm just sharing with you that I've seen many times that markets begin to change direction. Shortly after Jerome Pal begins to speak I Don't know why that happens. It's not like he's saying anything different.

He literally reads A a script almost every single time. Um, it's just how the market reacts. There it goes, reduced it. I'm at $9,800 for the day.

Let's close out strong. Right before he begins to speak, we have 12 minutes left so I'll leave it there. so if you guys ever ask. oh Ricky What is it like to watch you trade live in the mornings? It's similar to this.

So if I'm taking a trade during the live trading session, I'm kind. I'm explaining my thought process behind the trade. You get to see the entries I Take you get to see the exits. Um, and it's similar to this in the sense that you get get an inside look behind not just my trades but also the thought process that goes into them.

And there goes. we're seeing a little bit more selling pressure. Um, I should I know I should play it save I'm just going to bite a cover here. All right.

Fully covered. My position fully closed out I left myself with my one lucky share and watch this. There's a common saying within our Lpp team anytime I close out my positions. Um, it actually ends up going even more in my favor.

But I don't get a benefit from it. So I just closed out my short me that I was making money as it was selling off. We're approaching the previous support range of 131 flat. You can see that it's pulling on back testing that same support.

I Wanted to play it safe, not just because we're approaching support, but because Jerome Pal's about to speak in 10 minutes and I just don't want to get caught holding a position that might quickly change direction. So I was making money as coinbase was losing money. Losing value is the best way to put it. So I had negative shares.

That's the way that it's explained. You have negative shares when you short and then you buy them to cover. So I'm going to announce it to my LPB team just in case they're not watching. so just closed my short on coin.

We are live if you want to tune in and again if you want access to all of these updates and there it goes. Coin is actively selling off, going back to lows of 131. But it's okay. Remember um, my trades are never going to be perfect and that's all right.

I Decided to play it a little bit on the safer side just because in preparation of what might happen. But if you want to tune on in these live trading sessions that are exclusive and that happen every single morning, if you're an absolute beginner and you want access to this, it's the second link in the description down below. Or if you have any questions before signing up, shoot me a DM via Discord or via Instagram and that's the first or third link in the description of this video. Okay, you're out all right brother G to say bye to me or what? I Don't care? Yeah, nice seeing you brother take care.

We'll see you in Gilbert Jeez Louise Man, it's Simplicity he focuses on Yep, options are more risky. So are you interested in promoting an An AI tool for trading? No, Not at all. I Get a bunch of emails about that not interested and I mean this. It's just I'm not going to be your guy for it if you want me to promote something.

When it comes down to that, just, it's not my thing. but I appreciate you taking me into consideration. Where you at rookie? We're here at our office. Uh, we're at the techbuds HQ office we're in Chandler Arizona If you're part of our Lpp team, you're always welcome to message me if you want to just visit us.

We open Monday through Friday You do have to message us before you come on in and you can't be a weirdo. So if you're a weirdo I'm sorry I don't care if you're part of VPP you're not allowed. But if you're normal and you want to hang out and get some work done, then message me and we'll send you the address and the time for you to come on in and get some work done. Maybe come out in a few videos.

Uh, brother, you gonna have the pal speech? Oh shoot yeah, it turned off. It starts in 8 minutes. Can you guys see it? Okay, so it's going to be popping up right there. Look at that pulling on back to 131.

14,000 watching for them Swe there it goes retracement all the way back to previous support range we'll see. Oh looks like it's breaking below 131 and there it goes. What? This is. where the Fomo kicks in.

but it's okay. So as you can see my positions closed I left myself with my one lucky share. It's all good. Green is green.

Can't be greedy. My Trad will never be perfect. but damn that sucks for me. You have my phone.

Do you know where my phone's at? Thank you! Okay so Riy let a couple of weirdos outside so they can go take care of the crackhead. No. I wouldn't want to put anyone in any danger. Boom! I'm happy with it.

Glad we closed out the position. How do I message you on? Discord I'm part of the Lpp team. Super simple. First off, I explain it in the course on how to message anyone.

uh but any, you know if you see my bubble right because you could see all of my bubbles here, what you would do is you would right click on my name and then click message and then you will directly message me. Um, so that's how you message me directly via Discord if you're part of our LPB team if you're not part of it yet. Second link in the description down below. Nice pullback.

Okay, we have five minutes left. Five minutes guys. till Jerome Pal begins to speak. Let's see if we can get 1,000 likes.

We're nearly at 800 1,000 likes. All you need to do is smash that like button, subscribe to the channel for so options or only Uh, stocks traded on Lpp is that? Michelle Michelle I only focus on trading shares I As you probably have seen I I've never uploaded a video about trading options I don't trade options I don't pretend to trade options. it's just it's not my thing. So I focus on beginner videos about getting started in the stock market.

My main focus is normally focusing on NASDAQ and I normally focus on trading a pair of ETFs known as TQ and Sqs. Um, but I do Branch off kind of like I have for the past two to 3 weeks and I love shorting it. It's broken down in the course uh, especially when markets are very overbought or individual stocks are very overextended. I love to short them on the way down.

It upsets a lot of people because they're normally holding a position hoping that it continues to go up, but kind of just like any pump and dump right at the end of it, they're going to end up correcting themselves so I can either feel bad for those people or at least warn them as you've seen many of the videos that I make. I Always try to make warning videos about when markets are overextended or when individual stocks are overextended. And of course I short the crap out of them when they begin to drop. That's my job as a Trader We're all here for the same reason and that's to make money and there's no nothing else to it.

Uh, will I learn how to short when I join Lpp. The videos are covered in the lesson library and you also get access to my daily live session which I cover. You can see my short positions that I take every time if I open up a short position during those lives. uh I need a charger? Give me one quick second H I have I have my charger I just need one that will reach here.

Do you guys like this angle? Is this angle okay? Can you guys see that? Okay, it's on the side pocket that doesn't re the same distance. Yeah I can move a little over. Yeah I'm going to have to. do you want to pull that with me ready? Better napkin on here.

Yeah. The thing about this is that my charger is on that port and it's being covered. Oh how are we going to do that? Because then it would. It would erir out the live stream.

Drone Pal: uh he speaks in one minute so we'll see how how much of I cover I'm at like 10% 7% Yeah these live streams. uh live streams eat up a lot of the juice. It's all good d Give me one. see Jerome Pal speaks in less than one minute Again, if you're tuning on in, drop a thumbs up.

Subscribe to the channel. We should be hearing him any second now. 6% Maybe I can turn my yeah, there's no way I'm going to have to figure that out right now. Let me see if I could switch the camera for just a little bit.

Can you check the quality of the stream when I do this ready? Okay, lovely, No No no I can I'm going to switch it back there we go test test. We're good. lovely good y Okay Oh for that's fine though, but you can I'm going to I'm going to be sharing the screen on my screen anyways. Coin trying to find a support looks like one of you guys liked my Wall Street tea that I'm wearing it you just picked it up from Shop techbuds my Wall Street te all the different uh t-shirts we have on the site, you guys can feel free to check it out.

it's the fourth Link in the description down below or shop Tech Buds.com I do not know where Jerome Pal's at. he's 3 minutes late already how speaking? see if you can forward. oh my gosh, it wasn't live was like as measures from financial markets. the Fed's monetary policy actions are Guided By our mandate to promote maximum employment and stable prices For the American people, my colleagues and I are acutely aware that high inflation imposes significant hardship as it erodes purchasing power.

especially for those least able to meet the higher costs of Essentials like food, housing, and transportation. this is a script. We're highly attentive to the risks that high inflation poses to both sides of our mandate, and we're strongly committed to returning inflation to our 2% objective. Over the past two years, we have raised our policy rate by 5 and a quarter percentage points and we've decreased our Securities Holdings by more than $1.3 trillion.

Our restrictive stance of monetary policy is putting downward pressure on economic activity and inflation. The committee decided at today's meeting to maintain the target range for the Federal Funds rate at 5 and a qu to 5 a half% and to continue the process of significantly reducing our Securities Holdings. We believe that our policy rate is likely at its peak for this tightening cycle and that if the economy evolves broadly as expected, that's it will likely be appropriate to begin dialing back policy restraint at some point this year. That's really good, but the economy has surprised forecasters in many ways.

Since the pandemic and ongoing progress toward our 2% inflation objective is not assured, the economic Outlook is uncertain and we remain highly attentive to inflation risks, we are prepared to maintain the current target range for the Federal Funds rate for longer if appropriate. As labor market tightness has eased and progress on inflation has continued, the risks to achieving our employment and inflation goals are moving into better balance. We know that reducing policy restraint too soon or too much could result in a reversal of the progress we've seen on inflation and ultimately require even tighter policy to get inflation back to 2% data, the evolving Outlook and the balance of risks. The committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2% We will continue to make our decisions.

Meeting by meeting, we remain committed to Bringing inflation back down to our 2% goal and to keeping longer run, longer term inflation expectations well anchored. Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run. To conclude, we understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public.

Mission We at the FED will do everything we can to achieve our maximum employment and price stability goals. Thank you! I Look forward to our questions. Gina Smiling from the New York York Times Thanks for taking our questions obviously in the statement and just in your remarks. There, you note that you don't want to cut interest rates without greater confidence that inflation is coming coming down fully.

I Wonder what do you need to see at this point to gain that confidence? And as you make those decisions, how are you weighing recent strong growth in consumer spending data against the sort of solid inflation progress you've been seeing? Sor I See that last 4. How how are you weighing the growth data and consumption data which have been surprisingly WR against inflation data? Okay, so what are we looking for to get greater confidence? Um, let me say that we have confidence. We're looking for greater confidence that inflation is moving sustainably down to 2% Implicitly we do have confidence and has been increasing, but we want to get greater conference. What do we want to see? We want to see more good data.

It's not that we're looking for better data, it's we're looking at continuation of the good data that we've been seeing. And a good example is inflation. So we have six months of good inflation data. The question really, is that 6 months of good inflation data? Is it sending us a true signal that we are, in fact, on, uh, a path, sustainable path down to 2% inflation? That's the question and the answer will come from some more data that's also good data? It doesn't.

It's not that the six-month data isn't isn't low enough, it is. It's just a question of can we take that with confidence that we're moving sustainably down to 2% That's really what we're thinking about in terms of of uh, growth. Um, we've had strong growth. If you take a step back, we've had strong growth.

Very strong growth last year, going right into the Fourth Quarter. Um, and yet we've had a very strong labor market and we've had inflation coming down. Wow. So I think whereas a year ago we we were thinking that we needed to see some softening in economic activity.

That hasn't been the case. So I think we we look at we look at uh Stronger growth. We don't look at it as a problem. I Think at this point we want to see strong growth.

We want to see a strong strong labor market. We're not looking for a weaker labor market. We're looking for inflation to continue to come down as it has been coming down for the last six months. And I'm sorry if I could just follow up very quickly.

The When: When you say that you want to make sure that it's a true signal, is there anything that you're seeing in the data that makes you doubt that it's a true signal at this stage? I Think it's I I would say it. It seems it seems to be the likely case that that we will achieve that confidence. but we have to achieve it and we haven't yet. And so I I mean it's a good story.

We have six months of good inflation, but you can and you know this. You can look behind those numbers and you can see that a lot of it's been coming from Goods inflation for example, and goods inflation running significantly negative. It's a reasonable assumption that over time Goods inflation will flatten out probably approximate zero. That would mean the services sectors would have to contribute more So in other words, what we care about is the aggregate number.

Not so much the composition, but we. We just need to see more. That's where we are. as a committee.

We need to see more evidence that sort of confirms what we think we're seeing and that tells us that we are on gives us confidence that we're on, uh, on a path to a sustainable path down to 2% inflation. Nick Nick Timos of the Wall Street Journal Chair pal. It seems to me you raised rates rapidly over the last two years for two reasons. One was the risk of a wage price spiral.

Two, there were risks of inflation expectations becoming unanchored. This morning's ECI report for the Fourth Quarter shows private sector payroll growth running at a sub 4% Pace Inflation expectations are very close to where they were before the inflation emergency of the last three years, and given that you appear to have substantially cut off these two tail risks and that you've judged uh here today current policy is well into restrictive territory. What good reason is there're to keep policy rates above 5% Are you really going to learn more? waiting 6 weeks versus 3 months from now that you have avoided those two risks? Beautiful. So um, opening short again? As you know, Um, almost every participant on the committee does believe that it will be appropriate to reduce rates.

And uh, for the reasons that you say, you know, we, we feel like inflation is coming down. Uh, growth has been strong, the labor market is strong. Um, we're What we're trying to do is identif ify a place where we're really confident about inflation. Get it getting back at 2% so that we can then begin uh, the process of dialing back the restrictive level.

Uh, so overall I think I think people do believe in as you know, the median participant wrote down three rate Cuts this year. Uh, but uh I Think to get to that place where we feel comfortable starting the process, we need some confirmation that inflation is in fact coming down sustainably to 2% if I could ask differently. Uh, if if you hold rates high as inflation moderates as it as it has been, Target rates will exceed the prescriptions of the tailor rule or its variance. What would be the reasoning for holding rates higher than the levels recommended by those rules? Uh, in the current instance, well, I look I Think As you know, we consult a range of tailor rules and and non- tailor kind of rules.

We consult them regularly. They're in our our tealbook and and uh, they're in all the materials that we look at. But you know I Don't think we've ever been at a state. at a place where we were where we were setting policy by them.

Um, and they're depending on the rule. Uh, it will tell you different things. There are many different formulations. Another way to think about it is implicitly is Um.

So in theory, of course, real rates go up if holding all else equal as inflation comes down. But that doesn't mean we can mechanically adjust policy as real rates. Sorry, as inflation comes down. Doesn't mean that at all.

Because for one thing, uh, we we don't know. We look at more than just the FED funds rate. We look at broadly Financial conditions. But in addition, we don't know with great confidence where the neutral rate of interest is at any given time.

But that also doesn't mean that we wait around for uh to see uh, you know, the economy turn down because that would be too late. So we're really in a risk management mode of managing the risk as I mentioned in my opening remarks, managing the risk that we move too soon and move too late and I think to move. Which is which is where almost everyone in the committee is is in favor of of moving rates down this year. Uh, but the timing of that is going to be linked to our gaining confidence that inflation is on a sustainable path down to 2% Hi, Uh, thanks, Chair B I'd like you to to key in on the use of the word um' in the statement that inflation Still Remains elevated.

Um, you've pledged to cut rates before inflation reach 2% so that implies that there's some sort of intermediate step appear on inflation and that a cut would be consequent with a change in the statement language that inflation remains elevated. What's the step down from there? Yeah, I I I Don't know that we've worked out the particular statement language and that kind of thing. I would just say if you look at you look at where where 12-month inflation is and it's you know it's still well above core is 2.9% for example, 12 months, which is way down from where it was. Very very positive development, very fast decline, and and you know I the the the case is likely that it will continue to come down.

So so that's where that's where it is. But we're you know we're wanting to see you know more data. So uh, if if I could follow up on that, the statement um allows that you want greater confidence on uh, inflation falling before you cut. but it doesn't mention the other side of the Mandate a sliding employment would a sliding employment also.

Uh, bring you to the point of of cutting rates. Yes. So uh, let me say that we're not looking for that. That's not something we're looking for.

But yes, if you think about, you know in in the base case, uh, the economy is performing well, the labor market remains strong. If we saw an unexpected weakening in in, certainly in the labor market, that would certainly weigh on cutting sooner. Absolutely. And if we saw inflation being stickier or higher, or uh, those sorts of things would argue for moving later.

Uh, in the base case though, where where the economy is healthy and we have, as you know, we have ongoing growth, solid growth. we have a strong labor market. We have inflation coming down. That's what people are writing their SCP around.

And in that case, what we're saying is based on that, we think we can and should, uh, take advantage of that And and be careful as we approach that question of when to begin to dial back restriction CLA Jones Financial Times Just to Circle Back to um, the greater confidence aspect of the statement. Um, there's been a lot of unanimity in recent meetings. I'm just wondering going forward when it comes to all needing greater confidence is the unanimity or at least consensus among Fomc members about what the threshold for that greater confidence is. And if not, could you maybe tell us a little bit about the discussion today on.

you know what the variations between between Fomc members was on what constitutes enough confidence to cut rates, and also if there was any variation on how quickly that greater confidence threshold could be reached. Thank you. We're not. We're not really at that stage.

You know we're we're we're There was no proposal to cut rates. Uh, some people did you know talk about their view of the rate path. I would point you to the SCP uh as as U You know as good evidence of where people are. although it is.

it is one cycle later so you know we, we are, we're not. We're not at a place of of really working out those kinds of details because we weren't actively considering. You know, a moving moving the Federal Funds rate down I Will say there's a there is a wide disparity, a healthy disparity of views, and you see that in public uh, public statements in the minutes, uh and the transcripts when they're released every 5 years. So we do have a healthy uh set of differences and I think that's actually essential for making good policy.

We're also able to reach agreement generally because we listen to each other, we we compromise and even though not everybody loves what we do, they're able to for the most part able to join in. To me, that's a that's a well functioning public institution. Rachel Hi chair pal Rachel Seagull from The Washington Post Thanks for taking our questions. So over the past few years there have been all these real time indicators that helped us gain a sharper understanding of of where the economy was, like open table data or office attendance.

You've talked about vacancies in the past, and I'm wondering at the start of this year what might be on that dashboard for you that's giving you the clearest picture of the economy, including on rents. If you could touch on that, including rent. rent costs. Yeah, yeah, well, so we're not.

You know it's not the pandemic, so we can actually rely on more more traditional uh forms people are working, they're getting wages, uh, and and the economy is largely reopened and is broadly normalizing as you see. So I wouldn't say we're looking at that, that sort of more Innovative data as much. Um, you know you point to rent. So of course we follow the components of inflation very carefully.

which would be Goods inflation I Talked about that a little bit. You mentioned housing inflation. So the question is, when will these lower Market rents find their way into measured rents d as measur measured in Pce inflation And we think that's coming and we know it's coming. It's just a question of when and and how big it'll be so, but that's in in everyone's forecast I would say so that will.

that will help, but at the same time we think Goods inflation will. Probably it's been giving a lot of disinflation to the effort and probably that declines over time, but it may well have some some more time to run. You know these the supply chains are not perfectly back to where they were. In addition, it takes time for the the healing process to get into prices, so there may be still a Tailwind we'll find out with with that.

So we look at the things that relate to our mandate very carefully and uh, as you would imagine I guess just as a quick followup. do you feel comfortable at this point saying the economy has reached a soft Landing Or is that part of looking for more confidence? No I wouldn't I wouldn't say we've achieved that and I I think we have. We have a ways to go. Inflation is still, you know core inflation is still well above Target on a 12-month basis.

12 months is our our Target Certainly I'm encouraged and we're encouraged by the progress. but uh, you know we're We're um, we're not. We're not declaring victory at all. At this point we think we have a ways to go.

Steve dropping Thank you Mr Chairman Um, you've said that you would know the neutral rate by its works. So I'm wondering what you could tell me. How do you believe the neutral rate is working? We're telling you right now that growth is stronger in other words, how much is the economy really being restrained right now by the current funds rate and how much restraint does it really need? Additionally, if inflation is still coming down, so it's I think you? You do see in the interest sensitive parts of the economy you do see, for example, housing. You see the effects you do your.

Your second question though really I think is important and that is a lot of this has come through. Uh, a lot of the disinflationary process has come through the healing of Supply chains and also of the labor market. So you've seen you know that other set of factors is really different from other cycles and has brought that working with tighter, tighter policy which has enabled the supply side to recover I Think is the that mixture has been behind what has enabled this? Um, so no, we really do think that we're having an effect broadly across the economy. I would point to the intensitive uh uh parts of the economy as well as as spending generally.

um, but it's a it's a joint story. It's a complicated story, but but how much restraint are you actually imparting to the economy would you say relative to the neutral rate? it's so I think it's it's of course you know that it's not something you can identify with any Precision but if if you a standard approach would be to take the nominal rate 5.3% let's say and subtract sort of a a forward measure of inflation if you do that. And there are many, many ways to calculate the neutral rate, but that's one I like to do and you you're going to get to something that is materially above mainstream estimates of neutrality of the neutral rate. You will and but at the same time you look at the economy and you say this is an economy that grew 3.1% last year and and you say what does that tell you about the neutral rate? What's happening though is the supply side has been recovering in the middle of this so that that won't go on forever.

So a lot of the growth we're seeing is not Is it isn't just a tug-of-war between between interest rates and demand you're getting you know more activity because of the of Labor Market healing and Supply chains healing. So I so I think the question is when that Peters out I think the the you know the the the Restriction will show up probably more more sharply. Thank you Sorry, uh thanks for taking the question Mr Chairman: Um, you mentioned earlier we're not seeking a weaker labor market I think that you said can you talk a little bit more about that Do Do you think the neighbor market now is back to quote unquote normal and that um uh the we can uh achieve uh the the inflation Target without wage gains coming back down to they were pre- pandemic. Even with today's ECI levels, they were still above those pre pandemics.

I Think the labor market by many measures is at or nearing normal but not totally back to normal and you pointed to one or more of them. So I Think you know job openings are not quite back to where they were. Wages are wage increases, rather are not quite back to where they to where they would need to be in the longer run. I I Look at this way though.

um, the the economy is broadly normal normalizing and so is the labor market and that process will probably take some time. So wage setting is something that happens. It's it's you know. probably will take a couple of years to get all the way back.

and that's okay. that's okay, but we do. See you saw today's ECI Reading You know the evidence is that that wage increases are still at a healthy level. Very healthy level, but they're gradually moving back to levels that would be more.

Associated G Given assumptions about productivity are more typically associated with 2% inflation, it's it's an ongoing process, a healthy one. And and you know I Think we're we're moving in the right direction so that process can continue without a weakening of the labor market. Basically you I think the the labor market is it I Don't know. it's rebalancing clearly that the there was a uh, fairly severe imbalance between demand for workers and Supply at the beginning of the pandemic.

So we lost several m workers at the beginning of the pandemic from people dropping out of the labor force and then when the economy reopened, you remember 200 21 you had a severe labor shortage and it was just it was everywhere Panic on the part of businesses couldn't couldn't find people. So what's happened is uh, we expected labor the Labor uh Supply labor market to come back quickly and it didn't. And in 2022 was a disappointing year and you know we were kind of thinking well, maybe we won't get it back and then 2023, we did. As you know, so labor force participation came back strongly in 23 and so did immigration.

Immigration came to a halt during the pandemic. So and so those two forces have significantly lowered the temperature in the labor market to will. It's still a very strong labor market. It's still a good labor market for wages and for finding a job, but it's getting back into balance and that's what we want to see.

And you know one great way to look at that is what's happening with with wage increases and you see it now across the the major things that we that we track. it isn't every quarter, but overall there's a clear Trend still at high levels but back down to where would be what would be consistent with with where we were before the pandemic and with 2% inflation Chris I like that? yeah hi, uh Chris Rugaber at Associated Press thank you I Wanted to follow up on Rich's question. uh, it sounded like you suggested that uh, you're not worried about faster growth so much so wanted to see if you're seeing anything that suggests that inflation could re Accelerate from here And it sounds like you're saying you're not worried, that, uh, solid growth from here on out poses any risk to inflation Thank you. No I think that that is a risk.

The risk that inflation would uh would re accelerate I think the the greater risk is that it would that it would stabilize at a level meaningfully above 2% That's that's to me more likely. Of course if lab if if uh if um inflation were to surprised by moving back up that would we would have to respond to that and that That would be a surprise at this point. But I Have to tell you. that's why we keep our options open here and why we're not.

You know, rushing. So um I I think both of those are risks but I think the more likely risk is the one that I mentioned. which is you, you've had six good months, very good months. but what? What's really going to shake out here? You know where what what will When we look back, what will we see will will inflation have dipped and then come back up is are the last 6 months flattered by by factors that are that are one-off factors that won't repeat themselves? We don't think so we don't You know that's not what we think but that's the question we are asking.

We have to ask and we want to get Comfort on that and just one quick followup. uh Governor Waller had mentioned the um uh revisions that are coming on February 9th for the CPI data. Is that something you're watching as well? And if if we see those revisions fairly minor, uh, is that going to give you more confidence? U Where things are going, we'll just have to see. Yeah, we'll We look at those.

Last year was a was a a surprise mik Michael Mcke Bloomberg Radio and Television Uh, if you don't want to use the term soft Landing Uh, would you say at least that uh, from your point of view. Now the other scenario of a hard Landing caused by the FED is off the table or the risk of diminished uh, very much. And uh, you mentioned um, below 2% inflation for on a 3-month basis. Core PC has been running at 1.5% and there are those on Wall Street who think that if you maintain the level of restriction you have right now, you could end up with inflation running below your target.

Uh, how do you see that? So how to Des Your first question, how to describe where we are? So I guess I Would just say this executive summary would be that growth is solid to strong over the course of last year. Um, the labor market 3.7% U unemployment indicates that the labor market is strong. We've had just about two years now of of unemployment under 4% That hasn't happened in 50 years. So it's a good labor market and we've seen inflation come down.

We've talked about that. so we've got six months of good inflation data and an expectation that there's more to come. So this is this is this is a good situation. Let's be honest, this is a this is a good economy.

But what's the Outlook that's looking in the Riew The Outlook. We do expect growth to moderate. Of course we have expected it for some time and it hasn't happened. but we do expect that it will uh, moderate as supply chain and labor market normalization runs its course.

Um, labor market is rebalancing. As as I mentioned, job creation has slowed, the base of job growth has narrowed. Um, and of course 12 12 month inflation is is above Target And and getting you know, getting down closer to Target is not guaranteed. But we do seem to be getting on track for that.

So those are the risks, uh, and and questions we have to answer. But overall this a pretty good picture. It is a good picture. Um, your second question was uh, sorry, could you get uh, inflation that is below Target End up with inflation below Target and you have to do something about that.

So we the thing is, we're not looking for inflation to tap the 2% base once. we're looking for it to settle out over time at 2% and the same thing is true. if we have a month or two of lower and we have that now of of inflation that's annualized at at a lower level, that wouldn't be good. We're not.

You know we're not looking to have inflation anchor below 2% We're looking to have it anchor at 2% So if we do face those circumstances, then we'll have to deal with that. I think I think As of now you know the the Um question. We want to take advantage of this situation and finish the job on inflation while keeping the labor market strong. Edward Um Edward Lawrence from Fox Business Thank you Mr Chairman for taking this Um So as as as I've heard from some District Fed presidents, is it in your view, a little premature to think that rate cuts are right around the corner? And then when we do see that First Rate cut is that should we interpret that as the beginning of a rate cut cycle or is it a one-off So point to that language on your first question we we we included that language in the statement um to Signal Clearly that with strong growth, strong labor market inflation coming down, the committee intends to move carefully as we consider when to begin to dial back uh, the restrictive stance that we have in place.

So did I close that to the current context current context. We're going to be data dependent. We're going to be looking at this meeting by meeting Um based on the meeting today. I Would tell you that I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that, but that's that's to be seen.

Um, so I wouldn't call. You know when you say when you ask me about in the near term I'm hearing that as March I would say uh I don't think that's it's probably not the most likely case or what we would call the base case. Then your second question is on on the is this the start of a when we see a cut? Is it the start of a cutting cycle or is it could it just be a one-off You know that's going to depend on the data. The whole thing is, this is going to depend on the data.

We're going to be looking at the economic data as it affects the Outlook and the balance of risks and we're going to make our decisions based on that. and uh, It could wind up. You know we'll We'll have another Sep at the March meeting and people will write down what they think, but in the end, it's really going to depend on how the economy evolves. We talked about.

There are risks that would cause us to go slower. For example, stronger inflation, more more persistent inflation. There are risks that would cause us to if they happened that would cause us to go faster or and sooner. and that would be a weakening in the labor market.

Or for that matter very very persuasive. Lower inflation. Wow, those are the kinds of things. So we're just we're just going to be reacting to the data.

That's the. That's really the only way we can do this close too early, Huh? Victoria Hi Victoria Guido with Politico Um, could you talk a little bit more about productivity growth growth? Um, you know you've mentioned multiple times about you know the level of wage growth that's consistent with 2% inflation? obviously. Well, we are there at that 30 minute. Mark You guys saw me not only take my short position and cover on the original selloff right before Jerome Pal spoke but like I said I also gave the announcement that normally we see a quick change of Direction when he begins to speak which we did which again, that doesn't always happen but I've seen it happen before so that's why I give out that warning just based off of my experience became overbought.

It went back to retest previous highs. It did the same with overall NASDAQ Market As you can see, it went back to retest previous highs. um and it ended up getting rejected. Now we're actively selling off I closed my short position on coin.

So I mean I'm not making any more money other than with my one lucky share. Um, but that is it. At least we're able to catch two solid trades on literally the same move. I Didn't go long on this I caught it on the way down and I caught it on the way down.

So um, that's it. This is why we talk about waiting for an opportunity to present it itself. This is why we talk about waiting for F1c report to come out. Because you don't have to trade right when it comes out, you can give it time for markets to become overbought, oversold, and wait for these larger setups where more money is made and when direction is a little bit more clear.

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