Welcome back boys and girls gorillas in the chat great to have you here. Welcome welcome, welcome great to have you we're gon na be watching the fed. Talk live when that eventually comes uh, and i'm excited to be doing that. We're gon na wait a couple minutes for people to stop in also i'm on hold with uh att right now.

So if i have to pause, uh or mute, my mic in the middle of uh stream, you're gon na know why uh that would be pretty much exactly why so uh just warning you guys ahead of time. If you hear any background noise, that's uh! That's what you're listening to so i apologize. I've been waiting to take care of the the problem that i want to take care of for about an hour and a half now, and i definitely got to get it done 0.75. I think so it seems likely.

There's been rumors of 0.75 leak, uh that got pushed out by by some sort of uh uh news having a hard time. Thinking with this on hold thing by a news source on twitter, and if that was the case uh, it is 7.75 hell, yeah, dude, you're, going to watch us uh go up hell yeah there. It is well the league came out and when it came out, the market started to see an increase in overall volume. So i'm interested to see what the fed has to say about that, but nonetheless uh we'll enjoy our day so update on me.

I'm gon na give you guys the quick sauce today. I've been working with att to uh uh take care of a few things. I had myself a can of monsters, my first energy drink in a couple of days, which i'm actually proud of myself on. Okay, usually i have more than a few uh, and i've had only one today, so that's a step in the right direction, not really going to go up on that faceus.

I disagree. I think that it will. I think that uh, the 75 basis points have been decently priced in and uh. I think you are going to go up.

I think that time will come watching the chart right now. It's pretty volatile, it's pretty wicked, but i guess time will tell it did reject directly off that 380. uh. So, looking at this right here, that's not a coincidence where it tapped right here and what a freaking wicked candle that it had as well down from 376 up to 384 swing.

Uh we'll see how she swings, but we're gon na give it a couple minutes for people to hop on in uh, and we will see uh see what people are up to good to see. You swole the sus fat guy. Little coat trace scared nut god. I love that name that makes me chuckle so much andy good to see you exerious yeah.

These candles are what you uh, what you get on uh fed days, man, farm seed days rate, hike days. Why 75 basis points good? It's not necessarily good right. Interest rates going up are going to be harder overall on the economy. It's only a matter of certainty and uncertainty right.

A lot of people were expecting 75 basis points, so if it actually meets expectation, that means that the market was able to price in ahead of time in advance uh what they expected the fed to do, and if you're thinking in terms of uh uncertainty versus certainty. Typically uh the market likes to react to things they expect uh. So if they expected 75 typically, they react positively to 75. However, right now the market is uh.

Doing this huge rejection off 380 push down back to 376 and it's uh. This is a pretty important level, a breakdown here and i think you're gon na get a negative reaction off of the fed news, so we'll see how she rock and rolls huh. How low can you go says bk, apparently very uh, but we are gon na be watching what the fed's got. Ta say about all this, i'm actually pretty interested.

I think they speak in about 25 minutes, so we'll prepare for that. Raising rates will destroy the economy. So scourger gaming necessary evil. They need to.

They really do your choices are quite simple: you raise rates uh and you have a short term kick in the nut, sack for the economy or you don't and you have a long-term kick in the nutsack for the economy. Uh, that's one of your choices here so uh not much, not much other other decision you can make, and this falls back on the fed, really being lazy and quite lethargic with their approach to combating inflation. I can only afford my slim pecker due to it yeah yeah bro. I get that i'm gon na get myself a glass of water, quick, we're just gon na wait for people to roll on in here and when they do we'll be ready.

Uh for the feds live talk quite interested to see how that goes. So, just give me one sec. We will uh we'll be ready man, i am uh, i'm a man that does not enjoy customer service. Let me tell you: i have been on hold with a t for a minute now: vic's moonshot, oh yeah, and it broke that trend line.

There's the breakdown, that's crazy, so this reaction right here that you're getting out of the spy tells us that uh they they thought that perhaps it was not going to be 75 because they say uh. This talk, this talk of uh everybody's expecting 75 basis. Point 75 basis, point 75 basis points, but if this is uh the reaction, if the sell-off is the reaction, that means that the market actually didn't expect 75 basis point hike, they expected less, which is really surprising to me. I find that to be an interesting sort of thought process.

What do you guys in chat think of the market's reaction to 75 bps uh, because this is something that people have been talking about for the last couple of days. It doesn't really seem like a shock or a surprise. Uh people actually, quite quite honestly, expected 75. uh.

The only thing that i can imagine i laid this out in yesterday's scenarios, there's sort of two things that i could imagine the market doing. Uh was this. I i i thought there was a possibility for two separate ways. This could go and i'll bring it back up.

Just to show you really quick, because i want to uh lay this out in a in a fair way. One of them was that you get an initial pricing, followed by a short-term rally out of the spy which you can see right here, 75 basis points announced. I thought dip then rip intraday final price in and move meaning that it would dip immediately. 175 basis.

Points was announced and then it would push up or it would be an immediate rip. I found this to be the less likely of the scenarios, but here's where we are uh immediate dip and then i would imagine, after this pricing a a short-term rally to the upside. But i suppose that time will tell uh, which is where we're at right now. So you're getting the immediate dip tap this 386 line, which is a fib level at 380, pushing down uh with high volume.

May i add this is some crazy, crazy volume, uh and now you're, just waiting on the follow through which i imagine is going to be uh the rip. I think that you're gon na get that initial price in for 7.75 worst case, followed by a push back to the upside uh, so we'll wait and see how that rips either otherwise uh hope you guys as day is going. I you know today is episode. Number 125 of the trader show it's great to have you back uh if i feel a little bit uh discombobulated it's because i'm trying to also listen to my uh, my phone, that's on speaker right now, uh and once that is taken care of so to speak.

Uh we'll be back here and ready to rock and roll so rip predictions. Will they respect trends and levels? I think they will uh. I talked about it before i'll say it again. I think that this 386 line, this 380 mark is really significant, and you can see it right here right.

Look how crazy this is that yellow circle is square on the nut sack like on the nut, sack you're tapping the nut hair of 380. on the dot yeah. I know it's 75 points. I know it is yup yup yup yup, yup yup.

I know it is. That's why i came back to here. Right 75 was announced, and these were the two scenarios that i saw for it dip then rip or an immediate rip, and i found this to be the less likely of the two uh. I thought that you had a more priced thin all priced in, but it does not appear that that is the case you're getting an intraday final pricing off of a certainty of 75 bps.

So there were some people who didn't believe in the fed. I guess uh. They didn't price in enough of that at least large institutions, big money, uh, and i think that you're gon na get this to follow. 380 is obviously a very important level intraday and we are going to watch what the fed has to say about how they're handling inflation.

I imagine that, watching this we're going to walk away with all sorts of uh interesting opinions about what they think yep amc is going strong, despite spy being annoying. Small mids are actually looking really good in comparison to the large caps, and that is a good thing to see he's lying. We don't have any nut here. Well, let me check quick hold up hold up you're wrong wait.

I definitely do i definitely do. Certainly. Certainly, you see a big move anytime soon, with amy. Ah i'll, come back to the charts and i'll show you this quick and we'll go over.

What things are looking like. This trendline is important, and this trend line's important uh short time frame, i'm looking at uh. If i come back to the hourly uh, you have sort of this falling trend line, which is a pretty decent significance, and it's attempting to break it right here, but has obviously failed. That breakout attempt taking touch point touch, point, touch, point uh and a break over this sort of short term downtrend will bring you an opportunity to come back up to that 14-ish dollar flat top mark, which is uh important, a rejection here.

I think you come back down and test this trend line at 11, 70 or so break under this trend line. I think you come back down to about 10 30. yup. You got 75 baby.

There we go a 69 bp hike dude. Can you imagine if they raised it? 6 900 points makes sense to me. Yep we're gon na watch powell uh waiting for it to pop up jerome powell live there. We go we'll prepare ourselves.

Let me get this switched over to my speakers. The correct way is there no sound there, we go nah chris, you don't want me as president, i'm too scraggly looking that wouldn't be good. Well now we wait, i suppose, while we're waiting, uh, i'm gon na be watching the desktop audio just to see if anything, pops up or not, but uh uh. That's what we're gon na do.

I think it starts in about 20 minutes or so yep. So there we go, we wait patiently fear index high yeah. Let's look at the vix reminder by the way, any time the vix is high uh. This means that you have increased risk uh on your trades right.

The way that i view the vix is quite simple: uh and i'll draw it out for you, anytime, you're approaching these levels up here. Your trades have significantly more risk than when you're down here right. Why? Because this is a volatility index. If you have increased volatility, which is when you see taps taps taps taps taps like so uh at these specific points, uh your your trade can whiplash a lot.

You can get stopped out very quickly. You can uh, you can get pushed out of a a good trade into a bad trade in a matter of seconds. Uh things can flip-flop very, very quick, so the vix is a good way to sort of measure. Your risk tolerance right when you're higher on the vix uh.

It makes sense to decrease size because you have increased risk. I think that's pretty important to uh to keep an eye on so i think we're almost out of the storm. To be honest, commanzo disagreed. I i i wholeheartedly disagree.

Uh, there's no change. Nothing's different chad. Ask yourself this question. I actually want to see your opinions on this.

Do you believe, there's a poll that's going to go up here. Really quick. Do you believe we're out of the storm, yay or nay? In my opinion, nothing's changed. We still face all the same problems, lamp on there.

She be the mistress nah, but there's there's there's too many economic things that haven't changed or improved right. If you think about uh inflation, if you think about the housing market which, by the way, is starting to teeter starting to teeter a little bit, if you look at housing right now, it's a little bit scary uh! You look at the state of savings accounts. You look at the state of debt. You look at the state of the supply chain, there's so many problems that are still out there and uh.

That's that's not ideal. Obviously, 0.75 has already been announced. Yep, i know daniel. I got you, i got you yeah.

I suppose i'll change the title, that's probably what you're referring to there. We go change it to fed on bps at 2 30. there we go nah, you're, good, daniel, no sweat, no sweat, no sweat i'll change. The title that way we all know i would have liked to see it at 100.

To be honest, so 92 percent of people are saying, nay, they do not believe we're out of the storm. Well, i'd like to know your reasoning as to why what about the economy? What about the stock market leads you to believe that you don't think we're quite out of the clear yet i'm in agreeance, i'm actually with you. I i personally believe that we are not out of the storm either, but i'd like to know the reasoning uh as to why, for those who voted nay today did they release the rate hike, yet they sure did nick .75. Here, i'm actually going to put this on the screen for you guys that way, it's just there and uh people know who come back 750 top right of your screen.

You'll see 75 bps announced i'll move over the top left. There we go. How low do you think amc will go? It depends entirely on the spy and how the market reacts to uh the fed, which so far is pretty uh, pretty identical to what i imagined as the the less likely of the two scenarios. But one of the two scenarios, i thought you would get an initial pricing or an immediate rip, but either way the same by-product, which is an immediate price and followed by a rip uh if you're playing puts on the spy right now.

I'd be very careful just be careful, i'm not going to tell you to play calls or to play puts. I personally have the belief that it'll go up ah, but be cautious. Just be careful. That's all i'm saying come back to the fed nobody's standing up there.

Yet we're waiting, can you explain what 0.75 means good or bad yeah? Okay, i'll explain that that's a piece of cake check it out! 0.75! Quite simply put - and i have this in the video that came out yesterday as well - a 75 bps or basis point hike. Bps is equivalent to a 0.75 increase on interest rates, so when you think about mortgages, when you think about business loans, or do you think about a car loan, oh my camera's froze f, f dude. Damn it brutal. You don't like my face like that.

Come on guys, oh, how should i surprise you when i come back like this all right, we back i'm going to flip it the other way because we're going to safari today, man, it's going to be a uh, a fiery storm out there, all right, 75 bps! Just means an increase of 0.75 on interest rates. If you think about a car loan, a business loan uh, you think about a mortgage. All these different things. You're gon na you're gon na find uh that these interest rate hikes are going to affect that.

So what effect does this have on the economy? Well, obviously, there's it means you're gon na have less cash. If you have uh a flexed, what the, if you have a flexed apr for example, or a flexible apr, these rates can change. You can see an increase on overall interest rates and this is probably affecting the housing market. May i add right.

We talked about uh before how the housing market's sort of in a bubble - i've made videos on this, and it's it's ready to go down. That's not even a hot take drop f's in the chat, because that's not anything groundbreaking. We all know this right uh, but this can be a catalyst to really push some people into home defaults which isn't good right. It's not a good thing.

It's rough on the economy. Did i join a 90s indie band, obviously boy? Obviously my son, the hat investor. Should i change my name huh petition to change my name to the hat investor yeah. I think so too.

I think this is a catalyst to push it. Slim dan and, if you think about it, if you drop things out right, there's sort of two options here which we've discussed before ignore inflation and keep the band-aid on or you push rates, either one's bad right. This is just more long-term bad long-term, and this is more of a short-term flash crash. Worry this pushing rates.

What is the problem we have now? Well, we printed money. Printing money pushed uh inflation, inflation pushed rate hikes rate hikes, can push uh housing market down, housing down can push stocks down, and you just run into this kind of circle effect. Where fear breeds fear breeds. Fear breeds fear until there's a sort of like a a a crash and burn and uh a euphoric rally, in which case i think we are going to see uh but got ta, give it time it's where we're at right now.

Slow bleed for the markets agreed kevin. I think you're gon na watch a slow bleed until it reaches capitulation, in which case you're gon na watch, uh sort of a big move, uh down, followed by the bottom right typically bottoms - are - are uh coming off of extreme extreme pushes to the downside, so red Box is rallying, let's check it. It's it broke a downtrend yeah. If that's worth anything to you, redbox did just break a downtrend low volume, though that's very, very low volume.

Here's a question for you guys right: we got about uh 10 minutes until the the fed talk begins. Would you rather they rip the band-aid off or slow and steady rip the band-aid or slow and steady and keep in mind right? Ripping the band-aid off is going to have a faster and more aggressive economic toll on the economy and a faster, more aggressive toll on stocks right versus, slow and steady, different answer. Slow and steady is more of a bleed uh. You won't.

You won't watch sort of the the the quick slappy in the face, uh risk to your mortgage uh, sort of problem that we've had in the past dip than rip, so the spy is doing man so far, but j-pal can always it up. We all know one thing about jay pound. That said, he loves to things up, so that's very possible. Slow and steady gives time to reassess that's true r williams, correct the risk of uh ripping the bandit off is if you rip it off too fast.

You risk uh deflation, look at vicks what a crazy ass candle look at this hulk, dicken dude, that's an erection candle. Let me drop the pattern for you really quick. It's actually a pretty easy one to to see you got this. You got that and uh.

Quite the pattern: huh, that's beautiful, hey! What's up mm thanks for stopping in dude yep, that's the old famous astro, patented and ball. You love to see it. We got about eight minutes until the fed begins its talk. Spy! Rejecting off of this trend line, i'm gon na draw this out just a hair, so you can see it up a little bit closer had a breakout here above rejection off this now uh.

If you're, looking at sort of the macro, we're gon na come out to about the hourly and look at what made the the spy stop at this specific level, and it looks to be the opportunity for the right side of an inverse head and shoulder now. This could get uh. This could get invalidated, but this right now looks like an inverse head and shoulder which would signal a short-term rally, at least on the hourly candle side of things. You've got the head here shoulder here shoulder here.

This is coming off of the blue trend line, which is about where it's respecting. If you want to get more exact, this would be about 370, 370 or so uh, and if it gets a bounce off of that, that would uh then signify the completion of the inverse head and shoulder. I personally believe that this is going to rally off of the dip, but we'll wait and see. We got ta wait for uh fed talk, baby n, nut bush villain thanks for the the sticker man.

I appreciate it. Spy stopped at vwop yep me and my other military veteran bro has been in this place since uh we're contracting in afghanistan. There you go bro, hey, i'm glad you came home, safe and sound huh. I uh.

I know that's not reconciliation for hard times and stuff, but i'm glad you came home, that's worth anything to you man should we all quit our jobs. Well, michael furberry. If you want to, if you want to fuel the the recession, then i've added experts. Can you uh her name, please all right, i'm back! No, i'm good guys.

I've been on hold for for uh a long time and they finally uh picked up. So i had to had to take care of that. I was muted on purpose atms. I had to be, i had to be all right.

Talk starts in three minutes by the way, thanks for the uh, the 20 sticker earlier, i saw that uh. I appreciate it. James thanks homie yeah how's, the call with flashlight customer support. What can i say you guys know me, i'm not muted ken griffin, you would know if i was on the phone with you.

Wouldn't you come on man. We were just weird. We were just talking. I thought you knew yeah man, uh t-minus, two minutes fed talk.

Will begin unless he's uh late, i think that's more of bo giden's thing not being on time to his own conferences, but i don't know much that could be wrong here. Uh we'll see how she rips this was my prediction. I am of the belief that you will get if this is scenario, one that you will get uh a dip and then a rip. I think that the market is anxiously waiting for j-power to talk just seen a thanos meme with jay powell as the face hey.

He could up anything huh if j powell so much as farts in the wrong direction. The markets take a big dump, so uh we'll see what comes out of his mouth man. If he's hyper hyper bearish on the market he's like we have no control the fed. Can't do it yeah yeah.

Well, then, you already know what's going to happen, but yep there you go expend the biggles j-pal could up a wet dream. Dude j-pal j-pal could uh could up eating a bowl of cereal. He he uh. You typically put cereal and milk in a bowl right, but what if he tried putting the bowl in the cereal? That's something that seems like j-power.

Do you know they should rip it? The economy already sucks ass, i'm with you man. I think they got ta rip. It grip it and rip it dude. That's it t-minus, one, hey.

How are you doing yep? Can you hear me you good afternoon? I will begin with one overarching message lead to do so. We have both the tools we need and the resolve that it will take to restore price stability on behalf of american families and businesses. The economy and the country have been through a lot over the past two and a half years and have proved resilient. This is loud as it gets chad.

It is essential that we bring inflation down if we were to have a cleaned period of strong labor market conditions that benefit all from the standpoint of our congressional mandate to promote maximum employment and price stability. The current picture is plain to see: the labor market is extremely tight and inflation is much too high. Against this backdrop, today, the federal open market committee raised its policy interest rate by three-quarters of a percentage point and anticipates that ongoing increases in that rate will be appropriate. In addition, we are continuing the process of significantly reducing the size of our balance sheet.

I'll have more to say about today's monetary policy actions. After briefly, reviewing economic developments overall economic activity edged down in the first quarter as unusually sharp swings in inventories and net exports. More than offset continued strong underlying demand. Recent indicators suggest that real gdp growth has picked up this quarter with consumption spending remaining strong.

In contrast, growth in business, fixed investment appears to be slowing, and activity in the housing sector looks to be softening in part, reflecting higher mortgage rates. The tightening and financial conditions that we've seen in recent months should continue to temper growth and help bring demand into better balance with supply. As shown in our summary of economic projections, fomc participants have marked down their projections for economic activity with the median projection for real gdp growth running below 2 percent through 2024, the labor market has remained extremely tight with the unemployment rate near a 50-year low job vacancies. At historical highs and wage growth elevated over the past three months, employment rose by an average of 408 000 jobs per month down from the average pace seen earlier in the year, but still robust improvements in labor market conditions have been widespread, including for workers at the Lower end of the wage distribution, as well as for african americans and hispanics labor demand, is very strong, while labor supply remains subdued with the labor force, participation rate little changed since january.

Fomc participants expect supply and demand conditions in the labor market to come into better balance. Easing the upward pressures on wages and prices. The median projection in the sep for the unemployment rate rises somewhat over the next few years. Moving from 3.7 at the end of this year to 4.1 percent in 2024 levels that are noticeably above the march projections, inflation remains well above our longer run goal of 2.

Over the 12 months ending in april total pce prices rose 6.3 percent, excluding the volatile food and energy categories. Core prices rose 4.9 percent in may. The 12-month change in the consumer price index came in above expectations at 8.6 percent, and the change in the core cpi was 6 aggregate demand is strong, supply constraints have been larger and long lasting than anticipated and price pressures have spread to a broad range of goods And services, the surge in prices of crude oil and other commodities that resulted from russia's invasion of ukraine is boosting prices for gasoline and food and is creating additional upward pressure on inflation and covet ready covert. Related lockdowns in china are likely to exacerbate supply chain disruptions.

Fomc participants have revised up their projections for inflation this year, particularly for total pce inflation. Given developments in food and energy prices, the median projection is 5.2 percent this year and falls to 2.6 percent next year and 2.2 percent in 2024.. Participants continue to see risks to inflation as weighted to the upside. The fed's monetary policy actions are guided by our mandate to promote maximum employment and price and stable prices for the american people.

My colleagues and i are acutely aware that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing and transportation. We are highly attentive to the risks high inflation poses to buy both sides of our mandate and we're strongly committed to returning inflation to our two percent objective. Against the backdrop of the rapidly evolving economic environment. Our policy has been adapting and it will continue to do so.

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

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

The median projection for the appropriate level of the federal funds rate is 3.4 percent at the end of this year, a percentage point and a half higher than projected in march and point nine percent through the median estimate of its longer russia. The median projection rises further to three point: eight percent at the end of next year and declines to three point: four percent in 2024, still above the median, longer run value. Of course, these projections do not represent a committee plan or decision, and no one knows with any certainty where the economy will be a year or more from now. Over coming months, we will be looking for compelling evidence that inflation is moving down consistent with inflation.

Returning to two percent, we anticipate the ongoing rate increases will be appropriate. The pace of those changes will continue to come in the outlook for the economy. Clearly today's 75 basis point increase is an unusually large one and i do not expect moves of this size to be common from the perspective of today, either a 50 basis point or a 75 basis, point increase seems most likely at our next meeting. We will, however, make our decisions meeting by meeting and will continue to communicate our thinking as clearly as we can.

Our overarching focus is using our tools to bring inflation back down to our two percent goal and to keep longer-term inflation expectations well anchored. Making appropriate monetary policy in this uncertain environment requires a recognition that the economy often evolves in unexpected ways. Inflation has obviously uh surprised to the upside over the past year, and further surprises could be in store. We therefore will need to be nimble in responding to incoming data and the evolving outlook, and we will strive to avoid adding uncertainty to what is already an extraordinarily challenging and uncertain time.

We are highly inten, attentive to inflation, risk risks and determined to take places necessary to restore price stability. American economy is very strong and well positioned to handle tighter monetary policy brendan with the data. 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 federation. He really is nervous employment and price stability goals. Thank you and i look forward to your questions. Uh.

Thank you, howard schneider, with reuters, um uh, two related questions. Uh chair powell. Do you feel you uh boxed yourself in with the language you used at the last press conference on a 50 basis, point hikes in june and july, and would you please give us uh as detailed a sense you can of what role you played uh in reshaping Market expectations so quickly on monday, we saw the markets melting. As you know, we we uh always aim to provide as much clarity as we can about our policy intentions, subject to the inherent uncertainty in the economic outlook, because we think monetary policy is more effective when market participants understand how policy will will evolve when they understand Our objective function, our reaction function, um and, in the current highly unusual circumstances, with inflation.

Well, above our goal, we think it's helpful helpful to provide, provide even more clarity than usual dip pricing against uncertainty in the outlook so um, and i think, over the course of over the course of this year. Financial uh markets have responded, uh and and have generally shown that they understand the path where we're uh we're laying out it. Of course it remains data dependent um, and so that's what we generally think about guidance and that's why we offer it and of course, when we offered that when i offered that guidance uh at the last meeting, i did say that it was subject to the economy. Performing about in line with expectations, you had expectations.

If the economy performed. If data came in worse than expected, then we would consider moving even more aggressively. So we got the we got the cpi data and also some data on inflation expectations late last week and we thought for a while and we thought well. This is the appropriate thing to do so.

Then the question is: what do you do and do you wait? Six weeks to do it at the next meeting - and i think the answer is that's not where we are with this, so we decided we needed to go ahead, and so we did and that's really that's really how we made the decision. Thanks for taking our questions. Gina smiling with the new york times you. I guess i wonder if you could describe for us a little bit how you're deciding how aggressive you need to be so obviously 75 today, what did 75 achieve that 50 wouldn't have and why not just go for a full percentage point at some point sure.

That's a better question. So if you take a step back, what we're looking for is compelling evidence that inflationary pressures are abating and that inflation is moving back down and we'd like to see that in uh, in the form of a series of declining uh monthly inflation readings. That's what we're! Looking for by this point uh, we had actually been expecting to see clear signs of at least inflation flattening out and ideally beginning to decline. We've said that we'd be data dependent, focused on incoming data, highly attentive inflation risks.

The things that i mentioned um to howard moments ago, so, contrary to expectations, inflation again surprised to the upside indicators. Some indicators of inflation expectations have risen, uh and projections of this year have moved up, notably, so we thought that strong action was warranted at this meeting and today we delivered that 75 basis, point rate hike as i mentioned. So what was the the point of it? Really is this um we've been moving rates up, uh expeditiously to more normal levels and over the course of the seven months since we, since we pivoted and began moving in this direction, we've seen financial conditions tighten and appropriately so, but the federal funds rate, even after This move is at 1.6 percent. So again the committee is moving rates up expeditiously to more normal levels and we came to the view that um we'd like to do a little more front end on that.

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

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

As we see it. If things are better, we don't need to do that much it so and if they're not, then we you know either do that much or possible even more, but in any case it will be very data dependent, then you're looking at next year and what you're seeing Is people see more a bit more tightening in in a range of maybe three and a half to four percent, and that's generally, what people see as the appropriate path for getting inflation under control and starting back down and then getting back down to two percent i'll Walk through it after 75 basis points seem like the right, the right thing to do at this meeting and um and uh that's what we did steve leesman cnbc. Thank you for taking my question, mr chairman um. You have not used the phrase in a long time.

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

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

You can look at the effect you're having on the economy rates, asset prices, credit spreads. All of those things go into that you can. You can also look at the yield curve and ask all along the yield curve. Where is where is the policy rate so for much of the yield curve? Now real rates are positive.

That's not true at the short end, at the short end of the yield curve in in the early years, you don't have real net. You have negative rates still so, but that really is one data point it's one part of financial conditions, so i i think you i i have to look at it this way. We move the policy rate that affects financial conditions and that affects the economy. You know we have, of course, ways rigorous ways to think about it, but ultimately it comes down to do.

We think financial conditions are in a place where they're having the desired effect on the economy and that desired effect is we'd like to see. You know demand moderating. Demand is very hot. Still in the economy, we'd like to see the labor market getting better in balance between supply and demand, and that can happen both from supply and demand.

Right now, there's demand is substantially higher than than available supply, though, so we feel that there's a role for us in moderating demand. Those are the things we can affect with our with our policy tools. There are many things we can't affect uh and - and those would be you know the things - the the commodity price issues that we're having around the world due to the war in ukraine and um, and the fallout from that, and also just the all of the supply Side things that are still you know pushing upward on inflation. So that's that's really how i think i would think about it.

Four percent get it done. I think it's certainly a in the range of plausible numbers. I think we'll know when we get there really. I mean honestly that that would be.

You would have positive real rates. I think in inflation coming down by then i think you'd have positive real rates across the curve um. I think that you know the neutral rate is pretty low these days so uh i i would think it would, but you know what we're going to we're going to find that out. Empirically we're not we're not going to be completely model driven about this.

We're going to we're going to be looking at at this keeping our eyes open and reacting to incoming data both on financial conditions and on what's happening in the economy. Thanks nick timmeross of the wall street journal, uh charpelle you've said that you, like your policy, to work through expectations and now. Obviously, this decision was something quite different from how you and almost all of your colleagues had set those expectations during the intermediating period, and i know you just said that what changed was really the inflation data, the inflation expectations data, but i'm wondering on the inflation expectations Data was there something you saw that was unsettling enough to risk eroding the credibility of your verbal guidance by doing something so different from what you had socialized before. So if you look at it, we look at a broad range of inflation expectations, so you've got the public.

You've got surveys of the public and of experts and you've also got market based, and i think, if you look across that broad range of data, what you see is that expectations are still in the place very much in the place where short term inflation is going To be high but comes down sharply over the next couple of years, that's that's really where inflation expectations are and also as you get away from this episode, they get back down close to two percent, and so this is really very important to us that that remain The case - and i think, if you look for most measures most of the time - that's what you see to even if we even see a couple of indicators that that bring that into question. We we take that very seriously. We do not take this for granted. We take it very seriously, so the preliminary michigan reading it's a preliminary reading.

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

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

I think so. I i wouldn't want to put a number on what that might be. The main thing is to get to get rates up and and then pretty soon, we'll be in an area where we're. Where we're.

I think, as you get closer to the end of the year you're in you're in a range where you've got restrictive policy, which is appropriate, 40 40-year highs in inflation. We think that policy is going to need to be restrictive and we don't know how restrictive. So i think, that's how we'll take it. Uh hi chair pal neil irwin from axios, thanks for taking our questions, um the the late breaking kind of decision to go to 75 basis points.

Uh. Do you worry that that will make policy guidance a less effective tool in the future uh, and should we think of that as a kind of symmetrical reaction function? If we start to get soft readings on inflation or if the labor market starts to roll over? To take your second question first, yes, i mean, i, i think, we're again we're we're going we're resolved to take this on, but we're going to be flexible in the implementation of it. Sorry and your question was guidance so again. The the overall exercise is that we try to be provide as much clarity about our policy intentions as we can, because we think that makes monetary policy work better.

There's it's always a trade-off, because you have to live with that guidance and um. So you do it and it helps a lot of the time. I frankly think this year has been a demonstration of how well it can work. We, you know with the with us, having really just done a very little in the way of raising uh interest rates.

Financial conditions have tightened quite significantly through through the expectations channel, as we've made it clear what our plans are. So i think that's been a very healthy thing to be happening so and - and i would hope that our that are it's - it's always going to be any any guidance that we give is always going to be subject to things working out about, as we expect and In this particular situation, you know we're we're looking for something specific, and that is progress on inflation. We want to see progress, we want to see inflation can't go down until it flattens out and that's what we're looking to see and and if we don't see that, then that's the kind of thing that we'll call. Even if we can, we don't see progress for a longer period that could cause us to react, but we will we will soon enough.

We will be seeing some progress at some point and and and we'll react appropriate to that too. But i would. I would like to think, though, that our guidance is still credible, but it's always going to be conditional. This is an unusual situation to get incredible late in in during blackout, pretty close, very close to our meeting very unusual to one that would actually change the outcome so um.

I i've only seen in my 10 years plus here at the fed. I've only seen something like that, even close to that one or two times, so i don't think it's something that will come up a great deal. Thank you so much for taking our questions. Colby smith, with the financial times on the clear and convincing threshold for the inflation trajectory.

What is the level of realized inflation uh that meets that criteria, and how is the committee thinking about the potential trade-off of much higher unemployment than even forecast than even what's forecasted? In the scp, if inflation is not moderating, you know at this acceptable pace. Sorry, the second part i didn't get um. If uh, you know, what's the potential trade-off with higher uh unemployment than even what's forecasted in the scp, if inflation is not moderating at an acceptable pace right, so what we want to see is, is you know a series of declining i'll walk through everything about the Talk when it's over and we'd like to see inflation headed down so um, but you know and right right now our policy rate is well below neutral right. So soon enough, we'll we'll have our policy rate.

Let's assume the world works out about, like the scp says, the policy rate will be up where we think it should be, and then the question would be: do you slow down? Does it make you you know that you'll be making these judgments about? Is it appropriate? Now, to slow down from 50 to 25, let's say or speed up. You know that so that's the kind of thinking slow down really again. Ultimately, we're not going to declare victory until we see a series of these. You know really see convincing evidence compelling evidence that inflation is coming down and that's what i mean by that's what it would take for us to say.

Okay, we think we think this is this job is done because we saw - and frankly we saw last year, inflation came down over the course of the summer and then turned right around and went back up. So i think we're going to be careful about uh about declaring victory, but our again the implementation of our policy is going to be flexible and sensitive to incoming data. Are you more concerned now that uh to bring down inflation, it's going to require more than just some pain at this point? So again, i think that i do think that uh their objective - and this is what's reflected in the scp, but our objective really is to bring inflation down to two percent, while the labor market remains strong. I think that um, what's becoming more clear, is that that many factors that we don't control are going to play a very significant role in in deciding whether that's possible or not, and there i'm thinking, of course, of commodity prices.

The the war in ukraine uh supply chain things like that, where we really we really can't the monetary policy stan. You know stance doesn't affect those things so, but having said that, there is a you know: there's a path that the there's a path for us to get there um it's not getting easier, uh, it's it's getting more challenging because of these external forces and that that Path is to to move demand down, and you have a lot of surplus demand in take, for example, in the uh in the labor market uh. So you have two va job vacancies, essentially for every person seek actively seeking a job, and that has led to a real imbalance in wage negotiating you, you could get to a place where, where that ratio was was a more at a more normal level and you Wouldn't ex you would expect to see those wage pressures move back down to levels. People are still getting healthy, wage increases, real wage increases, but at a level that's consistent with two percent inflation.

So that's that's a possibility and you could say the same thing about some of the product markets where there's just excess capacity, and you know where the really where the the strong demand has gone into. Sorry, where there's, where there's their capacity constrained right. So you have effectively what we think of as a vertical supply curve or close to it. So demand comes in and it's very strong and it shows up in higher prices, not not higher quantities, not more cars, because they can't make the cars because they don't have.

The semiconductors so in principle that could work in reverse when demand comes down, you could see and it's not guaranteed, but you could see prices coming down more than the typical economic relationships that you see in the textbooks would suggest because of the unusual situation, we're in On the supply side, so there's a pathway there. It is, it is not going to be easy man, you sound so freaking, they're unconfident objective is vocabulary, is significantly different than it used to be. As i mentioned, it's going to depend to some extent on factors. We don't control hi, chair powell, thank you for taking our questions.

Rachel siegel from the washington post volumes as loud as it goes directions show. The unemployment rate ticking up through 2024 is a higher unemployment rate necessary in order to combat inflation and what is lost if the unemployment rate has to go up and people lose their jobs in order to control inflation. Thank you so you're right in the in the scp, we have unemployment going up to four point. The median is, is uh is four point one percent there, of course a range of of of actual forecasts, and i i would characterize that if you, if you were to get inflation down to you, know on its way down to two percent and the unemployment went Up to rate went up to four point: one percent: that's still a you know, historically low level.

You know we hadn't seen. We hadn't seen rates unemployment rates below four percent until a couple years ago for we'd seen it for like one year in the last 50.. So the idea that you know 3.3.6 is historically low in in the last century, so a 4.1 unemployment rate with inflation well on its way to two percent. I think that would be.

I would. I think that would be a successful outcome, so we're not looking to to have a higher unemployment rate, but i would say that we, i would certainly look at that as a successful outcome. You know we're not again we're not. We don't seek to put people out of work.

Of course, we never think too many people are working and fewer people need to have jobs, but we also think that you, you really cannot have the kind of labor market we want without price stability, and we have to. We have to go back and establish price stability, so we can have that kind of labor market and that's a labor market. Where um you know where workers are getting wage increases. Maybe maybe the workers at the lower end of the spectrum are getting the biggest wage increases as they were before the pandemic, where participation is high, where there's lots of job opportunities, where it's just a really, i mean the labor market we had before the pandemic.

Was. That's what we want to get back to, and you see you see you know - disparities between various groups at historic lows, we'd love to get back to that place, but to get there, it's not going to happen with you know, with the levels of inflation we have So we have to, we have to restore that and um. It really is in service. Now it's moving in the medium and longer term of the kind of labor market.

We want and hope to achieve. Hi chair powell, matthew boeser with bloomberg um. So, as you just mentioned, the committee is now projecting a half percentage point rise in the unemployment rate in the scps over the next couple years, and it removed a line from its policy statement about thinking that the labor market can remain strong. While it tightens policy, you just mentioned that that is still your objective, though so i'm wondering if you could explain why that line was removed from the statement, also whether um this means that fbc is trying to induce a risky questions and stop bringing inflation down.

Absolutely not trying to reduce induce a recession. Now, let's be clear about that, we're trying to achieve uh, two percent inflation consistent with a strong labor market. That's that's what we're trying to do so. Let me talk about that sentence um.

Clearly, it's our goal to bring about two percent inflation while keeping the labor market strong, right and - and that's that's kind of what the scp says - that the scp has inflation getting down to two to a little above two percent in 2024, with with unemployment at 4.1 Percent so - and this is a strong labor market - this is a good labor market um and, as i mentioned, there are pathways to do it, but those pathways have become much more challenging due to factors that are not under our control again.