FOMC LIVE Trading Event - 16th September 2020

Okay, hello everyone. Hope everyone is well.

I'm just going to bring up my, um, YouTube chat, so bear with me.

But guys, do you want to say hello, introduce yourself for those who are new to the channel?

Hey guys, yeah, I'm Alex. Nice to meet you.

I hope everyone is well in there.

Introduce yourself.

Their, uh, their evenings. See, I've got, uh, got the Wall Street in the, in the background. Unfortunately not there tonight, but good to see some, uh, familiar names in the chat. Looking forward to tonight.

Yeah, just, um, I can see I've got a bit of a sunspot around my face. Uh, we're obviously based in London, end of summer, sun setting at the moment, so hopefully it won't be too much of a distraction. Much rather be on Wall Street with you, Sam, than sat in Southeast London.

You and me both.

But yeah, guys, I hope everyone is doing well. So yeah, just a quick brief run through of the, the plan of action. So Dion, thank you as ever, Dion, for— I know you, you're quite active commenting in the, on the videos every day, so long may that continue. Obviously, anyone who watches my briefings on YouTube want to leave any questions at all I'll always try my best to reply to everyone.

Mo, hope you're well.

Hopefully we'll, we'll be seeing you again soon, Sam tells me. Terry, good to have you on board as well on the new, the new program that's coming up. But yeah, to everyone, some familiar and some new faces, I hope everyone is, is doing well. What I'm going to do, plan of action is I'm going to run through some of the overall top-level fundamentals of what we're looking out for from the upcoming announcement from the Fed in 27 minutes. It should take me about 10 to 15. I'll do my part and then I'll hand you over to Sam. So I'm just going to talk purely about the fundamentals. Hopefully for a lot of you, that's probably the area that you're, I guess, probably least knowledgeable in. My job then as head of market analysis to try to break down these what are actually very complicated events to trade. I think as a headline macro trader, it doesn't get any more tougher than trying to break down the nuances of monetary policy and communication. And hopefully I can break that down into a much more actionable, definable process for you guys as to how we go about it here at Amplify.

Then I'll hand you over to Sam.

He'll look at the markets from a much more kind of implementation sense. So definitely using technicals, the framework of the trades, the setups, and so on. And then Alex can come on as well, give his little flavor of what he's looking for specifically. But any questions as we go, please just pop them in the chat. Sam, if you can do the sharing elsewhere as well while I'm doing my part. And yeah, Alex, if you can watch the chat, if there's any questions you can address while I'm delivering my opening gambit.

OK, so let's begin. Okay, should be able to see my, my slide now. So let's run through some of the key things we need to be aware of here, and the first of which I just want to briefly talk about is what was adopted by the Federal Reserve just in the last couple of weeks. For those new to markets, this might seem quite normal. You've probably any student of markets over the last few years will probably, post-financial crisis era, be used to a world where the Fed never hits target. And you're kind of— the assumption is that that's just normal. That probably has played in a big reason as to why the Fed have meant or conducted a policy review and wanted to adapt, particularly under scenario like the pandemic, where we've had a very powerful and immediate collapse of of economic activity creating huge downside for GDP readings south of 30%, as we saw with the, the advanced, for example, Q2 US reading, 20% in the UK, and so on. The idea here though is that given the amount of fiscal and monetary stimulus that's been provided by central banks and governments, that the actual recovery, all things remaining equal, is that the 2021 and beyond period, we should see a very steep recovery But the shape of that recovery is questionable, of course, dependent on many things, you know, the outcome of the election, the, the virus and how it performs over the winter period, the speed of a vaccine, its then distribution globally, so on and so forth. The point being is though, if the economy is going to see very radical changes over a relative short period, a medium-term perspective, well then what the Fed don't want to happen is that we do start to see a very firm recovery but markets being forward-looking start to fret and get concerned about as inflation starts to emerge and demand increases as the economy globally recovers, and particularly in the US, then actually then that starts to lead people to believe the Fed are going to have to increase rates as we close in on that 2% target typically. So what the Fed have said is basically let's drop that approach. More fitting of the situation would be we've undershot a lot. And now, rather than it coming up to 2% and being a trigger point for markets and its expectations of forthcoming tightening of monetary policy, actually we're willing to let it run above target for a period. And it's that unknown quantity, I think, that the markets are very hungry for clarity on. So what we're saying is there's your line, it can run under, it can run over, as long as it averages to 2%. So the Fed will tolerate periods of inflation modestly in excess of 2%. In the past, they would have hiked rates on that, on that alone as a defining factor of their mandate, whereas now they're saying we'll let it run hot almost for a little bit, which is a big step then in a dovish direction as what we saw a few weeks ago and has been a key reason why markets, exiting out the recent sell-off, have been relatively well supported. Of course, you know, forgetting that little cream off the top we're up big time, uh, particularly in things like the NASDAQ and the tech stocks and so on, despite a little bit of trimming that we've seen of readjusting and a slight rotation out of some of those big tech names. So that leads us to where we are at the moment. What have we got on the, the docket for today? Well, there's a couple of things. For first of all, uh, there's 8 Fed meetings, of course, in a year. 4 are very important from the aspect of more clarity over what the Fed's assessment is about the economic future, and that's because we get the Summary of Economic Projections, otherwise known as the SEP. And the SEP gives us basically these four orange sections. It gives us what the Federal Reserve officials think about the change in real GDP, unemployment rate, core PCE inflation, and probably arguably the most important one normally, uh, but in this case the inflation is going to take quite a lot of focus, is the federal funds rate. We actually get to see what do these members— not actually the clarity of who is the specific dots, but if you're aware of your kind of hawk-dove spectrum, you'll be aware of probably who lies where— but we'll get an update as to what does the future economy look like. And if we can assess where the Fed's head is at, we can almost then start to predetermine where monetary policy is likely to change in the future. And that in itself against market expectations should define where assets should be priced today. So that's what we're trying to achieve from this event that's about to come out. Now here, the one thing to bear in mind, and this is taken from the Dutch bank ING, but this is kind of the general consensus across the street, is that we're likely to see growth expectations revised higher to reflect the recent strong data. Remember, the SEP comes out in March, June, SEP, and DEC. And remember what the world looked like in June. We'd only just come out of a full national lockdown in the US. Markets have gradually started to reopen through that April-May period. So in June, things were still a little bit more sensitive. Since that point, we obviously had a little bit of an outbreak in the Sunbelt region in the States, in the South and the West. However, now cases are going down, hospitalizations are going down, and obviously people are hungry now for when is this vaccine going to come. I wouldn't so much believe Trump, but But obviously the timing is quite key of this. The idea being is that the markets are a little bit more assured, and so should the Fed, given the economic— the macroeconomic data that we should be actually in a slightly better position than perhaps what we thought back in June. So overall, if they revise up— and generally what happens with these latest numbers, they, they release September against the June, and we're looking at the differences here. So there should be a slight tweak up in terms of where GDP a real change in GDP effectively going to finish at the end of this year. So here, ING are predicting an actual 2% revision upward. So still contraction of 4.5%, just not as bad as where we were previously. So it's more about a slightly more shallow decline in the near term, but ultimately further out still growing at the same rate as they saw previously. That's what they're expecting. Unemployment, pretty similar actually. The unemployment data, if anything, whether it's jobless, whether it's the actual unemployment rate as part of the Nonfarm Payroll report, it's actually performed, if anything, a little bit better over recent months. And so therefore the net revision could well be that unemployment rate actually drops back down to 8% rather than 9.3% from what they forecast in June. So all of these are quite upbeat. The key one though is rates, and the reason for that is this dot plot matrix we're about to see, uh, is going to be the first one which incorporates 2023. Before, we only saw up to 2020, '21, 2022. For those new to this, this is where do these Federal Reserve members see interest rates at the end of the current and subsequent years. This is the first time we get to see 2023, which is going to be quite interesting. Do they see or not interest rates remaining at where they are now, zero, for the next 2 years, the next 3 years? And the clarity around that in terms of the wording will be key. So this is what that, that kind of dot plot matrix looks like. The general vibe on the street is that even though it's going to be inclusive of 2023, ultimately Federal Reserve rates are not going to change anytime soon. And by that we mean perhaps multiple years. And so if they're to say, insinuate, then that rates are going to remain where they are, not just through 2022, but that inclusive of '23, I don't think that should be taken as a massive dovish signal, uh, in that respect. The other thing then is these two key areas. So what's going to be ultimately very key is people are looking for what is the new wording. Do they specify now the actual parameter around then this new average inflation targeting? And then we're going to look at bond buying. So first of all, well, let me bring them both up. Going to start with the inflation reference, the new wording, a phrase in the FOMC statement to watch out for So remember, it's a two-part event. We get the statement at 7:00, we get the press conference with Powell at 7:30. Now for the statement at 7:00, it's a fixed structure template of around 500 to 600 words or so, and we're looking for very subtle, nuanced changes in language that would be indicative then of how are they now looking at inflation to fit in this new policy kind of mechanism of average inflation targeting. So here, what to watch is whether the central bank changes its commitment to maintain rates close to zero until it is confident the economy has weathered recent events to something a little bit more firmer or not. And this is what people are referring to when they talk about forward guidance. Forward guidance, what markets want, which is ultimately one of the things we'll finish on, which is where they might be disappointed, is they might not get that type of level of clarity they're looking for. And a lot slightly more passive approach from the Fed, lacking in forthcoming of detail, finite specifics, might well disappoint those, those which were more dovishly kind of positioned for the event. Another is whether the Fed will maintain its pledge to assess economic conditions relative to its maximum employment objective and its symmetric 2% inflation objective. So let me just break that down and make it more simple. Some economists have suggested the Fed might tweak that to include a reference to an average 2% inflation objective over time, reflecting its new policy framework. So rather than it being tied in this way to maximum employment and symmetric 2%, they're adjusting that to fit with the adoption of AIT. But I do agree, I think they're going to say over time. I think they're not going to be explicit to define a specific period. I think they'll That would be too much of an ask for them to make given the uncertainty of the economic future. The other thing is bond buying. Perhaps this could become a focal point of the meeting. And this is talking about the bulk of issuance from bills maturing in 1 year or less to longer-dated debt. So this is all about not quite yield curve control like what we have in Australia, where they're targeting a certain year, the 3-year part of the yield to trade at a certain level. This is more about them the maturing debt, if they're going to reinvest the proceeds to keep the level and volume of QE in the system, do they start buying longer-dated debt to influence the long end of the curve? Any insinuation of this could well be quite bullish for the 10-year if we were looking in the fixed income space. Quickly, just running over a few final points. Market expectations overall in the FX market— this was from an FX strategist, Viraj Patel. He was kind of running the numbers And actually, market expectations for a big surprise today are pretty low. If you were looking at actually overnight FX vol for the dollar G10 currency pairs, this is lowest for any FOMC meeting since the March COVID crisis. So this is the least expectful of actual big change that we've had. Remember, before, we were almost disappointed in some of the previous Fed meetings because we were thinking, are they going to do yield curve control? Are they going to do AIT? And they didn't do that. They did the latter just very recently. So now that's out the bag, it's probably going to be right, a little bit more clarity, a bit of a cautious but optimistic tone on the forecasts. And that will— could well dictate the main proceedings today. This was a scenario analysis, and this is one of the main things I've not got, obviously, time to go into in great detail. But one of the main things we try and we work at length with a lot of our traders, Sam and Alex, do I know, is scenario building, thinking about your baseline scenario. How would you then— what are you looking for from an actual news announcement point of view? And then what is your action plan? You know, what asset are you going to trade? What's the technical setup? What's your entry point? How are you managing the trade? Everything is predetermined so that when this actual news comes out, it's as binary as you can make it, so that then you're not delayed in your kind of execution and your management of that trade psychologically. The crib sheet then, just to round up forward guidance, uh, defining time period for when rates will rise, or the possibility of something else which has been mentioned in the press is an outcome-contingent approach, moving rates until, let's say, unemployment hits X as an objective, then meaning Y policy might tighten at some point, or rates might then start to rise in the future. Both of these, I think, are going to be a little bit much to ask for in today in terms of actual clarity. Anything else to look out for? So to recap, the dot plot matrix will extend out to 2023, unlikely though to provide too much excitement as rates are expected to be low throughout that period, even with the extension of data that we're going to see in the projections. The press conference is likely to be relatively upbeat, but of course almost COVID contingent. Second wave, however you want to determine whether it's the second wave or not, but the further developments of the virus, the timing of the vaccine will ultimately be two of the key trigger points to the shape and speed of the recovery. And don't forget, at the moment I did see a couple of headlines just before I came on where the last one was the White House is reportedly strongly signaling it's willing to agree to a compromise on a $1.5 trillion COVID-19 stimulus proposal that the Senate Republicans could go along with in order to seal a deal in the next week to 10 days. That just came out in the last hour, and actually, I would see that as a bit of a disappointment. I know they've been at an impasse and they've not managed to actually get something done for a long time, and obviously the market's quite stimulus hungry, but $1.52 is a long shot from where we started from a Democrat's perspective. They've come way off the pedal stool of $3.5 trillion down to more like the $1 trillion of which Republicans are used to. And these are huge numbers, but markets are so stimulus-ed up at the moment. Anything short of a bazooka, they get a little bit let down by. So is Powell going to comment on the fiscal impasse on Congress? No, he doesn't want to get drawn into that. He will probably comment on the necessity for fiscal policy to supplement monetary, no more, no less, I would imagine. Any hint at changes to QE purchases, shifting then of this heavy-weighted short-dated maturities to longer end could be interesting. Conditionality then around forward guidance of QE. Reaction-wise, as I said earlier, chance of a disappointment. Markets are inevitably— my experience of markets on news-driven events is we over-expect Humans always subconsciously do this. We over-interpret things. Whenever you see a news-type reaction in markets, regardless of the Fed, you often see quite an exaggerated move, an initial punch in markets up or down. And here I think overall, generally what we tend to see is Powell manages these quite well, which is kind of in a way disappointing because we kind of want a little bit of volatility to add some trade opportunity. But Generally speaking, I'd say markets are leaning on the side of they want clarity on forward guidance. That could come in the form of dovish commentary, but without specificity. So that being then, lack of specifics I think will be met, and it will disappoint perhaps dovish positioning, which could as a net result strengthen the dollar, give the yield a little lift in the US. That could put a bit of downside pressure on stocks. Stock's already on a little bit of a pullback, albeit S&P flat pivot key level. But with that combination, with that stimulus news coming out on the low end of general expectations at $1.5 trillion, that could then result— technically, I think the S&P is at a real key level. Sam will talk about the moment, break of that, it could get quite heavy. However, all in all, I'm not expecting actually a great deal here. The recent adoption of AIT, in my opinion, and take it for what it is on that alone, is that I don't feel like the Fed need to give us more clarity. They've given AIT, it's early adoption. The markets are relatively calm despite the sell-off we saw at the end of last week. So I think they can afford to kind of not give too much away. They're a little bit upbeat, that's suggested in the projections.

I don't—

I'm not looking for great clarity, but I am quite interested at stocks at these levels, potential break I think because of positioning could create a bit of a move. All right, that's it from me. I'm gonna hand you over to Sam to go over the charts.

Yeah, thank you very much, Em. And, uh, I'll start off— let me just share my screen. I'll start off with, uh, with stocks and we'll have a little look through some of the, the charts that could be affected tonight. And while I, I sit on same side where I'm not expecting, uh, massive movement where we finish for me is going to be incredibly important. And if the markets were to finish the day now where they are, I'd be expecting a bit of dollar strength to come through for the, the rest of the week and the beginning of the next one. And also, just guys, it's good to see some familiar faces in, in the chat on YouTube, and keep those questions coming in. Uh, Mark, hope you're, you're well. I've just seen you in there as well, and George. But yeah, S&P here, I've got this on the daily chart on the futures, and you can see it's pretty flat for the day. It has been coming off better levels. Uh, the way I'm looking at this is— well, hang on, are we going to finish the day back above sort of 3424 on the daily? Because that would be at the point where if I was short, I don't want to be short anymore. So really, I'm just going to put a little X there, kind of marks the spot where if we are to okay, get a little dovish surprise and we push above those highs and close there, well, I'm saying I think we then go 3484, I think we then go 3500, and then it's all-time highs that come through again. However, if we finish the day near the lows and like, and mention that pivot breaks, then I think we do start to drift back down, and 3312 down here is more likely where we had the lows, uh, of sort of near last week as well. And you can see it is an important decision that S&P has to make right now. Do we close above and then look to push on, or have we just hit the resistance for 1, 2, 3, 4 times in a row, failed? We then finished near the low of the day, and actually we look to sort of break down there. So that's it on the daily. Looking at this then on the, the 60-minute, and we'll put those pivots on, and you can see the extent of that pivot area really, if you just sort of draw— it has to be a bit of a zone on the futures coming in around 3391. It was the high that we had back on Monday, a bit of support, uh, in the early hours this morning, and then again 8 AM UK time, and then around about the, uh, near, near enough European close. So below there, it's almost like the, the bulls for the day aren't going to be as interested. So then we start to wind down a bit. And then, you know, people that like using their trend lines say, well, we've also broke this trend line, which looks like a great guide for the day. And they're not going to want to stay in this position where they're buying equities. So yeah, close of the day is vital. I'm not expecting fireworks, but sometimes that's when you do get them, uh, as the market's maybe not expecting something. Wow. But yeah, S&P on the daily chart is, is going to be very vital. I said I'd expect some new, uh, dollar strength if things were to finish how they are. It's the same theory in, in that euro. Happy to, to stay short euro-dollar, you know, if you got it from those highs or sort of maybe that the double sort of top when it appeared from the, uh, the ECB, as long as it stays below 1.1926, uh, there on the, the euro-dollar. We're at a level I'd probably call a bit of a line in the sand, and reason for that, it's Okay, yes, in the middle of the recent range, if you like. We've got some good price action on these lows, good little reaction. So now I'm starting to get a feel that the market is looking at this. So if we were to close even below there, coming in on the futures 1.1835, then I think it gets a bit dangerous. Then I think you see the low of the month, and then again it's decision time, which of course you can see was, um, you know, a good area of support before. So the bulls have to defend that, and, you know, psychologically below there, they're not going to want to stay in this position. So yeah, I'm, I'm really interested to see how we close the day. Obviously the announcement will, uh, you know, have everyone's attention, but I want to see what happens as we get later, later on. Gold as well. If we're gonna have some dollar strength and we reject this trend line for the second day in a row, then and we can start to drift back lower. On the flip side, little dovish surprise, dollar weakness above the trend line, then I'd say 2,000 comes in, then I'd say 2027 comes in, which is a fantastic level that I think people are looking at. The only barrier for me, uh, above there is then the, the recent high that we've had. B-notes, obviously not too much going on, but we are getting squeezed, and the decision time has got to come. Dollar weakness to the upside dollar strength to the downside. Something has got to give. I feel the markets across the board are very well set up for a big decision to come on the close, so I'll be, I'll be, uh, keeping an eye on that. Uh, I don't know if, Alex, if you want to mention anything. Uh, we've got a few minutes to go, so hopefully I kept that brief enough.

Thanks, Sam. Yeah, yeah. Oh, could I have the sharing rights, please? Thank you.

Yeah, Sam, that's got to come from you.

I've got it. Yeah, I just wanted to point out the dollar index on a weekly time frame, um, massively oversold here. And each time we've been oversold down here, it has led to a bit of a bounce. This is a weekly chart, so weekly candles, you know, we're super extended here. We've got a bit of a range between sort of 92 and 94. And if the dollar index does bounce here over the next few weeks back up towards this 94, potentially 94.60, around this 94, I would expect cable to get to go to weaken the most. I think that cable, because of the Brexit stuff, I don't think that— I think no change to forward guidance. Yields are low, yields are below 0.7. Markets are well behaved. If I was a central banker, I would probably keep forward guidance in my toolkit for in case yields did rise in the future and financial conditions did tighten. And I'd want that tool in my toolbox ready to use if that happens. So I wouldn't use forward guidance. I think the market will be disappointed. And Cable here, you can see this stochastic on the weekly on Cable is still miles away from oversold. And so I think Cable's got a long way to go down. And so, and so this is my favorite trade. You can see we just tested this 130 here. And so if the dollar does strengthen, I think cable is going to be my favorite short. Yeah, I'll leave it at that.

I hope it keeps going higher, but I agree.

Yeah, I'm a little bit confused talking the pound down with your Britain flag in the background. I feel like I need a flag here. All right, we've got about a minute. Yeah, usual rules. What I'll do is I'll play the squawk out of my mic so you'll hear the announcement come out live. And I'm going to share my screen now so you can get the, the cross-asset class kind of feel for what we're looking at. So here, just a reminder for those new to the channel, we've got EUR/USD cable on the top, uh, gold futures in the top right here. You've then got the DAX, which I'm gonna flip over actually. I'm gonna put the Dow— got NASDAQ in the middle, the S&P here on the right, the Euro Bund, German Bund, WTI crude, and the US 10-year on the, on the right-hand side, bottom right. Okay, I'm gonna put my mic on now with the squawk. Okay, you'll hear everything come out live. Okay, should be about just, uh, 10 seconds now.

10 seconds. Unchanged as expected, and the dots look for 0.1, 0.1, and 0.1, and 2.5 for the long one. So that's all unchanged. Policymakers see rates near zero through its policy forecast horizon, which runs through to 2023. One sees liftoff from zero in 2022, four see liftoff in 2023. Yes, and Beth does not see inflation rising above 2% before 2023 there. So again, that's quite dovish. The long-term forecast for GDP, 1.2— 1.9% from 1.8, though the long-term jobless rate 4.1 from 4.1.

Just while they're going over those, the Fed on hold until inflation at 2%, set for moderate overshoot— some of the wording that's come down on Bloomberg— leaves rates near zero. And as the Squawk was saying, they're holding it then through that new time horizon. That's completely as expected on that front. Uh, the Fed expects to maintain current Fed funds rate until labor market has reached levels consistent with assessments of maximum employment, inflation has risen to 2%, and on track to exceed that for some time. So that last bit is the kind of soft talking about a timeline. On track to exceed that for some time is the words that they've used. The Fed says it will aim to achieve inflation moderately above 2% for some time so it averages at 2%, repeats its commitment to using its full range of tools to support the US economy, seeks to achieve maximum employment, inflation at 2% over the long run. I'll put the squat back on.

That could impede the attainment of its goals. Its assessments will take into account public health, labor market conditions, inflation, inflation expectations, financial and international developments. Vote was 8-2, 8-2 vote here. So to quickly ground that market action at the moment, very, very muted after this. So just to recap on the main points: rates, as we expected, unchanged. And a quick look at that statement has got quite a few changes, but as we noted, there is some new language there. So we are reposting the language changes to the feed for those who like to see those sorts of things. Going through the main points once again, median view appropriate Fed funds rate end 2020 0.1, in line with the prior, end '21 0.1, end '22 0.1, and end '23 0.1 as well. Long run dot 2.5%, and that's unchanged. The median forecast of policymakers for rates to stay near zero through 2023, but one sees liftoff in 2022, four see liftoff in 2023. And in terms of the other language, median Fed forecast do not see inflation rising above 2% for 2023. Again, we were looking out for something like that. It's to maintain current Fed funds rate until labor market has reached levels consistent with assessments of maximum employment and inflation and has risen to 2%, on track to exceed that for some time. And it aims to achieve inflation moderately above 2% for some time, so averages 2%, it says. And it also says it's prepared to adjust monetary policy as appropriate if risks emerge that jeopardize its goals, saying that it will take into account public health, labor market conditions, inflation, inflation expectations financial and international development, and the vote was 8-2. Very little market reaction.

Yeah, I'm just gonna, um, just gonna turn the squawk off for a second, and I was just gonna say, yeah, I, I, for me, on initial glance, and I'll go through it now, I wouldn't get too— I mean, I know the dollar blip lower, equities had a slight bid, and gold saw a little flurry. That would be indicative of a slightly dovish type reaction, but To me, there's not a lot here on the top surface that would warrant a sustainable move in that fashion. They're keeping the rate low through '23 with the new projection on the rate, I think is as expected. What I was going to do here is just quickly show you, uh, two things. So let me just change over my screen and we can have a chat and review now as we're going. So this is the actual statement. The red was the previous and the green is the addition. So what was in the previous statement and the green is what's been added this time around. And I've had a quick skim through this. There's not actually a great deal there that for me warrants a really extreme dovish-type reaction just out of the actual statement language. So if you go on the Federal Reserve website, here's that table of the 4 metrics that they define in their projections going forward. And here you can see the rates to remain where it is at 0.1. That's the, the expected part. The longer run, they still see it the same. Perhaps maybe some people might have thought they could have been a bit more bullish on the fact that long-run rates, which are unspecified in time, could be a little bit higher, but that's not not materialized. And then just going through, change in real GDP— I mean, look, they see that that's quite, that's quite a significant revision on the upside, if anything. Um, unemployment rate, they see dropping to 7.6. So these both, these figures are more bullish than the ING estimate in terms of more optimistic what they thought about the US economy. PC inflation they're seeing it pick up. So 1.2% from 0.8% previous, and kind of leveling out more as time goes on. And core PCE similar. So yeah, as I said, I know, I know the market reacted initially in a slightly dovish way, but for me, my initial take is reading the statement in combination with these projections. Uh, I think the market's right here in the secondary move to pull back Um, so yeah, a little bit messy in initial interpretation. I'd rather in this instance— don't know about you guys, but let it play out. I'd rather just let this market, rather than trying to second-guess it. My feeling is if anything, this should make the dollar strengthen, not weaken, off of what I'm seeing. But given the initial knee-jerk reaction, I'd rather stay out of it, let the market show its hand over the next 5-10 minutes. Maybe see the 15-minute close after the event and then wait for the press conference. But, uh, yeah, that's my take on the initial, initial glance. Anything, guys, from, from your side that you're seeing?

Yeah, yeah, yeah. So yeah, I was just saying in the chat that I was saying earlier this morning that if the dollar dips down— let me just share the screen. If the dollar dips down, there is a support area. This is a dodgy trade and I wouldn't be trading it like right now, but if— excuse me, no, don't do that. So you see the dollar index here, there's a big area of support around this, um, sort of 92.57 area, 92.50, around these lows. You've got yesterday's low, you've got the low on the 10th of September, and you've got the lows from back in August and late July. Big area of support, this. And if the— and so the dollar dips down into support, finds support, and then rallies. And so I'm hoping the dollar's going to rally here. You've got this big trendline resistance here, a dollar index. If this trendline resistance breaks, there's going to be profit takers there. That hopefully should drive us back up towards like the September high around sort of 93, sort of 65. And above there, you're going to be testing that 94 area. I've noticed that cables just tested that 130 on the upside. See if we get 5 minutes. So we've got that 130 test on the upside here, slammed into it, found resistance, and we just rotated off of it. It's, um, early days. If this, um, if the 92.50 level breaks, I'm not interested. The trade thesis is invalidated. But if the 92.50 level sort of holds, I'm going to be bullish the dollar in the near term and to the back end of September, and I'm gonna—

I'm gonna short cable. Cool.

Yeah, I'm just having a look. The dollar now starting to get a little bit of traction. I still think it's a bit early to draw those conclusions, but as I said, my, my take is maybe a little bit caught flat-footed on the initial knee-jerk, and this to me is more in fitting with some of the ensuing moves now of what I've seen. I just saw a couple people picking out as well, um, a descent over the AIT, Kaplan Kashkari Fed dots would suggest rates on hold through 2023, but some were looking for hiking cycle to start in 2022-23. And that as well would act as a little bit more of a bullish dollar signal in combination with those other factors which I also mentioned. So now you start to get a little bit of follow-through I must say equities though and fixed income are pretty marginal movement. The bulk of the reaction at the moment is happening in the FX gold space. So a little bit of dollar strength now. The Dixie's just coming up to the high it was printing, uh, shortly into the kind of US session earlier post the data that came out earlier today and some of the volatility that we're seeing around that. So touch of dollar strength. Cable now coming down to test that initial low that was seen, uh, early, mid kind of morning if you're in London. And consequently, with dollar strength, euro bit of pressure, just coming down to test around the low print of the, the intraday session now. Yeah, but equity, fixed income on, on train— well, on move really. Sorry, Sam.

Yeah, and I was just gonna say, I mean, you've got— I don't need to share my charts, as you can see, guys, if you look at AMTS here. So the top left, you've got euro right on that low of the day Pound is basically on probably the most important area of support of the day, 1.2958. And gold is, it's just coming to its morning and afternoon support and a bit of a trend line if you wanted to have that one. So decision time, uh, basically coming here for, for the dollar-related markets. I would just be a bit wary about, you know, if it hits the low, hit sell straight away. Let's wait and see how we close. Uh, those, yeah, in minutes. Obviously we've got Jerome Powell speaking shortly. It's not one that you're going to want to jump straight into, but yeah, if anything, I'd be waiting for those to close to then get a bit more momentum to the downside. But at the moment, the equities are unchanged. Uh, the dollar is strength, yes, but it's on an area people will be taking profit right now, or people that believe uh, we're gonna go high, would be looking to get long. So I'm gonna stay out, wait for those to hopefully break, and then look for a continuation lower.

But at the moment I'm, uh, watching.

And I've actually— speaking—

yeah, sorry, just saying here, gold just breaking through the European opening low in the futures, and also uh, the afternoon low that we printed here in London. So 65 just breaking, you can see that break technically just creating a bit of a run in prices short term.

Yeah, absolutely. And you know, even I've just got the same gold chart, same levels, and I've got a trend line on from the 9th, and it's just respecting that a bit. And as you know, this is where people need to be looking at the close of the candles for that confirmation. Last thing you'd want to be doing is getting in now, and then the 15-minute candle doesn't actually close below there, and that's when you get that reaction to the upside. So just be patient. Obviously, like we said, we've got Powell speaking in a bit. It's a different story if we close below there. It's a different story if the euro-dollar closes below its low of the day. It's a different story if the pound closes below 1.2958. At the moment, we just hit them and we've reversed as people taking a bit of profit.

Yeah, just looking at one asset class which is really more indirect than direct, which is obviously oil. And oil's been pretty, pretty bullish in the last 24 hours or so. And yeah, just having a look here, just coming up to retest of the highs we printed just a short while ago, around an hour or so. But yeah, I mean, if you think about those Fed projections, they're certainly a little bit more upbeat, revising them up. From obviously the depressive state that they saw things in June, which understandably we were looking for the upgrade, but perhaps a little bit stronger. Does that give oil, uh, indirectly, as I said, a little bit of a bump just to alleviate any of those demand kind of concerns? There's obviously tons of risk factors at the moment present for that in regard to the vaccine implementation, the trade war, the so on and so forth. But quite interesting here, oil quite favorable here. Um, no real strong dollar reaction so far, but overall some degree of optimism, at least from where we were back in, in June. So quite interesting there with oil back now, you know, in a $40 handle. But yeah, look, that— those moves elsewhere are pretty much reversed now. So I think now that's happened, it's about just wait and see. Got to sit on the hands now, just wait for Powell to come out. And then, you know, let's see what he's got to say. He's obviously going to get a ton of questions, of course. Guys, what type of questions do you think are going to be fired at Powell? Obviously you've probably got AIT, of course. Then any more details that he might be pressed on with that, on specific timings, perhaps the QE, uh, the purchase composition in terms of the maturities. Um, the fiscal situation, obviously he's not going to expressly talk about that in the statement. Do you think we're going to hear any, any, anything on that? And any other areas that you'd be mindful of from a Q&A format? Take that as a no. So yeah, I mean, really, they're the 3 main things I'd look for. Myself. For those who haven't created these types of events before, the general rule of thumb is, having even attended these events myself in person, in the case of the Bank of England, for example, there's definitely a hierarchy of the press in attendance. And so typically what you tend to see then is the main, more pressing, market-sensitive questions come first. As the questions then go on it gets less and less kind of interesting, also then less potentially market-moving in that respect. Um, all right, well, while we've got a bit of time, just quickly gonna run through— obviously, if you're joining us on YouTube, let me just quickly show you the YouTube channel and how it's best for you guys to make use of it. I, I had a look at the stats earlier today and I think there's about at least a third to 40% of people that come on our YouTube channel that aren't subscribers. So if I can ask you a huge favor, please subscribe to the channel. You know, we love putting out content. We actually put out freely available content every day, albeit it's slightly delayed from what our internal traders would get. But every morning I put out— so our channel, just hit the subscribe button. Click the bell icon, you'll get notified whenever we go live. And basically I have a category, so every morning for our traders, I do this about 7 AM in the morning. It goes up publicly usually around 9:30, 10 AM in the morning London time, so it is delayed. Um, but I cover all of the overnight news, the close on Wall Street, what happened in Asia, digesting the news, what does it mean, why is it important, is it important, and how subsequently might the day play out with what we, we know in terms of a calendar. So there's my macro kind of briefings every morning. Sam does a, you know, Sam's strength lies in, in different ways. He's much more technically oriented in terms of the way he trades, and he does a really great video every Sunday evening where he puts out his trade setups that he's looking out across asset for the week ahead. We then got Eddie Um, he does more kind of trending topics but more single stock focused. So he does videos like TikTok, SoftBank, Tesla, for example. But he's much more specialist in, uh, I guess equity kind of micro level, whereas I'm much more macro. So again, hopefully we cover all the bases on the channel. And then we have a Tech in Finance. So one of our tech guys talks about algorithmic trading. For example, he did a series. We got the live events which we do. And one thing I'm going to start introducing is much more of an interview series. I had a really great chat with an ex-former, very experienced options trader, which is certainly an area which we don't trade ourselves, but obviously we've got contacts that we bring in to help the guys understand these other topics. Then breaking news ones. I think I was up about midnight this time last week when AstraZeneca's COVID-19 Phase 3 study got halted, and that happened between the closure of market hours. So again, I mean, this is what I do, so I jumped on the mic, recorded a short 10-minute video in the middle of the night because, you know, I like getting you guys up informed and as the news breaks, what does it really mean. And so hopefully my, my experience can, can help on that front. You know, why did gold Tank the other week, Abe resigns. So Abe resigned, the video goes out, you know, there's no delay in that sense. Hopefully we can be your kind of port of call for that. So yeah, if I could kindly ask you, you know, join the community, comment on the videos, all of us here will help respond. Absolutely. Um, we're quite active on Twitter, so just quickly to run through This is my Twitter account. So just my name is Anthony Cheung, is a full name. My, my handle is @awmcheung, so you can find me. I tweet quite actively during the day, more macro-related, um, talking about everything to that would apply to the four major asset classes we trade. So equities, FX, fixed income, commodities, infographics, charts. Crib sheets, pictures of me wearing a John Stockson vest. But, uh, yeah, that's what you can get from me. From Sam, as I said, much more talking about kind of the technical side of things. So here he's looking at different trades in gold today, for example, where he's looking at that oil for the weekly close. So his handle is— his name's S North and handle @snorth19. And then Alex works really closely, Alex Clark, with our traders on our intensive training programs. So if you just jump on amplifiedtrading.com, you'll be able to find a trader section, and we run intense training programs for newbies or experienced traders, and we can kind of cater to both over whether one week period or a 5-week period. And in the 5-week period, we actually have our guys trade our capital. So we put them through a process of some pre-learning. We then put them on simulated period, and we then let them trade a live funded micro futures account with the opportunity to become a fully bona fide backed Amplify full-time trader. Alex very much involved with that, with Sam and myself. And so you can follow Alex, Alex Clark, and his handle @alexclarkfx with his new fiancée Renata. So congratulations to Alex as well. And I know Renata is watching, so hello Renata, hope you're doing well. But yeah, that's, uh, enough of the kind of the plug for the time being. Um, so those— I know there's plenty of you that are familiar with us, Amplitrading.com, here's the site, and just click on the trader section, you can find out more information from there. But yeah, hopefully there's a lot of people within the chat at the moment who have done some form of Amplify training at some point, so hopefully those people can testify to the experience they had. Um, touch wood, I hope we did a good enough job that they feel that they progressed and they've become better at what they're doing. So absolutely, um, would love for you guys to communicate with them. And yeah, so let's get back to, back to business. Uh, anything else, guys, that you've just been looking at on the charts while I've been talking there that you'd like to go over?

Yeah, I'll just, uh, I put the, the charts on my Twitter, guys, and I did say that in the chat, but I might as well go through them now.

And, uh, as Anthony said, looking at oil on the daily and week close, I'm really interested to see what happens here. Um, make sure I'm sharing the chart.

I am.

Lovely. Um, so yeah, we're— the high that we're on right now is, is the low from the 3rd of September. Really nice area of support, albeit a slightly bit choppy, uh, late August, uh, mid to late July. 4022. What happens here? You know, I mean, I want to see where it closed the week. Above, um, bullish. Below, uh, I wouldn't be too surprised to see us drift back down. I know few people actually in this chat were, were sure oil, once we had hit this second March low, uh, back on the 5th of August, it was a long hold to be fair, and it would have been slightly painful on a couple of these days. Did then break the trend line, uh, and then continued lower, found a bit of support down, uh, but yeah, I'm really interested, really key, uh, level here that I want to see something happen. Uh, we're peaking, uh, shortly, and the dollar is going to obviously have some sort of reaction. I want to see what happened here. I know not everyone is fans of— but I think they can be just good guides, um, for the price and can be sometimes just another reason for, you know, the market to say, you know what, I agree with your view that we're going to go higher or lower. So for that one to the downside, you know, could be an absolute coincidence that it found support there, but you know, you have it on along with the low of the day, and we find support and bounce back to nearly the high. So I'll be keeping a watch on that. Any close below there, 15-minute onwards, I'd be looking for some downside pressure. And to the upside, obviously, if we, we push on, on a close, maybe we look to push higher. S&P, um, it's, uh, okay, looking okay right now for, for the bulls, but I, you know, you're going to want to see a daily close above this whole area, uh, and above, in my opinion, above the 34s. Um, I think it would be on a daily close, and definitely weekly, I believe then it's, it's next off all-time highs from my personal view. So something I would look to see and, and, and that accordingly. However, if we do have reversal or clock into the, uh, the close of play and finish lower, then suddenly the, the pivot level goes, and was talking about, it's a different story. And like I said before in the rundown, then you start getting the trend lines on, which held again bang on the, the interest rate decision. The market's looking at that. Therefore, you know, if it goes below, my view of all-time highs coming soon, well, you know, that's just not right for, for the moment. But yeah, some big levels there for, for gold, oil, and S&P that I'm really watching like a a halt for closes on 15-minute, but also, uh, the daily. And, you know, like I said before with euro, um, I'd still feel happy even this where we are that we do drift lower for now. But, uh, yeah, I've got my, my key areas marked up. Alex, I don't know if you want to talk about the, the dollar index, if you've seen anything on, on there. Those are the, uh, those are the markets I've got my, my eyes on.

Yeah, cool. Yeah, can do. Haven't mentioned the euro actually. I've been focused on cable, but there is a— there's quite a big trend line in the euro. Can I just share my screen please?

Oh yeah, yeah, go for it.

It's quite a big—

get rid of all this.

Where's my, um, chart here? So Yeah, on this, on this euro dollar here, looks vulnerable. We've got a giant daily trendline support here. And look at this, look, we— so that this rally here didn't really get very far. We went up to test 119 and sort of peaked out. And so the 119 area is a big area. If this trendline breaks on the downside, I think we come back down towards 117, and that will line up that 94 handle on dollar index. If we can get back above the 119 handle, then we'll be up testing back towards the 120s. Um, just to zoom in on that, you can see that we've literally test— we came in, we tested the trend line quite deeply, and we're now just above it. So I think the press conference will be interesting. That cable still holding on to the 130 handle. I'd quite like to— I quite like to sell cable, as I, um, mentioned before. Yeah, I think the dollar index can pop here. I think that dovish positioning across asset classes is extremely extended. I think the dollar index is going to struggle to, um, to move lower. I was looking at a previous time this happened, which was back here, back here when we had this down, we had this down move here into sort of 89, 88 area. You can see here on the first test we bounced, we came back in for a second test of the area, failed to close below it. And then consolidated sideways. I think something similar could potentially happen here where either scenario A, you know, we hold 92.50 and just bounce up towards 94, or scenario B, we actually do drift back down to test that, um, August low again and then go on alongside there back up towards 94. Either way, it doesn't really make a difference, you know, but dollar index is, um, sort of flat actually at the minute. So I think it'd be interesting to hear like Powell's comments on forward guidance. Um, but I fancy the bounce, I fancy the bounce. But like I said, just wait and see. I'll definitely wait till tomorrow. If the 92.50 holds tomorrow, then I'll definitely be more bullish the dollar into the back end of the month, and I'll probably use cable for that. But I think the EUR/USD looks good for a short if that, um, If that big trend line goes, that's a banging short all the way down to, um, the 17 mark, potentially even lower. We'll have to see. I think the markets are set up here quite nice. A bit oversold here going into the break, which isn't good. We've got a couple of minutes until the press conference starts.

Yeah, I'll, um, I'll play the feed via my mic. I'll keep my charts visible. The plan of action here is, unfortunately guys, we can't stay on all night being, uh, UK-based. Uh, Alex and I are pretty much at our desks from— well, I think Alex is, is super early, 5:30 in the morning. I think I'm, uh, I'm a little bit behind that, uh, at 6 AM. But obviously it's, uh, we want to be, um, we've got a few housekeeping things we need to do even after this. So we'll probably cover what they will listen to Powell deliver the initial statement, we'll have a listen to the first 1 or 2, 3 questions, and then we'll look to wrap things up. But then the interim period, if whilst we're listening to Powell, if you guys absolutely want to fire in some questions via the chat, we're more than happy to address them myself or the team. I can see Sam looks a little bit like the guy on Back to the Future, and like the future's changing and he's starting to go invisible. But, uh, you're back from New York, Sam. But yeah, Pal's coming on any moment, so, um, I'll get the live feed up and I'll, I'll make the charts visible. And then, uh, I, I've put out an invite as well to see if I can— there's some of the other guys trading this remotely to see if they can join us as well. So if they can, they'll join the chat as well in a moment. But yeah, we'll probably wrap up in about another 15 minutes. Any questions?

Sorry, background, uh, my background went there. Yeah, Mark, I'm always, always looking to buy the dip. I think, look, I think before the election we, we still do push higher, so I prefer to, to look for longs. I've got areas marked up where I completely would then say, you know what, I am wrong. Um, but you know, I've got my view and I'm, I'm sticking to that with, with the right risk management. And if I'm wrong, you know, I take a few losses on it and I'm happy with that, no problem, I'll move on. Um, but yeah, I believe we, we see the all-time high before the election and, and a bit more. What I really think is going to be interesting is, is what happens on the election night. And of course, we'll be, we'll be live doing the all-nighter, the, the long shift for that. Um, yeah, but what happens on that night and then thereafter, I think it's gonna certainly be interesting. Um, and anyone who was with us for the, uh, the, the UK election December 12th will know we're, we're committed to doing the all-nighter. I mean, by the end of it, it does go a bit, a bit gibberish and some of the stuff I'm sure we're talking about, but I'm looking forward to it. So yeah, do, do make sure you've, uh, subscribed to the channel, guys. And like, as like Ant said in the chat, any questions for any briefing, we're more than happy to, to answer those throughout the day.

Yeah, the other thing, um, as well that I'm more than happy to do is that if you guys have like content videos that you, you'd want us to cover, I know Eddie does a really great job of this, but absolutely happy to have, um, to do content on demand in that respect. But look, Powell's starting now, so I'm going to be quiet. Let's have a listen in. We'll still be fielding the chat though while he's talking if there's any way we can help.

We have taken forceful actions to provide some relief and stability, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy. Today, my colleagues on the Federal Open Market Committee and I made we've made some important changes to our policy statement, including an update to our guidance for the likely path of our policy interest rate. Guided by our new Statement on Longer-Run Goals and Monetary Policy Strategy that we announced a few weeks ago, these changes clarify our strong commitment over a longer time horizon. Before describing today's policy actions, let me briefly review recent economic developments.

Anthony Cheung.

Economic activity has picked up from its depressed second-quarter level when much of the economy was shut down to stem the spread of the virus. With the reopening of many businesses and factories and fewer people withdrawing from social interactions, household spending looks to have recovered about three-quarters of its earlier decline. Nonetheless, spending on services that typically require people to gather closely including travel and hospitality, is still quite weak. The recovery in household spending also likely owes to federal stimulus— stimulus payments and expanded unemployment benefits, which provided substantial and timely support to household incomes. Activity in the housing sector has returned to its level at the beginning of the year, and we are starting to see signs of an improvement in business investment. The recovery has progressed more quickly than generally expected, and forecasts from FOMC participants for economic growth this year have been revised up since our June Summary of Economic Projections. Even so, overall activity remains well below its level before the pandemic, and the path ahead remains highly uncertain. In the labor market, roughly half of the 22 million jobs that were lost in March in April have been regained as many people returned to work. The unemployment rate declined over the past 4 months but remains elevated at 8.4% as of August. Although we welcome this progress, we will not lose sight of the millions of Americans who remain out of work. Looking ahead, FOMC participants project the unemployment rate to continue to decline. The median projection is 7.6% at the end of this year. 5.5% next year, and 4% by 2023. The economic downturn has not fallen equally on all Americans, and those least able to shoulder the burden have been hardest hit. In particular, the high level of joblessness has been especially severe for lower-wage workers in the services sector, for women, and for African Americans and Hispanics. The economic dislocation has upended many lives and created great uncertainty about the future. The pandemic has also left a significant imprint on inflation. For some goods, including food, supply constraints have led to notably higher prices, adding to the burden for those struggling with lost income. More broadly, however, weaker demand, especially in sectors that have been most affected by the pandemic, has held down consumer prices, and overall inflation is running well below our 2% longer-run objective. The median inflation projection from FOMC participants rises from 1.2% this year to 1.7% next year and reaches 2% in 2023. As the economy began its recovery, COVID-19—

just quickly, he's still going, but I've just put in the chat a couple of his comments here. And I just thought that quite interesting. Household spending looks to have recovered about 75% of its decline. Economic activity has picked up from depressed Q2 levels, and household spending has recovered 3/4 of earlier decline, and seeing some signs of improvement in business investment. I mean, that all sounds pretty good in terms of— what he's saying is a little bit more balanced, obviously still mindful of all the unemployed people at the moment. Overall activity economically remains well below pre-pandemic levels. Path remains uncertain. Obviously it needs a bit of balance, but perhaps just giving equities just a little bit of relief. There was a moment, a little flutter, when he's making some of those more upbeat comments in the dollar. I wouldn't— nothing too committed as yet though that would really warrant, I think, coming to a trade from what we've heard thus far. But we continue to listen.

The Federal Reserve's response to this crisis has been guided by our mandate to maximum employment and stable prices for the American people, along with our responsibilities to promote the stability of the financial system. We remain committed to using our full range of tools to support the economy in this challenging time. The changes we made in today's policy statement reflect our strategy to achieve our dual mandate goals by seeking to eliminate shortfalls from maximum employment and achieve inflation that averages 2% over time, as we articulated in our Statement on Longer-Run Goals and Monetary Policy Strategy. We view maximum employment as a broad-based and inclusive goal and did not see a high level of employment as posing a policy concern unless accompanied by signs of unwanted increases in inflation or the emergence of other risks that could impede the attainment of our goals. And we believe that achieving inflation that averages 2% over time helps ensure that longer-term inflation expectations remain well anchored at our longer-run 2% objective. In turn, well-anchored inflation expectations enhance our ability to meet both our employment and inflation objectives, particularly in the new normal in which interest rates are closer to their effective lower bound even in good times. Hence, as we say in our statement, with inflation running persistently below inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%. We expect to maintain an accommodative stance of monetary policy until these outcomes, including maximum employment, are achieved. With regard to interest rates, we now indicate that we expect it will be appropriate to increase interest rates gradually to maintain the current 0 to 1/4% target range for the federal funds rate until labor market conditions have reached levels, levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time. In addition, over coming months, we will continue to increase our holdings of Treasury securities and agency mortgage-backed securities, at least at the current pace. These asset purchases are intended to sustain smooth market functioning and to help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses. We believe the strong policy guidance we are providing today will serve the economy well by promoting our goals through the many possible paths the recovery may take. Of course, as we note in our policy statement, we would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of our goals. The Federal Reserve has also been taking broad and forceful actions to more directly support the flow of credit in the economy for households, for businesses large and small, and for state and local governments.

Preserving the flow of credit—

Just having a quick look at the S&P here. We're just having a retest up and around the high that was seen in the late European morning. Obviously, the breach of what we've had now since the press conference has begun was that initial rejection we had that was around that double top from the 9th and the 10th in the futures. So quite interesting level of technical resistance here, 18.25 now in the S&P. So equities just a little bit of a bullish move as the press conference goes on. FX still pretty mixed, continues to chop around a bit. Tino's disinterested.

At the moment. Crisis has passed, we will put these emergency tools back in the toolbox. Emphasized before, these are lending powers, not spending powers. The Fed cannot grant money to particular beneficiaries. We can only create programs or facilities with broad-based eligibility to make loans to solvent entities with the expectation that the loans will be repaid. Many borrowers are benefiting, benefiting from these programs, as is the overall economy.

But for many others, getting a loan that may be difficult to repay may not be the answer.

In these cases, direct fiscal support may be needed. Elected officials have the power to tax and spend and to make decisions about where we as a society should direct our collective resources. The fiscal policy actions that have been taken thus far have made a critical difference to families, businesses, and community communities across the country. Even so, the current economic downturn is the most severe in our lifetimes. It will take a while to get back to the levels of economic activity and employment that prevailed at the beginning of this year, and it may take continued support from both monetary and fiscal policy to achieve that. We understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission. We are committed to to using our full range of tools to support the economy and to help assure that the recovery from this fiscal difficult period will be as robust as possible. I would like to take a moment to recognize the passing of our friend and colleague Thomas Laubach. His outstanding analysis and advice have been indispensable to the FOMC and have played a key role in the policy decisions that will define this era. Of the Federal Reserve. He will be remembered for his intellect but also his kindness, his equanimity, and his dedication to achieving our mission on behalf of the American people. We will miss him.

Thank you.

I'll be glad to take your questions.

Okay.

Q&A coming up. Good afternoon, Chair Powell. Nick Timiraos from the Wall Street Journal. Anthony Cheung. You've been very clear about the Committee's intentions on rates, not even thinking about thinking about raising rates, and today showing low rates even as unemployment falls to 4% and inflation rises to 2%. My question is about asset purchases. Does the guidance today apply to the current asset purchase pace? Are there any macroeconomic conditions under which you would favor increasing the monthly pace of Treasury and MBS purchases? And under what conditions would a decrease in the monthly pace of purchases be appropriate? Thank you. So we say in our post-meeting statement that we'll continue to increase our securities holdings at least at the current pace over coming months to sustain smooth market functioning and help foster accommodative financial conditions. That latter part is an updating of our guidance to reflect what I've been saying in these press conferences for some time and what other central banks have acknowledged, which is that the purchases are to foster accommodative financial conditions as well. That amounts to roughly $80 billion a month of Treasuries and $40 billion net per month for MBS.

So we do—

we do think that these purchases have been effective in restoring market conditions and have supported the flow of credit to households and businesses, including by fostering more accommodative financial conditions, which, of course, we think is a good thing. So in terms of going forward, I would just say this. There are— various ways and margins that we can adjust our tools going forward. And we'll continue to monitor developments, and we're prepared to adjust our plans as appropriate. I suppose the question I have is, why give guidance on one policy tool but not give guidance on the other policy tool when the Fed has talked about those two policy tools working together? So we think our policy stance is appropriate today, and we're prepared to adjust it going forward. Forward as we, as we see appropriate. And today we believe that particularly this very strong forward guidance, very powerful forward guidance that we've announced today, will provide strong support for the economy. Effectively, we're saying that rates will remain highly accommodative until the economy is far along in its recovery. That should be a very powerful statement supporting economic activity. Now we're buying $120 billion in securities per month. Across the, across the Treasury curve. That's also adding to accommodation. We do have the flexibility to adjust that tool.

All right, well, look, guys, I'm gonna, um, I'm gonna call it in terms of our sharing on YouTube.

Uh, I know, guys, we're gonna stay on for a little longer to, to just kind of see this through, but for everyone else, I just wanted to say I hope it was, uh, insightful. I hope you might have learned something. I hope the, the kind of the pre-rundown, the watching it live all the way through to, you know, listening in on the Q&A and what to look out for, I hope it all made sense. Um, there's quite a few of you here that are new to the channel on YouTube, so once again, uh, just to remind you, please, we'd massively appreciate it, uh, if you subscribe to the channel. We love engaging with all of our users. We We love putting on these live free events. We do it fairly regularly for big market news-driven announcements. We do briefings every morning, fundamental, technical. So yeah, any questions at all, we can only fit so much in, obviously, in one, one hour or so session. So any comments at all on the videos, just get involved, ask questions. We're happy to help in that way. If you're more interested in learning in more detail with potentially then also training with us with the prospects of becoming a fully bona fide Amplify Trader, trading our capital in terms of our trading division, then check out the website amplifiedtrading.com. But yeah, that's it. I'm gonna, um, gonna wrap it up, guys. Anything you'd want to add?

No, just, just thank you very much for joining us as usual, guys. And like I said, it's always great to see familiar faces and new ones as well. I've just got a few messages on Twitter from guys saying they're enjoying it and this is their first time tuning in. So it's always great to obviously have the familiar faces, or names I should say, and new ones. I hope everyone has a great rest of their day. It will be interesting to see how Asia takes this, so keep an eye on that morning briefing tomorrow. No pressure, looking forward to that.

Yeah, thanks guys, thanks a lot.

Yeah, cool.

Cheers, Alex. Uh, thank you, Sam, as ever. And I will see you again, I guess, uh, in a couple of hours' time.

Yeah, absolutely.

See you guys' faces more than my wife's, but, uh, there you go.

Yeah, yeah.

Okay, cheers, Gordon. Take care.

Thanks, Gary.

Always a pleasure. Ben, thanks very much.