Oh man, who's ready. This is what we've been all been waiting for: okay, that sounded really loud and annoying, but uh it's true. This is what we've all been waiting for. We are uh three minutes away from the federal reserve decision on what to do what this means is.

We are going to get two things we're going to get a sep, which is a summary of economic projections. We are as soon as possible going to try to jump over and figure out what the rate projections are going to be: uh and uh. Oops uh, but anyway, uh yeah, we're gon na quickly jump to see what the rate projections are going to be. We are uh going to get a statement quickly on what the pace of the taper is and we're going to see uh what, if there's any change to rates, we're not expecting a change to rates we're expecting bond purchases to go down to 75? So that's the key thing we're expecting is 75..

If he says 60, it means the taper pace accelerated. If he says 85, it means they didn't taper as much as they. They actually thought they would so uh kind of exciting uh we'll see what happens here. Kind of nervous, uh stocks are stocks and crypto worth noting slightly rebounding right now.

Now, that's possibly because a lot of us have been uh buying the tip here: uh, we've, we've i've been sending quite a few alerts for for buys uh here, because i've been buying the dip on some of my faves er. The s p was down as much as half percent uh and uh we've seen some some stocks at some pretty substantial lows quite excited to see what happens in the next two minutes here now: uh yeah, okay. How are we gon na? Do this so keep in mind, i'm probably going to pull up cnbc because i believe they get the embargoed release. What that means is they already know what the answer is, but they just can't talk about it until 11.

uh. I don't have that kind of media privilege so, but i will also be uh trying to pull up the documents uh myself, so we can then go through them together. So we'll kind of double tag, see who has it? First? We are now 60 seconds away. Uh we've got the spy up right here.

People are are buying this dip right now, uh, which, which is a healthy sign. I mean look at some of these low levels. We've got here: okay, 105: a firm, uh, tesla's, pretty low right now, uh, you know relative. Under the pressure of elon sales, btc ethereum sitting right around those support levels still got nvidia green uh sofi sitting under support levels.

There's some nice opportunities. A hood is, at you know, all-time lows: you got 52 53-week lows some things like wayfair paypal square uh. You know, obviously, the small caps recoveries are getting hit under omicron, but really where the focus is going to be right now is going to be on the nasdaq on tech on the spy uh growth companies, growth companies are what we're waiting for. Okay, it's gon na be fun uh 20 seconds to go so again.

Uh cnbc's, probably gon na, beat me to it, but we'll see we'll see i'm searching now. It sounds like the markets overall would be flat to higher. Potentially i mean as long as we don't get an extremely hawkish surprise yeah. Here we go um.

Actually you know what we're gon na get straight to i'm sorry, we're gon na get straight to steve lee's, because we do have the federal reserves decision on interest rates. Steve 30 billion double the size of the taper uh to 30 billion dollars a month. Uh the federal reserve, uh adjusted the tape said it will adjust the taper further if warranted it did, leave the funds rate unchanged at zero, as expected everything as expected right now. That's good by the economic outlet.

It will maintain zero rates until maximum employment is achieved. Now the fed is no longer using the word. Transitory. Doesn't call inflation transitory more on that in a second, but i want to show you what it looks for.

The median fed forecast now looks for a 0.9 percent funds rate in 2022. That's up quite a bit from where it was, and even more aggressive than we saw in our cnbc fed survey and for 1.6 for 2023. So call that what you want to call it three or four hikes next year, uh, sorry, two or three yep, the s p is falling on this. We're gon na have some more opportunities here.

Let's keep listening a federal reserve website's, not even loading right now forecast, but it does see it coming down in 2022 to 2.6 percent the fed saying supply demand imbalances are really contributing to the elevated inflation level. It sees risk from the new variant to the economic outlook of the virus. The decision was unanimous. Job gains have been solid.

It said the unemployment rate has declined substantially. Now importantly, and maybe somewhat amusingly, the fed said it is no longer seeking inflation above two percent. So doubling the taper, but keeping it zero and saying maintain it until maximum employment is achieved kelly, okay, so uh. Here we go so what we have is uh expectation met.

Expectation has been met, uh we're tapering, 30 bill and uh. We are uh we're not raising rates. That's the expectation cannot even get the federal reserve website to load right now, i'm trying on like multiple different uh internet connections, and it is just not loading but no worries. We already got the answer now: federal chairperson jerome powell federal reserve, chairperson john powell.

He speaks in a 28 minutes, so we're going to get a lot more insights in 28 minutes. It does sound like, though the expectations for rate increases were higher than expected. Expecting to it sounds like have three rate increases to get us to point nine percent uh on uh sort of the average expectation by uh the end of 2022. That would mean we would have to raise rates uh once to 0.25 to 0.5 once to 0.5 to 0.75 and then once again to 0.752.

That's three rate increases expected now: uh by the federal reserve survey uh in uh uh in in their dot plot. I'm gon na try to get these things up here. Here is their actual statement um. The federal reserve is committed to using a full range of spook.

We've heard all this stuff before and really what we're looking for. Is this section right here uh? The committee seeks to achieve maximum employment inflation rate of two percent. Over the long run. To support these goals, we decided to keep the target range for the fed run funds rate.

This is that reiteration. That rates are staying, stable and then, of course, uh. The taper question is right here: what do they say about the future taper committee decided to reduce monthly uh pace of its net asset purchases, buy an additional 20 bill for treasury securities and 10 bill additionally for agency backed mortgage-backed securities, okay good. So there's your 30 bill.

This is as expected, uh now it does look like we're having a little bit of pop here hold on a sec before i keep looking at some of this fed stuff having a little bit of pop here on uh, the s p uh we're actually having a Pop on on uh tesla as well uh, this is kind of what we expected. This is one of the reasons i just shot. I probably just spent like six hundred thousand dollars, uh talking with course, members about some stuff that i was buying just minutes before this release. The market is actually cheering this that this is not a rug poll.

It looks like tesla's now going green on this news, and just because you see these minute, candlesticks doesn't mean that it's going to last, but it is a sign that the market is starting to cheer this again. Jerome powell could ruin this so don't blow everything you have. Jerome powell could ruin this when he's talking, but uh, i'm gon na go shopping right now, uh myself a little bit more uh than i had uh just about uh, because i said i would uh. I just went shopping about 15 minutes ago when things were nice and cheaper, and now i'm going to grab a little bit more because i said i would and i like doing what i say i'm going to do so.

I'm going to look at some of my faves here, so uh picking up a little bit more again, if you're not part of the stocks and psychology of money course, i don't know why. Why you're not you should really check that out, because at the very least you get those alerts use that xmas coupon code, but uh. We literally just bought multiple of these stocks that that are now moving up uh nicely here: uh right before the fed meeting. So we got nice, a nice bigger discount here before the fed meeting, but don't let that make you fearful because we we are at relatively low prices here so uh.

I do wish this would move a little faster for those of you in the stocks on psychology money course. I'm going to quickly just say what i'm buying tesla, okay, okay, so yeah. I wish this would move a little faster, but i am going shopping a little bit more right now, uh again i intended to do this on a bounce and uh. It is possible - and i did most of my shopping before this bounce already.

So i feel happy about that, but i'm gon na grab a little bit more now: okay, okay and uh. It looks like you've. Also yeah you've got a multitude of bounces here right now. These are.

These are some low prices. I think you can really establish nice positions and still uh i. This is not a rug pull by the fed. This is literally what jerome powell told us we should expect.

This is why, again, i did most of my purchasing beforehand uh. So i'm excited about this. Okay, i also said i would establish some position. Take a look at this one folks, here's another one hold on one sec, oh uh, okay, so yeah roku was another one.

Super super low fell like almost a high of 13 percent today, uh looking at some other. It's it's also rebounding right now, let's see btc usd. Let's take a look at this: oh yeah. There we go there, we go.

What did i say this morning this morning i literally said folks: it was going to be leading up to the meeting. We were going to go back to support and that we were likely to get a bounce after the meeting. That's literally what we're experiencing right now, uh, which is awesome, awesome awesome, awesome. Another one! That's probably super low right now.

Let me see here: hood uh yeah. You got ta bounce on hood as well uh this morning i also uh. I bought 420 yolo call options on hood and uh. Let's just say, i got a way better price than what it is right now uh, but uh this.

This is good. Now we have to be careful: okay, don't blow all of your money uh! That's because jerome powell is still going to be speaking in 22 minutes. So, even though i'm doing a little bit of shopping right now, because i see some opportunities on this rebound uh. All of this, this rebounding could you term very very quickly if uh, if jerome powell says the wrong thing, so i would not blow all of your money.

But again most of my purchases were done uh before this um this release. Here i am doing a little bit more purchasing right now i mentioned i would do most of my purchasing before which i've done over the last three days and uh. Now i'm doing my um, the rest, okay cool. So now, what we're also going to do is we're going to look at the summary of federal reserve economic projections in just a second okay.

There we go there we go. Let me get the summary of economic projections up really quick see if the fed sites actually loading now, because that's let's see summary economic projections are out good. Okay, this is going to be big. This is what we're going to look at here.

Pdf projections waiting for that pdf to load uh, keep in mind, be patient on on a u-turn. I did a little bit more shopping but again be patient, because jerome powell can say something stupid and all of this could turn red again. But uh, you know don't be bashful. If there are some companies that are at some juicy prices, see you're getting a little bit of that u-turn.

That's okay! Okay, so summary of economic projections by the fomc - and this is data 12. 15.. Okay, here we go. Let's now look at the sap and then i'm going to save some buying power as well, for if we get larger pain in the future, i'm hoping this is the potentially a beginning of a santa claus rally.

Some people think i'm crazy for saying that. I think that this might be the potential future of a beginning of a santa claus rally, but i really think the market was starting to price in, like worst case scenario, where the taper's going to zero and rates are going to go up immediately. Here you go folks wow. That is a big revision, though in rates i have to say this is a big revision right here: federal reserves september protection, the the september projection, was that we would, in 2022, have rates that would go up to 0.3 and an average of one percent in 2023.

We're now expecting i mean this is almost triple. It is triple. This is triple right here, so expecting three rate increases now in 2023. Now, in fairness, this is what wall street expected.

It is not uh what uh it is not worse than expected, and i think that's why we're seeing a little bit of a bump in markets right now, not huge uh s. P did go positive. Let me see quickly, how did the other indices do? The all indices just turned green okay, so all indices are green. We're expecting three rate increases, so we're gon na write that here, that's three rate increases for 2022 and two rate increases in 2023 and two rate increases in 2022.

uh. This used to be just for reference. This used to be zero, two three, so look at how the fed is u-turned here in that they're expecting to increase rates much sooner than expected, so that's important to keep an eye on okay expectations for inflation. You ready for this uh the pce just pretend that says: cpi they're very, very similar, okay, very similar here.

The pce expectation is that by the end, by 2021, we are at the end of 2021. Well, obviously, their expectation was way wrong for the end of 2021. Since we're at uh uh, you know a core inflation rate - that's much higher than this, but anyway core. Let me go with cp.

Let me go with pce rather than core that we don't have to explain the difference here. This right here in cpi world is a 6.8 right so obviously way higher than even the fed's projecting now, but look at this they're expecting inflation to have in 2022 and then to finally kind of slowly go down so they're expecting inflation to go down half in 2022., if you believe them then buy the dip, if you don't believe them do not buy the debt, s p is continuing to run up right now, uh. So this this is a again. We met expectations.

The market did not get rug pulled and the market is happy about this uh. Remember folks, we talk about this all the time, not only on the channel. Oh, i mean. Obviously, we talked about this uh in the stocks in psychology.

Money course use that xmas coupon code before the price goes up at the end of christmas day, but we talk about this all the time on the channel. When are the prices the best to buy when uncertainty is at its highest point again? Why did most of my buying before this, but look at uh go back? Look at the s! P 500, for example, back in front of the election. Remember when we were worried about having a contested election and you go back to what was it october? Look at that october 2020, the dips we get over here in september and october 2020. I know right now those don't look very big, but then they were very painful, more painful than what we're experiencing now just worth remembering that uh when we think about uh investing.

It's it's times of fear and uncertainty. When people are leaving comments like oh, no, i'm gon na quit investing in stocks. Oh no, i'm catching a falling knife. Bull crap! That's the time to buy okay, keep going back here, so gdp expectations.

They are expecting slowing gdp. This is going to accelerate fears of stagflation, but it's worth noting that they actually think gdp is going to be a little slower in 2021 than initially expected, but look at this be a little bit hotter than expected in 2022.. Now that's counter to a lot. What a lot of people believe a lot of people believe we're going to see much more slowing in 2022 in terms of gdp, so this is actually bullish by the fed.

They are suggesting that, even though they are going to raise rates three times when previously, we expected zero rate increases for 2022. Even though we're going to raise rates three times in 2022, they still think gdp is going to grow faster than expected, and unemployment is going to go down more than expected, which is great, that's very, very good uh. I want to see the range okay, so this is the median expectation, but the range is also important, which is easier to see with the dot plot. But i want to look at the range of rates that we saw, so the range of rates we saw 0.9 was actually the highest part of the the expectations for rates, and some folks must have bet that rates would go up to 1.9.

So that was the range uh. Let's look at the dot plot, which is right here. Oh, this has moved so much. This is incredible.

Oh my gosh, okay, so we have every single member is in agreement. That rates are going to go up in 2022. That's a big change now again, wall street expected this, but that is a big change. Every single member believes rates are going to go up in 2022., so there's no doubt given that they control it, there's no doubt that rates are going up in 2022..

This is a unanimous signal that rates are going up at least once in 2022.. Look at this the consensus folks. That 0.9 is right here. That's your median! You do not have a lot of people that think we're gon na go more than three rate increases, but this right here folks this is three rate increases in 2022 uh and then they're, guaranteeing you basically at least one uh.

But if not two rate increases here in 2023, they're really charting this course here and then either that that one to two rate increases here in 2024, but you now have a guaranteed liftoff happening in 2022. At some point, keep this in mind. In fact. Actually, let's pull up the calendar here: uh federal reserve meetings schedule fomc uh, so they make these announcements yeah.

Here we go so in 2022. 20. 2020. Next year, 2022.

Okay, look at this folks. They need to raise rates three times in 2022, based on this dot plot. Look at their meeting schedule, folks, one two, three, four: five: six, seven eight! They only have eight meetings. So that means three out of every eight meetings.

Next year they are going to raise rates uh three out of eight for giggles. What is that 40? That's 38 of the meetings next year we expect rates to go up now now, let's, let's take this one step further: okay, we're not going to raise rates in january unless we fully tapered in january, we're not going to raise rates in march unless we've completed the Taper by then this is a question mark, i'm not sure. If we're going to raise rates here, i can say almost with certainty uh that by may as long as things stay the same, we're probably going to have our first rate increase in may. So i'm going to say, uh may we'll have our first uh and i think they'll be quick honestly, depending on where cpi is we could potentially have june for the second and then i'm gon na give it a breather and go november for the third.

So i'm going to write down, this is kevin's, guess which, for those of you investing in stocks means you should be insulated from rate increases until may, so, in other words, folks, cheap money is still coming. The party is still going till may uh. Now it is worth noting that that's kevin's guess, okay kevin's guess - could be entirely wrong because take a look at this. I just got a notification here that fed futures uh, fed funds, futures fed funds futures are indicating a 90 chance uh of first increase by april, which would mean that increase would happen in march, so that means uh march pass liftoff.

So that's the potential. So between march and may that's when we're going to get our first uh first lift off here, er. So, okay, then, let's see here what else do we have hold on somebody's ranting about transitory? Okay? Listen, the fed did not change course on transitory. Let's make this.

Like crystal clear, they stopped using the word because of political pressure by joe biden and the threat that jerome powell was going to lose his job, so they stopped using the word transitory. The federal reserve still thinks that high inflation is going to be transitory. How do i know that? Because they literally tell us right here - it literally says it right here: see high inflation oops, that's definitely the wrong thing. There we go high inflation right here, a 5.3 percent they expect to have in 2022..

So no the federal reserve did not change course and all of a sudden say: oh that's it! It's no longer transitory! That's not what they're saying they still think. It's transitory they're, just not using it, because it's bad politics, that's it! So just keep that mind when you think about the fact, like people are trying to brand this as a u-turn, especially like the right-wing media - and you know me - i bash both media. Okay, i sent a cease and desist letter to cnn, so i i think you can't be more in the middle if you're, bashing, both sides and bash everything uh, let's see here, i bash myself do uh. Okay, let's see here what else okay, these are.

This is just sort of these are just some more graphs reiterating uh some of the projections here, uh forecast uncertainty. I mean that's that this is no big deal really. The big piece of this puzzle is this particular chart here central tendency. Oh, i thought i'm sorry.

I miss red, so this is actually central tendency. The range this is what i was looking for here: uh sorry. This makes more sense this the range here. So there is somebody who does see rates of uh as high as of us breaking over one percent, potentially in 2022 and breaking two percent in 2023, but you see that more visually depicted right here.

So i want to just reiterate what we have here: uh jerome powell does speak in 10 minutes. I'm gon na go back and look at the sticks here in just a moment but uh. Let's just reiterate this really quick uh. We are expecting that in three out of the next eight meetings of the federal reserve, because we're done we're done for 2021.

That means probably not january, i would say, there's probably like a five percent of liftoff in jan okay, five percent chance of a liftoff in january. There's, according to the market, a ninety percent chance that we get liftoff in in uh march, basically uh, which, which is what the market thinks i think maybe may, but it's gon na be either march or may uh. Probably i just need to align with march and just be okay with it, but anyway, uh they're, guaranteeing us a rate increase in 2022, and it's it's likely going to be three rate increases in 2022, which means 38 percent of the meetings are going to have a Rate increase one to two rate increases in 2023, one to two rate increases in 2024. They do expect inflation to have in 2022.

Not only do they expect inflation to have in 2292, but with uh the rate increases. They expect uh gdp to actually go up, which is wild. Okay, now take a look at this smp literally bouncing off of our trend line. That's wild love, my trend lines.

If you want to learn how i write my trend lines join the stocks in psychology, money group never heard that one before we do have a little bit of a drawdown here on bitcoin now. My guess why? Why would it make sense that we see a little bit of a spy and bitcoin drawdown because we met expectations? People bought the dip now we're standing by for guess what powell talking in eight minutes powell's talking in eight minutes. Look at that trade desk went green. Nice, a little lumpiness over here.

Let's go oh c3ai's up, eight percent tesla tesla's still vacillating here so did run up to about 962. uh. Again i did my buying here 933. I did buy a little bit right afterwards, so uh now we've got where's arc bloomberg.

Just ran a piece about how most investors in rk are about to be upside down with it around 90 dollars. It did bounce back to about 92, so a nice expectation bump here very good matterport under 22. It's another deal here. If we get a santa claus rally, it's gon na be fun.

Look at robin hood folks! Folks, you might hate robin hood. Okay, you could hate the crap out of robin hood, i'm not telling you to buy and huddle this thing, but let me just put it this way. I put some yolos in on this thing and i'm not trying to pump it. I don't care if i'm wrong, don't listen to me.

I'm just saying you had 75 of the shares of robin hood released via a lockup in december, so you had a lot of shorting going into december and then when people could start selling, it pushed it to the bottom. Along with the uncertainty, i only see upside here, especially if they start releasing some more crypto updates anyway, my take okay. I've mentioned it done mentioning it now: uh, okay, jerome powell, six minutes to go for jay powell, roku still sitting at 199 here, roblox down 10 and that 96 is not bad big, kathy woodstock. There look at neo folks, nine point uh it's at 29.92.

I mean at some point you're gon na get to just overblown chinese fears here, but then again we thought that about alibaba. I never bought it because there was too much of a baby to get into the chinese stuff. But i remember when this thing was like under 200, like oh, my gosh alibaba under 200. It's such a value stock, it's like well, then you got china and then it's it's almost half that that which is just insane and that defies logic but but logic doesn't apply.

When you have uh, you know a government that that well doesn't operate with. Necessarily, i don't want to say, doesn't operate with logic, their own logic, they're doing what they think is best. You can't blame them for that uh cloudflare. Why? If you have not watched my video on the log for j hack watch cloud watch that video you will understand why i've got seven figures in in cloudflare uh.

It is pricey, though docusign bouncing here, nvidia, oh nice, bounce there on nvidia, that's like a two or three percent bounce there, uh yeah also pulling down a little wait hold on we're not on the miniature there. We go pulling down a little bit. Okay, brief kevin! I know i need, i need more coffee. I need more coffee got ta love those diamond hands.

These are the kind of days you wait for it's delicious. I love these days. I love fear and uncertainty. You love it so much uh.

I hate it. When stocks are skyrocketing, i hate it. That's what that's when people call me, mr fudd they're, like man, stop trying to take away the punch, bull man, okay, so jerome powell speaks in four minutes if you're just now, joining i'm gon na. Give you a very, very quick summary.

Okay, so quick, summary, okay uh, because jerome powell speaks in in four minutes. This is gon na be big, because jay pal could literally crash everything like we could think we got a good deal this morning. J-Pal could destroy everything all right. So here's a quick summary as to what the federal reserve just said.

The federal reserve is essentially guaranteeing us three rate increases for 2022.. I mean they're, guaranteeing us a rate increase for 2022, but they're pretty much saying yeah we're going to raise rate three times now. They only have eight meetings in 2022, which means they are going to raise rates likely three out of eight meetings in less than one of the meetings they raise rates essentially double fold, which i don't think they will do. That would be a little too too much for the market to handle.

That means 38 of the meetings that next year federal reserve is expected to raise rates. We then expect rates to go up one to two times in 2023 and one to two times in 2024. Now uh the federal reserve fed funds futures are expecting that we will have our first rate increase by april. The only meeting - that's not january at the beginning of the year, which the taper's not going to be done by january.

We don't expect. We expect the taper to be done in march, so that would mean the market is expecting interest rates to go up for the first time with a 90 chance of certainty according to the market in march. Personally, i think may, but the market might end up being right with this uh. That's that's a pretty high level of certainty.

Now, despite these three rate increases, the federal reserve has increased their gdp projection from 3.8 to 4 for 2022 and they expect that the unemployment rate will fall faster than they previously expected in september, when they thought the unemployment rate would go down to 3.8 percent of 2022, they think it's going to go down to 3.5. Now, a lot of folks complaining that the federal reserve is is u-turning on on their transitory claim, not exactly true. The federal reserve believes that inflation is going to fall from what they believe is an end of the year 5.3 level of inflation uh via pce, which we don't have yet all the way down to 2.6 in 2022, now, obviously they're low on the numbers. So far.

For 2021, but either way they're expecting a having in 2022.. So this gives you uh a sort of summary of what the federal reserve just said. Keep in mind. They are tapering they're, accelerating the taper as expected, and they're announcing these rate increases as expected.

Now jerome powell is going to start speaking in two minutes, so we're probably going to see a little bit more pain in the market uh because of jay pal, because people get nervous about what he's going to say. In fact, you could see just that. Look at that, the s p 500, hit our trend line and has literally you turned here so you're, going to get another bite at the apple to nibble. Keep in mind whether you did what we did in the course member live stream or earlier today and you went shopping for tesla uh in the low 930s or you went shopping for tesla at 9.60 or you're going for shopping for tesla.

Now at 9 40.. None of this matters like this is this is minor: okay, the difference of 30 on 930, just to make it very clear or 950 ish an average here. This is is roughly about what two and a half to three percent yeah three color, three percent: it's not that big of a deal we want to invest in the long term. For for big moves, i mean we're talking doubles here, right uh we want, and my price target for 2025 for tesla is 17.50, which means we're almost at a double uh, which works out to a compounded annual growth rate of 15 double uh between now and 20.

25 would be about 15, which is great, that's what we're investing in for the longer term uh. So, in my opinion, all of these these fluctuations here in price juicy. I want to increase my positions in these. That's why i'm buying that's why i bought before.

So i bought a little bit after and now i've got some more saved up just in case jerome powell decides to go ape on the market, uh or maybe i shouldn't say, ape - decides to go ham on the market and uh say some crazy stuff. Anyway, let's also look at crypto prices here, btc usd uh. We are sitting at look at that fall. Look at that you got expectations met people by the dip because we are at relatively decent prices, but but but wait.

Oh no j-pal's gon na talk in like 10 seconds. Oh no prices start falling uh, so we're going to jump on over to j pal's speech in just a moment. First he's going to give us a speech and then we're going to listen to the q. A i expect the most important portion is going to be the q, a not necessarily the uh, the actual speech so we'll see, but uh we are waiting for the federal reserve to begin their broadcast.

I have uh okay. Here we go. Are we going to their broadcast strongly committed to achieving the monetary policy goals that congress has given us maximum employment and price stability? Today, in support of these goals, the federal open market committee kept interest rates near zero and updated its assessment of the progress of the that the economy has made toward the criteria specified in the committee's forward guidance for interest rates. In addition, in light of the strengthening labor market and elevated inflation pressures, we decided to speed up the reductions in our asset purchases, as i will explain, economic developments and changes in the outlook warrant, this evolution of monetary policy, which will continue to provide appropriate support for The economy economic activity is on track to expand at a robust pace this year, reflecting progress on vaccinations and the reopening of the economy.

Aggregate demand remains very strong, buoyed by fiscal and monetary policy, support and the healthy financial positions of households and businesses. The rise in coveted cases in recent weeks, along with the emergence of the omicron variant, pose risk to the out risks to the outlook. Notwithstanding the effects of the virus and supply constraints, fomc participants continued to foresee rapid growth, as shown in our summary of economic projections. The median projection for real gdp growth stands at 5.5 percent this year and 4 next year, amid improving labor market conditions and very strong demand for workers.

The economy has been making rapid progress toward maximum employment. Job gains have been solid in recent months, averaging 378 000 per month. Over the last three months. The unemployment rate has declined, substantially falling six tenths of a percentage point since our last meeting and reaching 4.2 percent in november.

The recent improvements in labor market conditions have narrowed the differences in employment across groups, especially for workers at the lower end of the wage distribution, as well as for african americans and hispanics labor force. Participation showed a welcome rise in november, but remains subdued in part reflect reflecting the aging of the population and retirements. In addition, some who otherwise would be seeking work report that they are out of the labor force because of factors related to the pandemic, including caregiving needs and ongoing concerns about the virus. At the same time, employers are having difficulties filling job.

Openings and wages are rising at their fastest pace in many years. How long the labor shortage will george's will persist is unclear, particularly if additional waves of the virus occur. Looking ahead, fomc participants project the labor market to continue to improve with the median projection for the unemployment rate declining to 3.5 percent by the end of the year. Compared with the projections made in september, participants have revised their unemployment rate projections noticeably lower for this year and next supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation, in particular, bottlenecks and supply Constraints are limiting how quickly production can respond to higher demand in the near term.

These problems have been larger and longer lasting than anticipated, exacerbated by waves of the virus. As a result, overall, inflation is running well above our two percent longer run goal and will likely continue to do so well into next year, while the drivers of higher inflation have been predominantly connected to the dislocations caused by the pandemic. Price increases have now spread to a broader range of goods and services. Wages have also risen briskly, but thus far, wage growth has not been a major contributed contributor to the elevated levels of inflation.

That's good. We are attentive to the risks that persistent employees in excess of productivity could put to upward pressure on inflation. Like most forecasters. We continue to expect inflation to decline, to levels closer to our two percent longer run goal by the end of next year.

The median inflation projection of fomc participants falls from 5.3 percent this year to 2.6 percent next year. This trajectory is notably higher than projected in september. We understand 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 committed to our price stability goal.

We will use our tools both to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched. We will be watching carefully to see whether the economy is evolving in line with expectations. The fed's monetary policy actions have been guided by our mandate to promote maximum employment and stable prices for the american people. In support of these goals, the committee reaffirmed the zero to one-quarter percent target range for the federal funds rate.

We also updated our assessment of the progress the economy has made toward the criteria specified in our forward guidance for the federal funds rate with inflation, having exceeded two percent for some time. The committee expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the committee's assessments of maximum employment. All fomc participants forecast that this remaining test will be met next year. The median projection for the appropriate level of the federal funds rate is 0.9 percent at the end of 2022 about a half percentage point higher than projected in september, participants expect a gradual pace of policy firming with the level of the federal funds rate generally near estimates Of its longer run level by the end of 2024, of course, these projections do not represent a committee decision or plan and no one knows with any certainty where the economy will be a year or more from now.

At today's meeting, the committee also decided to double the pace of reductions in its asset purchases. As expected and spy is green again, we will reduce the monthly pace of our net asset purchases by 20 billion dollars for treasury securities and 10 billion dollars for agency mortgage-backed securities. If the economy evolves broadly, as expected, similar reductions in the pace of net asset purchases will likely be appropriate each month, implying that increases in our securities holdings would cease by mid-march a few months sooner than we anticipated in early november. We are phasing out our purchases.

More rapidly because with elevated inflation pressures and a rapidly strengthening labor market, the economy no longer needs increasing amounts of policy support. In addition, a quicker conclusion of our asset purchases will better position policy to address the full range of plausible economic outcomes. We remain prepared to adjust the pace of purchases if warranted by changes. Changes in the economic outlook and even after our balance sheet stops expanding our holdings of securities will continue to foster accommodative financial conditions.

To conclude, we understand that our actions affect communities. Q. A comes now across the country. Everything we do is in service to our public mission.

We at the fed will do everything we can to complete the recovery and employment and achieve our price stability goal. Thank you. I look forward to your questions all right. This is the important part.

This is the part that could derail everything go to rachel from the washington post. Thank you very much michelle and thank you, chair powell, for taking our questions. The latest fomc materials say that the fomc thinks it will be appropriate to keep rates near zero until labor market conditions, reach levels consistent with maximum employment, and there are also three rate hikes penciled in the projections for next year. In order to set up those hikes.

What will maximum employment have to look like? When will you know that that threshold has been met and how will that be communicated? Thank you, so maximum employment. If you look at our statement of longer-run goals and monetary policy strategy, maximum employment, it is something that we look at a broad range of indicators, and those would include include, of course, things like the unemployment rate, the labor force, participation rate, job openings, wages, uh flows In and out of the labor force and various parts of the labor force, we'd also tend to look broadly and inclusively at different demographic groups and not just at the headline and aggregate numbers. So that's a that's a judgment for the committee to make the committee will make a judgment that we've achieved labor market conditions consistent with maximum employment when it makes that it is. It is, admittedly, a judgment call because it's a range of factors, unlike inflation.

Okay, so far, nothing surprising in the statement, everything along expectations, spy heading back up. I still think that there are some beautiful by the dip opportunities we're going to keep listening here. In just a moment. I'm personally staying away from recoveries waiting for bigger u-turns on small caps, focused more on tech companies that are selling off whether that's snap, matterport, roku, tesla and phase square.

You name it. Let's keep listening uh. Thank you, mr chairman um. My question is: if it's often said that monetary policy has long invariable lags uh, how does continuing to buy assets now, even though it's at a slower pace, uh address the current inflation problem, good question: why are you still printing money if you've got all these inflation Expectations and you've got to raise rates three times.

Why don't you just stop? Now is really what this question is and use that xmas coupon code down below for my programs on building wealth, the long and variable lag after you end purchases sometime in march that you'll start to have any impact on the inflation problem. So on uh. The first part of your question, which is why not stop purchasing now, i would just say this: we've learned that we're in dealing with balance sheet issues, we've learned that it's best to take a careful sort of methodical approach, good to make adjustments markets can be sensitive To it - and we thought that this was this - was a doubling of the speed. Well we're basically two meetings away now from from finishing the taper, and we thought that was the appropriate way to go.

So we announced it and that's that's what will happen um. You know the question of long and variable lags is an interesting one. That's that's milton friedman's famous statement and um. I do think that uh in this world, where everything is or the global financial connect markets are connected together.

Uh financial conditions can change very quickly, and my own sense is that they get into financial conditions, affect the economy fairly rapidly uh longer than the traditional thought of you know a year or 18 months shorter than that rather um, but uh. In addition, when we communicate about what we're going to do, the markets move immediately to that, so financial conditions are changing to reflect uh. You know the the the the the forecast that we made and basically, which was i think, fairly in line with what markets were expecting, but uh financial conditions don't wait to change until until things actually happen, they they change on the expectation of things happening. So i don't think it's a question of uh of having to wait.

It's a really good question. He's basically saying: hey, look, don't worry about the 18 month thing markets are going to price in what we're doing right away and yeah kevin here says: buy real estate in january. That makes sense before rates go up, not raise rates until the taper is complete. Thank you yes, he's going to say yes, yes, the sense of that, of course, being that buying assets is adding accommodation and raising rates is, is a removing accommodation uh since we're two meetings away from completing the taper.

Assuming things go as as expected, i'll read this guy like a book, then what we'd? You would stop the taper potentially sooner, but it's not something i expect to happen, but uh i do. I do not think it would be appropriate and we don't. We don't find ourselves in a situation where we where we might have to uh raise rates while well, while we, while we're still purchasing assets. Okay, let's go to colby at the ft.

Thank you, michelle chair powell, i'm curious exactly how much distance you think there should be between the end of the taper and the first interest rate increase back in 2014. The guidance that was given was for the fed funds rate to remain at the target level. For a considerable time after the end of the asset purchase program, is that an approach you support she's, basically saying? Are you going to raise rates in march or may that's what she's asking it's a good question? So we we haven't, uh made any decision of that nature, and so no, i wouldn't say that's our position at all. We really haven't taken a position on that.

I will say that we did talk today. Uh. We had our first discussion about the balance sheet. For example - and we went through the way that the way the uh, the sequence of events, uh uh regarding uh, the runoff and that sort of thing with the balance sheet last time - and i think people thought that was an interesting discussion.

They thought that it was informative, but people pointed out that this is a significantly different economic situation that we have at the current time and that those the differences that we that we see now would tend to influence. How we think about the balance sheet and the same thing would be true about raising rates uh, i i don't um. I don't foresee that there would be that kind of very extended weight at this time. The economy is so much stronger.

I was here at the fed when we lifted off the last time and the economy is so much stronger. Now, it's so much closer to full employment. Inflation is running well above target and growth is well of a potential uh. There wouldn't be the need for that kind of long delay.

Having said that, uh, i i you know we'll we'll make this decision uh in coming meetings, and i it's not it's not a decision that the committee has really focused on yet he's. Basically saying march, the market did not like that: let's go to nick at the wall street journal a little drop here, no delay so not may saying march. Thank you, uh nick tamaros at the wall street journal chair powell. In march, you answered a question about maximum employment.

Like this, you said: four percent would be a nice unemployment rate to get to, but it'll take more than that to get to maximum employment. More recently, you have hinted at a possible distinction between the level of maximum employment. That's achievable in the short run versus in the long run. Has your view of the level of maximum employment changed this year and, if so, how and how close is the economy right now to your judgment of the short-run level of maximum employment? Thank you right.

So the uh, you know the thing is we're not going back to the same economy. We had in february of 2020 uh, and i think early on that was the sense - was that that that's where we were headed the post-pandemic labor market uh and the economy in general will be different and um the maximum level of employment. That's consistent with with price stability evolves over time within it, within a business cycle and over over a longer period, in part, reflecting um evolution of the factors that affect labor supply, including those related to the pandemic. So i would say: look we're we're at 4.2 percent.

Now and it's been, the unemployment rate has been dropping very quickly, so we're already in the vicinity of four percent um the the way in which the uh, which the the important metric that has been disappointing, really has been labor, labor. First, participation, of course, where we had widely thought. I had certainly thought that last fall as unemployment insurance ran off as vaccinations increased as schools reopened, that we would see a significant uh surge if you will - or at least a surge in uh labor force participation. So we've begun to see some improvement.

We certainly welcome the two-tenths improvement that we got in the november report, but i i do think uh that uh it's it feels likely now that the return to higher participation is going to take longer, and in fact that's that's been the pattern in past cycles that Labor force participation has tend to recover in the wake of a strong recovery in unemployment, which is what we're getting right now. So you it could well have been that this cycle was different because of the short nature of it and the very strong the number of job openings. For example. You would have thought that that would have pulled people back in, but really it's the pandemic.

It's a range of factors, but the reality is we don't have a strong labor force participation recovery yet and we may not have it for some time. At the same time, we have to make policy now and uh inflation is is well above target. So this is something we need to take into uh take into account. If i could, if i could follow up, you, you've talked recently about risk management, and so does that mean that the committee might feel compelled to raise interest rates before you're convinced that you've achieved the employment uh test in your forward guidance.

So this is. This is not at all a decision that the committee has made, but you're really asking a question about how our framework works, and, yes, there is a there's, a provision uh. It used to be called the balanced approach provision that says, in effect that uh in in situations in which uh the pursuit of the maximum employment goal and the price stability goal are not complementary uh. We have to take account of the distance from the goal and and the speed at which we're approaching it.

Just really quick translation he's basically saying look. Uh labor force participation while it keeps getting referenced in the media. It's not as important of a big deal right now, because we went through a pandemic kind of a unique recession quickly down quickly up uh yeah, we're not recovering as quickly as we thought. We would on labor force participation, but don't worry about it right now.

We got to focus on inflation and the unemployment rate is going down, which is good, so don't worry so much about labor force participation. Not something he's really worried about my thinking in my opinion, and i don't at all know that we will that that we'll have to invoke that uh that paragraph, but just as a factual matter. That is part of our framework and has been really for a very long time. Thank you.

Thanks, we'll go to howard at reuters, and just so you know, i've got the s p. 500, above my head. When you see this, so i guess i got ta. Ask about the elephant in the room, which is the uh omicron variant um.

You know this seems to already be pushing one of your colleagues, the bank of england off its course. Things have evolved very fast. There um hasn't quite hit the shores of the us in full force, yet that people seem to expect it to so. I'm i'm wondering in your feelings about this.

Are you convinced that this is going to be perhaps a more infectious but less serious variant of the virus, or are you simply confident that the us economy can continue its divorce from the panatomic? Well, i think, there's a lot of uncertainty, which is why we why we called it out in our statement, our post-meeting statement as a risk. It's we. We follow the same experts and i we we talk privately to the same experts that everyone else does and read. The same articles in the paper and the same research - and you know so the earl you you mentioned.

The early assessment is highly transmissible, perhaps not as severe some continuing protection from from existing vaccines and also existing immunity from having had the disease. That's a first draft. We're a long way from knowing what it will turn out to be. It may well come to the united states and replace delta as the dominant variant fairly quickly that that could easily happen um.

I i think, there's another step there, though, which is what's going to be the effect on the economy and that that will depend uh. You know on how much it suppresses demand, as opposed to some suppressing supply. It is not clear how big the effects would be on either inflation or growth or hiring um. It can on top of what what's already going on, which is quite a strong uh.

You know wave of delta, that's hitting large parts of the country across the northern united states and all the way to the eastern seaboard and now coming down we're having quite a wave of delta so coming in. On top of that, again, it's very difficult to say what the economic effects would be. I do think wave upon wave people are learning to live with this. More and more people are getting vaccinated, so people who get uh the new variant it affects them much less than than it tends to affect in the aggregate people who are not vaccinated.

So the more people get vaccinated, the less the economic effect it doesn't mean it won't have an economic effect delta had an effect of slowing down, hiring hiring and it actually uh. It had an effect on global supply chains and that that sort of uh that hurt the process of the global supply chains getting worked out, so it can have an economic effect. I i just think at this point. We don't know much we'll know a whole lot.

More in three weeks and we'll know more than that, in six weeks, in my opinion is basically saying look delta was bad for inflation. Delta was bad for unemployment delta, probably led to more inflation. Now we just don't know about omicron yet, but he made it very clear that uh people are quote learning to live with this and he's basically signaling. He doesn't think omicron is a big deal right now, the economy and and the amount the strength of demand.

The strength of just overall demand the strength of demand for labor um. Look at inflation. Look at look at wages. I i think moving you know.

Moving forward. The end of our taper by uh, a few months is, is really is really an appropriate thing to do, and i think really omicron doesn't doesn't really uh have much to do with that. Thank you. Let's go to gina at the new york times.

It'll be bad. If he was freaking out about omicron right, hey chairpal, thanks for taking our questions, i wonder if you could talk a little bit about what prompted your recent pivot toward greater weariness around inflation. Oh pivot sure she's asking about the u-turn, so i i guess i would go back and um. You know it's been a continual process.

Really uh um inflation really popped up right in the in the in the late spring last year and we had a view.