FOMC LIVE - 19th June 2019

Okay, just testing out the microphone, making sure everything is working correctly, the video feed. You can see and hear everything okay. So Andy, John, Mickey, Rabina, how are you, Rabina? I haven't spoken to you in a while. Abdallah, hope everyone is well. As I said in the chat just a moment ago, the session begins at 6:30, so got about 7 minutes and then I'll begin the kind of formalities, we'll do a preview, what it is exactly that we're, we're looking for. Obviously we've got a bit of an idea, we're expecting the Fed to be dovish, but the question is how are they going to achieve that and how might the markets react. So we'll kick everything off at 6:30 in about 6 minutes' time. Any questions in the meantime, feel free to post them in the chat room. I can see that chat, as can Sam, Charlie, say some of the rest of the guys on the application. My team as well. So any questions in the meantime, just put them in the chat room. Hey Tim, how's it going? Just for any, anyone logging in, you can see a couple people in the chat room. Some of those handsome fellas— Sam North, he's our associate here, he's going to be jumping on the mic talking about technicals as well. Tim Duggan is our man in Dublin, so Tim works with us quite closely and works in terms of kind of the elite performance and some of our more experienced traders. So Tim's in the chat, feel free to ask him lots of questions. Sam likewise. There's gonna be other guys as well on the team as well as lots of other people taking part. So everyone's kind of getting logged in. We've got about 4 minutes before we start kicking things off. The plan of action again, just to reiterate, I'm gonna do an opening preview for about 20 minutes. So I'll hand you over to Sam. So as I'll explain, the way this works is You know, I specialize in kind of fundamentals, Sam technicals. So we'll both give our two pence about what we think is going to happen. Um, and then we're going to play the squawk and the news real time as it comes out. Um, as you can hear, there's a coffee machine in the background. So if there is lots of background noise, that's because people are getting their caffeine ahead of the main event. Um, hopefully they can control that, that those caffeine flowing through their veins. When the real action begins in about half an hour. But yeah, we'll cover the event in live, in full. We will then— I'll be covering this in an immediate fashion, in real time, as things are unfolding. I'll tell you when we start the session what charts I've got in front of me and why I'm looking at them. And then we'll review. So the part 1 of the event is at 7, part 2, the press conference, at 7:30, and then we'll look to wrap things up about 7:45 London time. But yeah, we got a few minutes, so yeah, any other questions, let me know in the chat room. In the meantime, we'll probably look to address majority of the questions. The guys will be jumping in the chat and talking to you, but I can also address them at the end. If there's any questions for me specifically or about Amplify and what we do, just let me know. Sebastian, no problem at all, you're welcome. I know that you, um, you often comment on some of the videos, so thanks very much for following us and And thanks for watching the videos. I very much appreciate it. Hello. Yeah, thanks, Tim. That's, um, thanks, Tim. That's, uh, I'll address the dollar and what would happen. You know, they're kind of definitely, as you all know yourself, one of the key things here is about understanding all the different permutations of what could happen, different scenarios, 100% critical for understanding then how you— how to approach and be reactive to these types of events. So for sure I'll cover that when we get— when we get underway. 2 minutes then and we'll start. Alright, let's— 6:30 London time, let's get the show on the road. First off, thank you very much for those who've logged in, great to have you with us. I'll give you a quick overview of, for those who don't know me, who I am, my role at Amplify. So my name is Anthony, as you can probably see on the screen. I'm the head of market analysis. So again, just to be clear, head of market analysis. So I'm not trading this event. I'm here as those who are maybe professional prop traders, maybe if you've ever done this more seriously, as you'll know that you rely quite heavily on guys like me, the analysts, to understand quite complex events like a monetary policy event, say from the Federal Reserve, like we're about to witness. I'm supposed to know the language, the scenarios, the potential impacts, and so the role is to support the function of then traders to execute. So we kind of bounce off each other. This has been my career for the past 14 years. Working for various different clients from hedge funds, investment bank desks, to proprietary trading firms, and so on and so forth. So hopefully what I can add for you guys is a little bit of my approach to how I would logically go through what is ultimately quite a complex event, but my objective here is to make it as simple and as actionable as possible so that these events can become more tradable as you develop and get better and more confident with your abilities in time. One thing to be clear from the start before I begin the actual preview of the content is that trading these types of events are notoriously difficult. It's a high volatility event, it comes with a great degree of risk then by association, and only I would say you would want to be trading this type of event with any real kind of live funds of size until you are more experienced. But you only really get to that point by watching, observing, reviewing, trading on a simulated account multiple times, and then kind of building it up gradually. But we'll get on to a lot of this at the end of the session. Let's push on and let's talk about what we're all here for, which is these guys, the US Federal Reserve. And we're going to hear specifically from the FOMC, the guys on the committee who set monetary policy in America. So I'm going to run through— hopefully I can wrap this fairly prompt in about 15 minutes— of the fundamental view of what we're looking at and how to decipher the information that's coming out. And then my colleague Sam, who's much more, I would say, reliant in his execution of how he trades— he's a trader here— uh, from a technical perspective, So very important to get both sides of the, the kind of view of how to tackle these things. So first of all, here's the order of play. What are we looking out for coming up? And so in 27 minutes we get part 1. Very, very important to remember this is a 2-part event. Part 1, we get the interest rate announcement from the US Central Bank. We get the statement, which is going to be particularly important because we are looking for quite a number of changes here. and I'll run through what those changes could be and their implications. Then we're looking for the summary of economic projections. This is the, the Fed's forecasts for things like particularly inflation, growth, but also unemployment, for example. But the main one being the interest rate. What do the Fed and their policy setters see for interest rates at the end of this year, next year, '21, and in the long term could give us a very clear idea of the trajectory of that curve to how hawkish or dovish this announcement could be perceived. The second part is the press conference. So we have an opening statement, and he then goes into— this is Jerome Powell, the Fed chair— into a Q&A session that normally lasts about 45 minutes up to 1 hour. And as I'll go into explain It's normally the first few questions that are ultimately the most important. All right, let's have a look at a couple of ideas then and things to be aware of in order to kind of navigate this type of event. And the first is something called— I've kind of classified it— the code words. Now, if you're not familiar with central bank communication, then it's kind of like learning a language to some respect. Certain words are kind of hinting towards potential policy action that could be immediate, that could be medium, long term. And what happens here is the Fed have a fixed structure on about a 500-word page, so one-pager, that specifically explains their expectations around inflation, unemployment, growth, and ultimately what they've done then as a byproduct of that with their decision for interest rates for that moment in time. Now, what we look at then as market participants are what are the potential word changes that could signify as a hint then forward guidance to future action. Now, some of the key ones here I've tried to pick out, and that is the Fed could drop its commitment to being patient. Now, that might not mean a lot to some of you, so what I've got here is what the statement looked like last time. And I know it's quite small, so I'll talk you through it. But where that phrase was used before was in one of these main phrases here. And if I read it out to you, it will make a little bit more sense in terms of this idea of patience. And so here, in light of economic— global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to target the range for federal funds rate, the interest rate. Now, one thing is here is that they're saying before was this idea of inflation being transient, i.e., weaker inflation that we've had in the US recently is only a short-term phenomenon. And because unemployment is so healthy in America and the tightening of the labor force, we believe that ultimately that will transpire into a higher level of inflation back to target. So we're being patient with our policy stance. Remember, currently the Fed are telling us through their last projections in March that there's going to be no rate hikes in terms of this year. So could they drop patient? And I think that that is going to happen. And by dropping patient, that is a one nod towards being dovish, which we are overall expecting as the end outcome. I.e., not being patient, being a little bit more responsive by using words like down at the bottom, which Jerome Powell said himself only a few days ago on the 4th of June, that the Fed is closely monitoring trade negotiations and risks to the US outlook and will act as appropriate to sustain the expansion. Now, this is the art of understanding central bank communication. It's a very subtle change in reality, but in central banking terminology, this is, this is quite a swift change towards the Fed paying heed more to the considerations of particularly external risks like the trade war, of course, which we've seen. Obviously, we've had a positive tweet from Trump yesterday which has kind of put the deal back on, but ultimately it's been quite negative the last few weeks. And so how is that impacting the US economic outlook? The other thing here is, uh, the statement could tone down the description of the economy and job market, uh, described as solid and strong in May. So the previous language they used was solid and strong. Now how that could change, that's the first part of the statement up here. So instead of saying economic activity rose at a solid pace, The data we know hasn't been solid, it's been moderate. So the obvious change here would be to tone that down a little bit. It's not that it hasn't been performing, it's just not been strong, it's moderate. Then you have job growth, and with job growth, that, as we saw with payrolls, has been weak. And so that also, likelihood would need to be altered and adapted. And again, all of these code word changes would be perceived as being quite dovish. So this is a statement here, and the reason why I've chosen this is because this basically is the old statement, and the analysts at Goldman Sachs have added in bold and underline what they think will be the new additions. They've put a line scratching out what was the existing statement. So this is their hypothetical, what they think the new statement will look like. And just to be clear, they absolutely hit the nail on the head in the last meeting, absolutely got it to the word, the statement, right. And the reason why this is so important is because ultimately the language used here will define how dovish this will ultimately be received by the market. Interesting thing here, Goldman Sachs is saying that you could have one dissenter. I'll get on to this point later, which would be James Bullard. Who might even call for a cut today and be a soul of the center, given he's the uber dove of the, the FOMC. A few other graphics I quickly want to run through. That is, this is the, the FOMC traffic lights of policy conditions. What this basically is a representation of is this is a timeline from left to right of the red blocks, so when the US Federal Reserve have lifted interest rates— changed interest rates in this case. And what it gives us then is if we look from the red space up, we can see what was the general economic conditions across a variety of different indicators both markets and central bankers look at to judge then what is the current condition and does it kind of fit the same pattern of what we've had before for them to take action. Now, what we've had before obviously is a rate hiking cycle. So, I mean, if you look at the red, what the red signifies is tighter monetary conditions requiring higher rates, and the green is requiring lower rates. And one thing you'll see here from 20— you know, going back all the way from when rates were at 0.75 to where they are today at 2.5, you know, the equity markets had that phenomenal bull market run and hence the reason why, you know, global prospects were picking up. Fiscal stimulus, a slow gradual normalization from the Fed, and so on. That's warranted the tightening as the economy has expanded. But the point being is, is that risks now are clear and evident in political uncertainties, but particularly Trump and trade war. And then the other thing is inflation has been weak irrespective of pretty spectacular unemployment rates in America. As much as Trump will tell you about how great that is, the problem for central banking and economics is kind of unprecedented times where this isn't really translating into higher inflationary conditions. And in fact, those indicators, the core— the Fed's preferred measure, core PCE— is pretty low, away from target. The 5-year breakeven inflation rate also has been moving lower. These would all be indicative, as well as signs like the 2s-10s yield curve inversion that people look at in respect to forthcoming global growth concerns, for reasons behind why the Fed wanna— or people believe the Fed are gonna cut rates ultimately, whether now or in the near term. Now, downside risks. This is what economists on Wall Street have observed over the last 4 releases of the, um, I'd say, uh, well, the last 3 releases on the left-hand side. So here, here, and here are the months when we had the Summary of Economic Projections. June, this is the one taken in the lead-up to this event. The most distinctive thing about this bar chart is obviously the increase of the black bars as we've got closer to where we are today, and the decrease in the, the kind of purple And what that's showing is that, you know, at the beginning of September, people were really positive. Remember, the equity market was at all-time highs. This is when everything looked great. But then obviously trade war soured, but also the Fed start hinting towards a higher neutral rate, and that policy tightening causes people to panic. We had that Q4 big correction in markets, and now things on the trade war side, as I mentioned, have started to flare up again, and as well as economic weakness starting to show some signs in the US economy as well as globally. And so the risks have flipped to the downside, hence again to be dovish. Now, is there going to be a rate cut today? Well, it could happen. The market, as far as short-term interest rate futures are concerned in the federal funds rate, implies a probability here of 75.8% that the Fed will hold. Now, there is a 24.2% probability, as far as market pricing in the short end of the fixed income markets are concerned, that they could cut. One statistic I'd like to remind you of is that the Fed have never not delivered when a market pricing has been 50% or more. I.e., it would be incredibly surprising for the Fed to cut when the markets are only priced at 24.2%. You would think then that although that would have a big shock value, the Fed have done a pretty miserable job at forward guidance and prepping the markets through effective transparent communication for causing minimal volatility. Remember, central banks want price stability as their ultimate objective, so All in all, on the balance, we're not expecting rates to be cut today. That's the overwhelming majority view. If, if they cut rates, the initial knee-jerk reaction will be entirely in the first immediate response off the rate cut, and that would be very strong dollar weakness. Yields would plummet So bond prices, the 10-year up, bunds would follow in sympathy, and the currency markets, obviously euro-dollar cable pop to the upside on the dollar weakness, and probably equities in the immediate— and when I say immediate, I mean the seconds— would blip on the upside given the immediate, the direct action they've taken. But this is unlikely to happen, I must stress. Again, the more unlikely something is, the more wicked the reaction is, because it's not priced into market price. When is the market expecting a rate cut? Well, they are expecting a rate cut the very next Fed meeting, which happens at the end of July. Markets are priced in 65% for that to happen, and I do think that the Fed will deliver a rate cut in July. The idea here being then is the word changes we discussed on the previous slides we just talked about, the code words, will be the sign to the market that the July cut is coming. Now, not all banks are of the same opinion of what the outcome could be today. Um, Citigroup, Goldman Sachs, Morgan Stanley, UBS all expect no rate cut. So remember, markets are priced pretty much for 70 basis points lower than the current federal funds rate at 2.5%. Indicative then of close to 3 rate cuts by the end of this year. Now, Citi, GS, MS, UBS, as I say, don't believe that. They think that actually, on balance, it would be a mistake to be so aggressive. Rather, use the form of communication to show the options are on the table to ease should the incoming data warrant so, or developments the trade wars be equally negative in that sense, keeping optionality and ammunition from a monetary policy tool point of view available. Bank of America, JP Morgan, Deutsche Bank, Barclays absolutely disagree. Barclays see 3 rate cuts, and in fact they see the Fed going heavy, 50 basis point cut, looking for the, you know, the real get the, get the shock value to show the market the Fed are serious. The problem I think that that leaves is that if the Fed were to cut so aggressively, in my view, then that means if I was Donald Trump, I would play out this China thing for a lot longer. I, I'd talk very harsh against China because at this point I know the Fed are going to continue cutting. That will keep me supported in the equity market. So it wouldn't crash, so I can start ramping up the aggressiveness against China. So I don't think it's in the Fed's interest to, I, run down the equipment too much and the options they have, and two, to give Trump that kind of firepower, an option. Okay, these are the dot plots. I'm gonna run over this pretty quickly because I want Sam to come on and look at some levels with you guys. This is the composition of the last dot plots we saw in March. And as you can see here, the green line connects the median dot plots from where these yellow spots are the individual FOMC members and where they foresee the rate of interest in the US at the end of each year— 2019, 20, 21, long term. And this is the rate of trajectory at which rates were in March expected to rise over time. Very different to where we are today. Markets are priced in overnight index swaps and federal funds futures saying that rates are going to fall in 2020, '21. The key then is the shape and change of the flatness of this curve, or the shallowness if it does dip, showing that rates are going to be lower in the future. Now, James Bullard could be a dissenter, but one thing is it might not necessarily be the 2019 dot plot that's most telling. Because in fact to move that dot plot, if James Bullard moves down, the median remains the same. So again, actually it's the statement wording and actually potentially 2020-21 end of year rates that could be the most market moving. A couple of different banks looking for different things. I mean, you can have a quick look now while I'm talking, but Deutsche, they expect 3 cuts to 25 basis points July, Sep, Dec. Most banks looking at 3 cuts, looking at the same time horizon that would coincide with the next projections that come out. Um, ING have quite a nice spin, looking slightly more cautious than other banks, seeing 2 25 basis point moves in the second half of this year given the underlying strength of US economy and their belief that Trump will want to trade— want a trade deal signed with China well ahead of his presidential elections next year. Meaning that the biggest risk event, if you're gonna kind of hedge your bets, you would say that there's no way Trump's gonna get a second term if this trade deal goes wrong. Yeah, the severity of the fallout on the global market will be so large that as the economy tanks, so does the popularity of the president. So if you think that's true, he won't allow that to happen, well then why is there a need for the Fed to get aggressive cutting rates? And I do agree with that with ING. Final few things. There's a Q&A. Here's a few points what to look out for. I think the Q&A, how important it is, is really derived from how aggressive or not they are in the initial part one at 7 o'clock. Thoughts about the trade wars and the outlook on inflation is going to be particularly key. Again, the checklist. Part one, the immediate release. We're going to get the interest rate announcement. So outside bets of a cut If that did happen, that kind of overshadows everything in the short term. That would be a big surprise. But if not, they hold, but they use changes in the, the statement wording to signify rate cuts to come in the future. Then it's about the size of downgrades in inflation and growth, and subsequently the dot plots for rate hikes in the future. Then the press conference. To make things absolutely as simple as possible from a fundamental perspective, These are the key 4 things. This is a checklist I saw in a Goldman's research note. I thought it absolutely did the business. Statement's policy stance, the balance of risks paragraph, the patient phrase, and so on. The number of participants projecting cuts in the summary of economic projections is number 2. The extent of the dovish changes in the statement and the forecast, number 3. And the tone the press conference with Jerome Powell number 4. All right, gonna leave it at that. Switch over my charts, hand you over to Sam. I know he's only got a few minutes, but hopefully he can give you some good insight on the technical side of things, um, and then I'll jump back on and we'll listen in for the live release.

Hi everyone, hope everyone's having a good evening and ready for the interest rate decision. I reckon it will be a a pretty good one to trade, uh, to be honest. We'll have a quick look over at the S&P, and I'll be interested as well in the chat if, uh, if you let me know what do you guys, guys think. Are they gonna keep rates the same, or are we actually gonna see a cut? Obviously, 24-25% likely that they're going to, to cut rates. I think that would be a really good opportunity if they were to do so. Just having a look at the S&P, if that was the case, Uh, certainly on the, the longer term chart, I think we get all-time highs this evening if they were to do that. I think we get a decent push and certainly back up towards 2965, and then suddenly you're looking at, at 3000 again. But let's not get ahead of ourselves just yet. Today you can see pretty quiet, uh, on the trading front, uh, and just where we're trading now, 2919, pretty good level of support as a zone, bit of a line in the sand. You could argue probably worth having a trend line on from yesterday's high as well because you've got those free tests from today as well. So long above that, short below, just as a gauge of sentiment. Of course you would want to wait to see what happens, but just looking at yesterday's move, helped by Draghi's comments in the morning and the Trump and Xi meeting as well, this, this trend line from the 11th to the highs that we had back on the beginning of the week. You can see that broke through yesterday. So if we were to have a not so dovish or hawkish, uh, reaction and S&P and equities start coming lower, let's be keeping an eye on this. And also you've got 2,900 just above, and also really key level from the top of the range at 2,902 on the futures, also matching up probably uh, with a third test of this potential trend line. So these would be the levels that I'd be keeping an eye on, uh, to the downside for stocks. Really key zone, if you like, around there, 2895 to 2802. Yes, it's a big zone, but certainly for dip buyers, it could be a good opportunity. Trend line above that, and also the high, uh, of the top of this range around 2928 to 2930, could be a good opportunity. And of course, if we are to, uh, get, uh, a cut, it'll be a very quick move in You can see we're looking at levels from, uh, well, what we hear, the, the back end of, of, uh, of April, the all-time high that we had in May as well. And, uh, yeah, of course could really get quite interesting. Have a look at the, the currencies. So, uh, the euro just recently just drifting higher, the dollar just coming under a touch of pressure against that. So if we were to, you know, get further dovishness, how much further could it go today? Well, key level to the upside around that R1. And these— this red candle here, Draghi's comments yesterday where they were dovish, as we know Trump not too happy about that. But that would be a key point that I'd be, uh, having marked up around that R1 as a very key resistance level longer term. And someone just mentioned in the chat, what would my medium-term strategy be if they were not to, um, they were not to cut rates, or they were to be, say, more dovish, you know, than expected, and we saw some euro-dollar go higher. Well, I still think overall the dollar is going to strengthen medium term, longer term. You can see if we're just looking more so at this trend line here, we just hit this on the 5th or 7th of June. If we were to get another test of that, and that could come in around 1.40 14 handle on the futures. I would be definitely eyeing that up as a medium-term place to get short. Again, more intraday though, that R1, the, the high, uh, the, the area of support before Draghi came on yesterday on the wires, that would be a key level to keep an eye on. To the downside, you can see we're trending higher, so similar to the S&P with that trend line. And a really good way of just sort of gauging sentiment is to have these trend lines on. If we were to come back down and break that, then yeah, we could actually, you know, push lower. And then suddenly you're looking at that double bottom from yesterday, uh, as well. T-notes and gold could, could be some good opportunities. Gold, I think, from a more medium-term perspective, a really dovish Fed here could get quite interesting. We've got the high that we had back on the 14th, which as we know is the, the high of the year as well, pretty much to the tick that we had back in the, the 20th of Feb. So if we are to break that, if we are to have a dovish Fed and gold does push higher, well suddenly people can start, you know, talking about these multi-year highs that we had back in 2017 and, uh, and '18. So keeping an eye on, uh, on gold today off a dovish release. If it is to be bad, where could gold go to? Well, again, you can see we're just starting to get squeezed in here, uh, so probably again worth having on a a bit of a trend line on these lows, uh, and then the highs around $1,350. But I do, you know, I think with, with these markets that are trending higher, even if they disappoint today in that they don't, uh, lower rates, I think medium term we will get a recovery. So if gold comes lower, I think it's a good opportunity to get long again, you know, if we're looking at a technically good area of support, 1334, previous highs and then lows around there could be a good opportunity. T-notes is another market like gold which in recent times has just been trending higher. Literally since November last year, the only way has been up. A couple of times it's stalled and gone sideways, but really here we have been pushing higher. So just, you know, something to bear in mind that just because they may not lower rates now they are still going to do so next month. And it could just be a good opportunity over the coming days to continue this trend, albeit lower down. Having a look at the, the pound, uh, it's a tricky one with the pound. Then he pushed higher. You know, this market's still going to be driven by, by Brexit, by, you know, who takes that Number 10 or what Boris's stance is when he gets it. So yeah, I don't know, a push higher in the pound, I'd just be a bit careful because you're going to have quite a few people looking at certainly this level here, 127.14, really key support before that breakdown. What an area to get short again here if you want that Brexit uncertainty trade. Uh, you've got just over a minute now, uh, until the release, so I'll get off the mic, but I'll come back on, um, uh, as and when. But obviously make sure you have no positions on ahead of this release. Just over a minute now.

Okay, I'm going to leave my mic open. The squawkers will be calling the news out.

10 seconds. That's unchanged, unchanged. Median view of appropriate Fed funds rate in 2019, 2.4%. That is unchanged. No change seen in rates in 2019, but nearly half see lower rates. One policymaker sees one rate cut in 2019, 7 see 2, 8 see rates steady, and 1 sees rate hike. So that's slightly more hawkish than the Street was likely expecting there. Fed sees economic growth slightly stronger in 2020, jobless rate and inflation seen slightly lower compared to the March projections. Certainties have increased regarding outlook. The sustained economic expansion— Fed says will act as appropriate to sustain economic expansion with a strong labor market and inflation near target. It has dropped from the statement language that it would be patient, as expected there. Uh, vote was 9-1. Bullard dissents. He voted for a rate cut. Unsurprising there. Activity rising at a moderate rate, moderate rate. Fed says household spending appears to have picked up, but businesses' fixed investment has been soft. Yeah, so the squawk still coming out with some more claims now after that Fed rate decision. Let's just recap on all the details here. For the federal funds rate, kept unchanged at between 2.25 and 2.5%. 5%. IOR unchanged at 2.35%. The current Q2 growth projection at 2.4%. It's for the— this year are still seen unchanged. So just going through the details there, medium view of appropriate Fed funds rate at the end of this year, 2.4%, and that is unchanged. So Fed policymakers see no change in rates in 2019, but nearly half do see low rates ahead One policymaker sees a rate cut in 2019. That was Bullard. 7 sees 2 rate cuts, 8 sees rate cuts or rates steady, and 1 sees a rate hike.

Yeah, so at the moment there's been, well, initially a dovish reaction. However, it kind of pulled back a little bit. There was a bit surprising as one person talking about hikes further down the line. But I mean, in summary, some of the first headlines that were coming out were talking about this idea of where patient has gone. But they do kind of say market reaction somewhat mixed over here.

And we have seen two-way volatility again. The Tino future did get up to 127.20 before paring back. We're at 127.12 plus now. We were about the 0.9 before the decision.

Yes, well, just turning them off for a second. Yeah, there's a little— just trying to pick through the summary of projections at the moment. And one thing is, this is what the table looks like when you actually look at the Fed's documents. And so here you can see the federal funds rate. These are the new ones. So in 2019, they see unchanged at 2.4. They see dropping in 2020 The Fed, the median dot plot now is 2.1 against 2.6, then 2.4 from 2.6 and 2.5 from 2.8. So it definitely is, you know, dovish in that sense. They've definitely altered the trajectory of the, the rate hiking sequence. And if you look at it, this is cuts in terms of— though what's quite interesting here, they go from 2.4 to 2.1 to 2.4 again. So if anything, you've kind of got this current level than a dip and then a return. So they're looking at the fact that there could be a momentary kind of blip in rates at that point, then moving back higher. And so a slightly different shape in terms of the language though, closely monitoring incoming data. They cited global developments and muted inflation. Bullard dissented. So all of those three factors were pretty much as to be expected. They did say uncertainties have increased regarding the outlook for sustained economic expansion. So yeah, it's been quite— I've been quite impressed by the move being so bought into because there's nothing too much here, I'd say, that's come as a great surprise. But I'm gonna have a dig through the statement and see what language specifically they did drop the word patient. Of course, we did see that, but for the moment, I guess it's kind of trade what you see, and it's a dovish interpretation initially. T-notes through pivot now. If I switch my screens, T-notes just gone through pivot level. Gold straight up to R1, having a retest now at that high from yesterday. So you can see here, euro highs, that's also just retested previous day high as well. If gold can get through here, obviously you've got the high print coming back from Thursday last week, comes just above it at 1362, but that area there will be quite a big challenge at the previous high in the R1 on the pivots. Obviously dollar weakness elevating both the major currency pairs and equities getting a bit of a lift in the S&P. You've got yesterday's high after the kind of Trump, Trump bump on the tweet on the China positive news that comes in at 36.5, about 4 points ahead of where we are. So be interested to see if there is any sustained push. You might think you know, quite a lot of speculators would be wanting like to book their position that long if they're in having hit market at around these levels. So you kind of got simultaneous ones, particularly gold on that level. I'd be looking at the S&P. If the S&P— if gold can't break that level, I'd say it's probably likely S&P can't do the same either. So kind of looking at those across the assets for a little bit of timing on the execution side. Certainly the T-note breach helped just bump things up again. Gold now having a challenge on that R1, definitely worth keeping an eye on. Euro again, another little push. That's already gone through some of the recent, uh, range over the course of this week, uh, managed to get back above that kind of double top that we had. This is Friday and Monday session, or the overnight Sunday session. So it continues to reverse course of some of the, you know, that Draghi-inspired loss. You know, maybe they had a conversation. Maybe Draghi thought, well, I better bump it down because the Fed are going to come out. And so, yeah, full reversal of that move already. I'm going to come off the mic, see if the squawk have anything more to add, and I'll have a look through the statement and add anything else I see. As I said, keep an eye on gold on that R1, having a first test on that level now. And if it can get above there and we see a snap higher, be looking at that spooze level with some interest, whether it can get ahead. Yeah, just looking at the S&P, obviously all-time high is still, uh, quite a way off here. That price action that we were seeing end of April, May. It's a long way off still, but that challenge on the 18th of June on a daily continuation is what we're looking at at the moment.

Yeah, just having a look over at this dollar reaction. Obviously you see the weakness in front of your eyes, but the, the pound up to that really key level. This is one we talked about just before, around 127.17 on the futures, depending where you have the— have it marked up. And just really key is that a gauge of sentiment If we can close above here today, this would be key. I mean, I don't think we will. I think this is as good a place as any for the bears to take over control, but really key level to keep an eye on. Certainly short term, if the euro was to break those levels and gold was as well, then sure, the pound can have a go at pushing higher, but really key resistance here for the pound against the euro. The US dollar. Having a quick look over the euro, this has failed, failed so far to, to really get a breakthrough of this key resistance point. From— we had a breakdown on Friday, you had Monday's high as well. People taking profit, uh, I've been a bit of an overreaction, I think. And let's have a look at gold. You can see just failing on that first test, uh, here. It's always, uh, let me just update that. It's always useful. We said this last time when you want those breaks above, the 5-minute close is always key. So right now we're at—

we—

yes, we have gone above it, but the failure to get that close above, you're just seeing price just hesitate going any further. And the S&P here, yesterday's high, tested that, we've almost reversed all of it. I think a bit of an overreaction. I really do like the idea, you know, this pound level. You can see we just come 10 ticks off that for now. So holding, holding relatively firm. Uh, the DAX obviously been dragged around a touch but not really too sure what to do here. The NASDAQ pretty much the same as S&P, uh, and on, on those moves. So keeping an eye obviously on gold. If we can get back above that R1, that seems to be a pretty key level in this market at the moment. Uh, the R1, yesterday's high, if we can get a further push there look for the longs in, in the currencies. And T-notes, you'd imagine as well, would push higher. S&P a bit confused perhaps about what to do, but gold it seems holds the key here. So keeping an eye on that R1, if we can go get a 5-minute close above, these currencies should push on as well.

Yeah, just having a look here. This might make things a little bit more, um, from a visual perspective, a little— make a bit more sense of what I was meaning about that kind of the drop and then recovery of rates that the Fed now see with the new dot plots. So what you can see here is the— this is the matrix, and it's— this is the previous March projections. The red is now the new ones. You know, maybe that's what caught the market, you know, the dovishness. But, you know, I think as Sam's kind of intonating towards maybe a little bit of over- done on the aggressiveness of that first move. I mean, net-net, I think possibly the 2020 drop in rates is a bit surprising, but then the recovery is, is what puts us back on track. And I guess in 2 years' time and in the long term, we're not that much changed from where we were. It's really next year that sees the bulk of the difference. From a statement point of view, Here is the statement marked up with the word changes. So again, we said economic activity, they were going to change the wording. They've said moderate instead of solid. In terms of the unemployment rate, although growth of household spending appears to have picked up from earlier year, indicators of fixed investment, instead of saying has slowed, has been soft. They said about inflation, they've dropped the words 'have declined' and are running at 2%. And they've also said 'on balance has dropped.' They've excluded that now, and they've kind of put in the words that has remained low and said declines, a little bit more definitive in that sense. On the patient removal, this is what it actually looks like. They previously said muted the committee will be patient as it determines what future adjustments, and so on. Now they've dropped all of that, and it's now: Mutant inflation pressures— the committee will closely monitor the implications of incoming information and the economic outlook as appropriate. So kind of what we were thinking. This is pretty similar to what Powell was saying on the 4th of June when he spoke, and he sounded particularly dovish almost, if you like, bedding this in to some degree. So, um, yeah, the surprising factor, I guess, is that the markets were already so overtly dovishly positioned. We felt that the bar was quite high for them to, to kind of hit that, and if anything, go above it to create a dovish reaction. But certainly the knee-jerk move is that. What's quite interesting here, that those levels we were just looking at, you can see how Gold and the S&P have been rejected at that resistance point of where we were just talking a few minutes ago. That being then the failure of gold to break above that R1 and that previous high. S&P then gets— runs into a bit of a barrier there as well. So yeah, just what I'm looking at here in the top right, gold at the top and then S&P TP here. T-notes at the bottom. So I'll come off the mic. We got the press conference is going to start in about 17 minutes. Obviously the squawk will add anything. I'm going to have a look through a few different things. If there's any questions, of course, let us know. Happy to, to address. Yeah, so we got, we got Piers, who's our head of trading. So if anyone has any questions, the two, the two, uh, gentlemen you can see in the chat room with the images, Will DeLucy and Piers Curran. They're the, they're the co-founders of Amplify from 10 years ago, so they're in the chat room. You know, these are the main guys that have been trading for 17 years, so obviously very experienced. Any questions you've got for them, just fire away. Piers making a good point though, from, you know, taking yourself out of the trading situation for a moment. Piers is saying that this makes a bit of a mockery of the Fed. Because basically they're cutting and then saying that they're going to raise rates. Remember, here, this is what the shape of the new rate trajectory looks like. They're basically saying, okay, we're a little bit unsure about the near-term, medium-term, so we're going to cut, but then rates are going to go back up. But central banking doesn't really work like that. You have a pretty committed course and you follow that predetermined path. You're basically saying you're going to flip one way and then flop the other, which is a little bit unusual.

About how to interpret the Fed, some are asking in terms of was this as dovish as the market was expecting? It is open to interpretation, and of course Fed Chair Powell will frame the statement and the guidance a bit more clearly. But just from the initial reaction, desk feels that it was quite a balanced statement. It kept the median rates for this year unchanged. Unchanged. So the dot plot remains at 2.4% median view for 2019. However, a lot of dovish tweaks in its statement, and again acknowledging the uncertainty. So the Fed seems of the view that it was a balanced approach, as Powell is known characteristically for, while the Fed has left itself the optionality that if trade talks do deteriorate, then it could step in with more accommodation.

Yeah, I mean, what the squawk said there, I think pretty much absolutely summarizes it perfectly, because what they're saying is, is that it's a balanced approach. As, as we've kind of said, there's nothing really too surprising in the language, I would say. All the dot plot change, yes, a bit strange that they're going to cut and hike, but the point being is it's about the optionality is there, but the word changes aren't really that surprising. And if you look at gold I mean, let me just change over and transition to my charts again. Look at gold now, it's just dropped, you know, a decent $8 in a pretty quick succession here on the charts. This is looking at a 5-minute candlestick. So after it hit that, that area of resistance, markets have come back. And, you know, I think rightly what Sam was saying is, you know, maybe the initial move's a little overdone because there was nothing shocking here. And maybe upon review and reevaluation of the— all of the information, market coming to a kind of a collective view that's similar to that. The important thing now though is that the, the press conference with Jerome Powell actually now is, is quite interesting because he'll be aware of the impact this has had on the markets and and actually this is a fairly small impact if I'm honest, going off previous historical events of this magnitude. And if anything, then that would be a well-managed situation from the central bank. If they've now got optionality to cut, managing market expectations in that way, then— and without causing too much destabilization of short-term prices— well, they've kind of hit their mandate pretty well in that respect. So the press conference is going to be key, uh, I guess going back to the slides that I was looking at, it's kind of justification now of why they've taken this stance. I'm sure people like what Piers was mentioning will be asking, well, why, why have you shifted the 2020 dot plot in one direction that then see it recovering in the opposite direction thereafter? What's the reasoning of that? I think everything else pretty much makes, makes sense given the economic conditions. For any of those who are, I guess, non-professionals or new to trading, the audio that came out, I mean, that's a 15 man analyst desk that runs 24 hours a day. So, you know, you can see then from a professional prop trading sense, really, it's— these events are untradeable without those guys breaking the news and dissecting it and picking out the main headlines and watching the newswires. That definitely is a big distinct difference between a professional and a novice trader. If you were trading the intraday markets, short-term market movement, really you can't survive without that type of service because they're there to support you and also keep you out of trouble when news breaks or rumors do the rounds and so on and so forth. If you're trading— and Sam can say a few words at the end of the session— if you're trading more medium-term or in fact long-term, then these kind of events. Like, like a hedge fund manager, for example, is not really looking at this event as an opportunity to initiate or adapt or change a position, because ultimately nothing too shocking really has happened. And they're not so bothered about short-term minimal sensitivity and volatility in markets. They're thinking about the much broader picture of things. So yeah, lesser important, I'd say, depending on the time frame of the investment, but certainly in the intraday environment, you know, there's the resources that we would use of the Squawk team. Twitter is a phenomenal resource if used appropriately for capturing of news and seeing it very quickly, as well as rumors and political statements and so on. So these would all be very common things that we would use. I've got about 10 minutes to the press conference. I will get the live link to PAL so that you guys, if you wanted to click on it, can access it. But I can see quite a few of you asking questions. Obviously, as I said, um, Sam, Charlie, me, Will Pears, we're all there to help, so just give us a shout if we can.

Ginger.

Yeah, just a quick look at, um, obviously the Fed funds futures market is highly sensitive to these latest developments. And just having a look, the odds of a rate cut of 25 basis points in July are now at 87.1%. So as you can see on the graphic at the moment This is a kind of visual representation of that probability. Uh, there's a 12.4% probability of rates being 50 basis points lower than they are, and there's a 0.4% of it being 75 basis points lower than where they are. So as again, we were kind of expecting, was the commitment in that July was probably going to be likely And that very much now priced into markets at this point. Yeah, good discussion going on in the chat room. Obviously, Piers, uh, and using the kind of usual case of logic, would be that central banks either are in a rate hiking cycle or a cutting cycle, it becomes incredibly difficult to manipulate this up and down and telegraph and communicate with the market effectively without following a more clearer pattern of that cycle process. But John, you know, I do get your point. The problem here is that you have a trade war, and actually, if you were to overlap— how about this for some thinking? The trade war is, is a highly significant risk event for markets, but the campaign trail now for Trump for election of his second term, that election is happening in November of 2020. Now look at this dot plot projection chart and remember that political timeline. So what, John, if I interpreting your, your response correctly, you're suggesting is that in the near term there are risks. The risks are probably as well that Trump will want to push this out. He'll want to show a strong hand in the Middle East, against China, against the eurozone, in order to cajole sentiment in the kind of Rust Belt to support him for his second term. Ultimately though, it's in his interest to get a deal done done on all those fronts. Therefore, do you have a short-term depressed market up between now and kind of midpoint of 2020, but ultimately he's going to get the deal in and then the market's going to respond probably quite powerfully because then the biggest risks are off the table and rates relative in historical terms are quite low, and then the rate hike sequence begins again. So yeah, I definitely see logic to that, but the one thing is, is that a central bank that's trying to now second-guess and build its policy around a political figure, I think, is ultimately a very high-risk strategy for a central bank and one that could end incredibly badly. Particularly when you're talking about a politician who has the behavioral patterns of Donald Trump, i.e., incredibly volatile in what he says. So yeah, maybe, maybe this dot plot is a management of Trump getting over the hump that is the current situation, all for it to then come together as he shoos in an economic rally in time for getting elected for a second time. Could be. Yeah, just one question. Someone's asking about the Fed Fund calculations on those probabilities. So basically, if you go on the CME website and and type in FedWatch. These are— methodology is based on the current contracts and the futures of how far out and where they're pricing. And so this is just a much easier way to look at it. The top tabs are the next Federal Reserve meetings: end of July, September, October, December, 29th of Jan. So basically, if you click on December, for example, so as you can see here the highest expectation is priced that far out down, um, the kind of short-term futures market is that rates will be 75 basis points lower than they are today, i.e., the most favorable move would be that we'd be in a 1.5 to 1.75 bracket from the 2.25 to 2.5 right at the moment by the December meeting. So again, normal rate cutting cycle, for that to materialize would be a cut in July, but then probably a cut in September. Quite a big gap there, but then that's the summary projections month. And then probably a cut in December to achieve that goal. That's what markets are priced for. That doesn't necessarily mean that's what the Fed will do. Of course, a lot can change between now and then. Press conference though definitely is going to be important, and that's going to start in the next 2 minutes or so. Yep, Piers, I agree with you. If the markets across asset end exactly where they started, Jerome Powell has just done a phenomenal job again. He's kind of balanced it out, managed to get into markets psychic, the fact that they're willing to adapt policy and respond to economic developments to cut. So managing market expectations that, you know, the Fed aren't just going to sit there resolute that they're right, markets are wrong, that they'll be flexible enough. But then he's also saying that rates could rise in the future as per the projections. So yeah, a balanced, as the Squawk was saying, approach. You could say then that he's managed that well. Got optionality on the table without having to commit too much. Let's see, gold's kind of stabilized. T-notes though having a little look at the high, so still some to play for with the press conference about to get underway. Should begin in about 2 minutes. Yeah, no, no tweets from Mr. Donald Trump just yet. Um, but we'll see. Press conference still to come, plenty of time. Yeah, Edward, thanks for your comment. And I definitely think the biggest question point, and the one the market could be most responsive to, is definitely the trade war. I think if that thinking is right about the, the kind of the dips in the, the forward-looking rate curve of what the Fed are suggesting, the projections— I mean, the question has got to be that, you know, why is that? Is that compensating for the trade war, you know, why are you being so responsive to that, how do you see this playing out, and so on. So anything around the trade war I think carries quite a significant possibility to move markets. However, Powell is so experienced now, I'd expect him to avert that, steer away from making any politically oriented comments at the the fear of being criticized and so on. And so he'll probably play a pretty straight hand, I would imagine. But that would be a key area for sure in the Q&A. More so, I think the language makes sense in the statement. I think overall any projection changes in inflation and growth and others make sense. The only thing doesn't make sense is the composition of that strange-looking rate cut hike cycle, uh, and the implications of whether or not that's tied to their view on the trade war and the outcome of that.

brings us to today's decision.

Again, just to reiterate, the, the feed I'm playing on audio is about 20-30 seconds quicker than Bloomberg, so I'll keep this channel open and just reiterate anything important, he says.

Inflation has been running somewhat below our objective, but we've expected it to pick up, supported by solid growth and a strong job market. Along with this favorable picture, we've been mindful of some ongoing crosscurrents, including trade developments and concerns about global growth. At the time of our last FOMC meeting, which ended on May 1, There was tentative evidence that these crosscurrents were moderating. The latest data from China and Europe were encouraging, and there were reports of progress in trade negotiations with China. Our continued— continued patience stance seemed appropriate, and the Committee saw no strong case for adjusting our policy rate. In the weeks since our last meeting, the crosscurrents have reemerged. Growth indicators from around the world have disappointed on net, raising concerns about the strength of the global economy. Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture—

He's just wondering if the uncertainties will weigh over trade development.

These concerns may have contributed to the drop in business confidence in some recent surveys and may—

many participants see strong—

be starting to show through to incoming data. Risk sentiment in the financial market has deteriorated as well. Against this backdrop, inflation—

this feed is not great.

Well, the baseline look—

what I'll do is the feed I'll keep running as best I can. It's not particularly fantastic, so anything important that gets said, I'll populate the chat with the comment that gets run.

That makes no basis for discussion. So if the Alfred Jobs and Growth— see, unemployment rate low this year and next. Monthly job gains in May were lower than expected, however, and in light of recent developments, this bears watching. Still, many labor market indicators remain strong. Community, business, and labor leaders all tell us that the prospects for job seekers have seldom been better and that this is true even for those who have traditionally struggled to find work. Wages are rising, and this is particularly so for lower-paying jobs. Committee participants' growth projections from 2019 are little revised from March, with a central tendency of 2 to 2.2%. Just above their estimates of longer-run normal growth. So growth projections for the year as a whole mask some important details about the composition of growth. Annual growth will be boosted by the surprisingly strong first quarter, which had just been reported at the time of the May FOMC meeting. As I noted then, the unexpected strength was largely in net exports and inventories, components that are not generally reliable indicators of ongoing momentum. The more reliable drivers of growth in the economy are spending on consumption and business investment. While consumption was weak in the first quarter, incoming data show that it has bounced back and is now running at a solid pace. In contrast, the limited evidence available at this time suggests that growth in business fixed income has slowed in the second quarter. Moreover, manufacturing production has posted declines so far this year. Thus, while the baseline outlook remains favorable, many FOMC participants cited the investment picture and weaker business sentiment and the crosscurrents I mentioned earlier as supporting their judgment that the risk of less favorable outcomes has risen. After running close to our symmetric 2% objective for most of last year, inflation declined in the first quarter. Data since then shows some pickup.

Participants—

—broadly see inflation moving back up toward our objective but at a slower pace than had been expected. The central tendency for 2009—

he's just suggesting that global factors might—

core inflation, which omits volatile food and energy components, is between 1.7 and 1.8%. The Senate side short-term evaluations committee has since expressed concerns that the pace of inflation returned to 2%. Wait, as noted above, but not at a pace that would provide much upward impetus to inflation. Moreover, weaker global growth may continue to hold.

Powell hasn't turned into a chipmunk. That's my feed, so let me see if I can, I can get a different feed that's going to going to work better. But at the moment, look, he's still delivering the opening speech. I've posted a couple comments in the chat room. Um, interesting last one: rising wages not providing upward push on inflation. So again, this is— they, they kind of stuck to this idea that inflation was transient, but that's kind of disappeared now. So they're kind of making an admission that no longer is it just a short-term phenomenon, that actually rising wages are not providing the upward push on inflation that they would want to see. So that, that in itself is, you know, kind of a certainly another element of turning more dovish. The weaker global growth may hold down inflation in the world as well. And then the rest of it mainly kind of reiterations about the trade uncertainty starting to show through in, in incoming data they're based on expectation, hence the reason why the dot plot was kind of altered as it was for 2020. So equities not too responsive. The Treasury, the T-notes managed to edge up. And have a look at R1. Gold at the moment is still finding some resistance. It managed to move back up again and retest that initial level that we were looking at, but again running into a bit of a stop at around that, that same point that we were at before. Okay, so we're in the Q&A now. So the first questions are normally the most important. And potentially market-moving.

So, the Committee had, you know, our usual long discussion of global that we'll be learning a lot more on all of these issues in the near term. And that's our focus. Do you think something could change before the next meeting? I'm sure that things will change before the next meeting. I expect a full range of data and information on all of these issues that we are looking at. I think we'll learn a great deal more about them. But asked if anything could change before the next meeting—

We think that that's the right way to do it. You said that things could change, and again, you seem to be alluding to that.

Again, many of these developments happen, you know, part of the way through through the last intermeeting period. Only 7 weeks ago we had a great jobs report and came out of the last FOMC meeting feeling that the economy and our policy was in a good place. So we want to see— we want to see and we want to react to developments, trends that are sustained, that are genuine, and not react just to data points or just to changes in sentiment, which can be volatile. At the same time, we are— we're quite mindful of the risks to the outlook and are prepared to move— use our tools as needed to sustain the expansion. Mr. Chairman, Steve Liesman, CNBC. Could you— through your thinking about trade, it was really the threat of tariffs against Mexico that caused at least the market to become defensive. Definitively banking or pricing in rate cuts. If, for example, there's a deal with China, does that take the possibility of rate cuts off the table? Yeah. So I would say that we're not looking at any one thing. I guess I'd start by agreeing with your premise that news about trade has been an important disruptor of sentiment in the intermediate period. But we're also looking at global growth. It's really trade developments and concerns about global growth that are on our minds. So we're not exclusively focused on one event or one piece of data. Risks seem to have grown. In the meantime, we have incoming data in the United States that's been pretty good, particularly for the consumer. Consumer spending is solid. Supported by, you know, healthy job market, high levels of employment, wages going up. We do see, though, some areas that we're looking at such as I mentioned business fixed income. So also the prolonged shortfall in inflation and perhaps job growth. We don't like to look at one job report. We like to average over 3 or 6 months, but still that bears watching. So we'll be monitoring the implications of all all of those developments for the U.S. economic outlook. We expect to learn a good deal more, as I mentioned, and we'll be asking the question whether those risks are going to continue to weigh on the outlook. And then, in the end, we'll use our tools as appropriate to sustain this long expansion. Heather. Hi, Heather Long from the Washington Post.

Yes, first couple of comments. You've had a little bit of movement, bit of a dollar Slight appreciation, gold a little bit lower. Tino's backing off that R1. He was talking about, you know, the Fed not wanting to react just to data points and changes in sentiment, talking about the trade war fairly loose terms, as you would expect, not wanting to be too reactive to that. And also talking about some of the parts of the economy which actually are functioning okay at the moment in terms of data perspective, because it's not all— it's not as if all data points are pointing negatively. Some sweet spots that there are at the moment which are, which are pointing okay. So not— or it is important not to overreact to single data points, but watch for uncertainties on the future. So maybe a little bit more even, let's say, rather than being so explicitly dovish as when we had that initial dump of comments, is the kind of tone so far. So slight pullback gold and in the major currency pairs.

I would say as a general matter, it's always something that we have to weigh. But I think we believe that the right thing here is to watch carefully in the near term and see how these risks unfold and see whether they continue to weigh on the outlook. Obviously, we try to avoid going prematurely as well. In this case, you know, there's always some judgment in these things, but I would just say that the risks that we see having emerged are risks that have gotten our attention and that have called a number of us to write down rate cuts and a number of those who happen to we see that the case is strengthened. Marty? Marty Kuching with the AP. You had your first dissent in your time as Chairman. Does that give us a sense that there was debate among a group that was pushing for a rate cut this time? And how do you— do you expect further dissents going forward? Let me say the same thing as I said last time before there had been dissents, and that is that I think the process of careful, thoughtful dissent is a very healthy one, and I've always believed that, and I feel like you make better decisions when you hear disparity of views. So I really do look at it that way. I would add, though, that the support support for the path it took, for the policy statement that we adopted, was quite broad. James, and then Howard. James Pulley with the Financial Times. Mario Draghi at the ECB yesterday sent a strong signal of new stimulus for the eurozone. Do you think that such actions to ease policy at other other central banks around the world will put more pressure on the Fed to do the same? Well, first, I think all central banks are focused on their domestic— their mandates are domestic and they're focused on economic conditions from a domestic standpoint. And that goes for the— your central bank goes for the Fed, goes for all central banks. So that's our principal focus. So it could cut either way, you know.

I, I would think that, uh, okay, it's 45 minutes past the hour, and so the Q&A is still going to go on for a little while, but for the purpose of this exercise, we're going to start wrapping things up. A couple of different things then we can talk about in summary. One is, in terms of wrapping up this whole event, hopefully this was a bit of an insight as to the types of ways that you'd prepare for an event in reality rather than just a quick 20-minute preview. It's the sort of thing that we'd be talking about with our traders throughout the entire day, and, and the sort of thing that again, you, you're strategizing about every different type of scenario. There's kind of a spectrum. I kind of try to approach these new news-driven events, between, you know, kind of hawkish surprises to ultimately what would need to be done to be received by the market in an incredibly dovish way, and then the associated moves that would happen with each one of those predetermined scenarios. This typically is the— I would say the key to trading news-driven events. It's all in the, the thoroughness of the analysis and the preparation, so then becomes a case of more binary execution rather than trying to think and be reacting on your feet of what is going on. Now this can be twofold. I'd say all traders should go through this process, but this is why you lean on people like me or, or fellow analysts to try and help you through that. That's what our purpose is. You guys are the risk-takers to making these trading decisions, managing the trade, and then it's for us to kind of pick through this. So having a squawk is key. If you're interested, we have a trader chat community that has a squawk box built in. It's called Trading Live. So if you just search trading-live.com, you'll find it. Otherwise, a few quick other points. What I'll do is obviously I'll be back in the office in a couple of hours in the morning. And then I'll wrap things up and I can review once the dust has settled exactly what, what everyone's saying about this event and obviously what's important. Where do we go from here? Even though the Q&A is still going on, one thing I'd say is that all in all, if you look at the charts, X out that initial move and volatility, I think it's, it's a pretty much non-event in the fact that it's been handled quite well. So a very tricky one to trade. If you didn't trade it, I can think that actually that's a pretty sensible decision because there wasn't much in the way of clarity straight away. Kind of a short-term dovish opportunity, maybe initial reaction. But I think Sam called it quite, quite early on, and rightly so. I think maybe a little bit overdone in the initial, initial move because on the overall summary, it's a fairly balanced kind of release. So a couple things then. This is the Amplify website. If you're not familiar with Amplify, Amplify Trading was the original company born 10 years ago by the two gentlemen there in the chat at the moment, Piers Curran and William DeLucy. They were both formerly traders at the US prop firm, Goldenberg Heymeyer, here in London. Piers formerly worked as part of the global macro team at HSBC. They started Amplify actually as a proprietary trading firm with also a training arm, of which then we allow and train people over a 9-week period to essentially not only get more experience and knowledge about markets and to get professional qualifications and so on. But we give people opportunities to trade our funds, to potentially become a back trader, and whether or not they stay with us and that journey continues and they become kind of a bona fide futures trader in time, or whether or not we act often as an incubator of talent to then put people in places that are, that are much larger than our own, whether an institution or a kind of like-minded proprietary kind of sense. So this is the Amplify website, Amplify Me. Now the reason why it's Amplify Me is that we have two quite distinct different arms of our business. We've got the trading, the prop trading and training arm, and then we have a technology arm. So we've made some proprietary software that's now been adopted by pretty much all of the major banks on Wall Street in regard to training their graduate-level staff. This gives them an ability to practically experience sales trading, market making, risk managing, portfolio management, you know, all these different types of things that you would do in an institutional environment. So that's part of our arm. We work with a lot of big business schools from Cambridge, Oxford, Imperial, LSE. That's all doing that kind of practical learning to supplement then obviously these fantastic theoretical-based or kind of traditional universities that they're at. So that's one arm. So anyone who's young and looking for a potential career in finance, we're kind of the go-to people for that from a practical side of things to bolt on to your academic academic record. From a trading point of view, that's the part that me and Sam, uh, who you probably know quite well from the briefings that we kind of were involved in, uh, entirely. So if you go on our website, you basically click here and you've got a dropdown of different options. If you click on the trading one, uh, this is me at my desk, obviously. This is then the different things that are going on. We have basically a 9-week program. We also have a 1-week intensive program, Monday to Friday, based here in the City of London. There's actually one going on right now. There's a couple of guys still in the office from the 1 week. Pretty long day for them, but hopefully valuable. So the next 1 week I think is happening in July. The next career programs that we run aren't happening until September, October, later this year. But obviously jump on the website, drop us a message if there's any questions or anything. If you're interested and you're in London, I'm actually speaking at a public event alongside Mike Belafore, who you might be familiar. He is the co-founder and head of SMB Capital in New York, quite an infamous predominantly equity-based proprietary trading firm. But he wrote the book One Good Trade, which is kind of the, I guess, the Bible of trading, but always one of the top, top 5, top 10 recommended reads for anyone interested in trading. Uh, Mike has been in the market a long time. He specializes in kind of elite performance, so his specialism is very much kind of psychology. But Mike's going to be speaking at this event, and I'll be joining him on the panel with a few other kind of guests as well. I think there's going to be 300 or 400 people attending. So if you're in London, you're interested, jump on our website and click on that button to get more information. The other things here is Sam and I write a weekly strategy report and we issue that every Monday where it's a global— it's a global market-based strategies deployed across different asset classes So it's global macro multi-asset in futures, and we will— if you want to get that to your inbox, it's absolutely free. You just need to submit your email in here and submit, and you can get those. Here are some examples of people who've gone through our kind of trader training program. We get a whole variety of different people. For instance, this chap here on the right, Will— Will's just got a job as an equity trader at JP Morgan, having spent 6 years in a more sales-oriented role at Goldman's. So he's come at it from a very, you know, kind of level of— he already knew, had excellent knowledge about markets, but hadn't had any— been in a position of risk in a trade environment, and he needed to accumulate that experience. He did that with us for about a year, and now he's going to be heading to JP, and he starts in the coming weeks. These other guys, slightly different, but you can read their stories. Other things to be aware of, you're obviously on the YouTube channel, so every morning Sam and I do a morning briefing. We publish this at about 8:30 London time, so it's delayed from the live broadcast we do in our Trading Live platform. So if you wanted it live, you'd have to go there, but YouTube, we publish that every day. So we'd love to have you you guys obviously interact, leave comments. If I click on today's one, for example, so here's what I would have talked about early this morning, a review of what's coming out for today. So yeah, people leave comments and we'll reply to them as we go through the day. Jenny, you do leave a comment with love hearts for me every day, so I don't know who you are, but much love to you, and I appreciate your, your hearts. That you respond. I hope that's for the content that I deliver and nothing else. But yeah, the YouTube channel, check that out, subscribe to the channel. We'd love to have you as part of our growing online community. And as I said, any questions at all, post them in the video. We will always respond. Other things are, I'm quite active on Twitter. My handle is @awmchung. Useful little snippets about, you know, the slides I've used, what the banks are saying. Obviously there's a lot of talk about this elimination round for the next Tory leadership. Anything that's useful for traders, basically. Sam tweets, but as I said, he is not just a finance trader, he's a— he's also keen golfer and former, former professional footballer, I should say, as well. I have, you know. But the point being is that Sam looks at the market with a much more technical perspective than I do. This is one of the kind of things, if you're a retail trader, it's not really about being good at fundamentals, good at technicals. It's about having an awareness of both disciplines and then finding what works for you, kind of like finding what economic or technical tools work for you best. It's about an appreciation of both, and how far you go with one way or the other, that's going to be down to you as the individual. But it's quite a good combo, me and Sam, because we both come at it at slightly different angles. So hopefully you get all bases covered. And the other one, of course, is the Amplify Twitter account. So we share lots of relevant news stories during the day, activities that we're doing here at Amplify on line or in-house. So you're always welcome to follow us and join us and message us. We also will always be engaged with you guys. So that is it. With that, thank you very much. Do you think that will still cut in July? One second. Do you think the Fed will still cut in July if Trump and GDP Okay, so final question. Charlie's, Charlie's one of our, one of our traders and one of our mentors. He's just asked me that, well, let's have a look. Final thing then before we sign off. The Fed funds rate now, let's just have a look, is pricing in for July 83% for a cut. So it's, it's rising again. So the markets are heavily tilted to towards having what we've seen, initial reaction, Fed are gonna cut, and for a strong belief of that gonna happen at the end of July. What Charlie's just asked me is, the G20 is happening at the end of June, and apparently, as per the tweets from yesterday and what's been confirmed by Trump, what might happen is, is that the two of them are having extended conversation. There's preparatory talk for also happening. Charlie said, if there was a deal, well, what then? Do the Fed need to cut? Well, my answer to Charlie will be, I can almost guarantee you there will be no deal secured either before, during, or immediately after. And by after, I mean the weeks after with a trade deal between the US and China. I would say It's not in Trump's interest to get a deal done that quick because he wants to manage it and draw it out, get the maximum response out of it when he needs it later down the line. And China have said already today they're a little bit more hesitant, saying that, hang about, there's a lot of issues here and it's not like we're going to resolve these immediately. So hypothetically, if that was to happen, they get a signed deal as unlikely. I think I'd give that— I'd assign a probability of that of about 5%, 5 to 8%, if I was going to pick some numbers out the air. So very low. If that happened, you would get a quite powerful response in a positive way across asset prices, which would unwind this July rate cut. But it ain't gonna happen, I'm afraid. So I'd say the July rate cut remains for the moment. Alright, that's it. No more. Otherwise, I need to get home. My daughter's ill, and I'll get a lot of aggravation from my wife if I don't get home at a reasonable time. So with that being said, let's wrap it up. Thank you very much for joining us. I'll see you next time. Any questions, feel free to tweet either me, Sam, anyone on the team. Drop us an email. If you're in London, stop by the office and we can pick things up, and we'd love to meet you in person. Thanks very much, everyone.