Fed Meeting Summary: Did They Cut Rates?

All right, people, we've got wartime Federal Reserve meeting here. Not really wartime, but I wore my vest just for fun. So we're going to break down— we have Jerome, Supreme Leader Jerome Powell speaking to us. Once he's up there, we'll kind of give some commentary on what's going on today. And anyway, should be fun. All right, here's Jerome Powell. We'll, uh, we'll chime in here.

Good afternoon. My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people. While the unemployment rate remains low, it has edged up. Job gains have slowed, and downside risks to employment have risen. At the same time, inflation has risen recently and remains somewhat elevated. In support of our goals and in light of the shift in the balance of risks, today the Federal Open Market Committee decided to lower our policy interest rate by a quarter percentage point. We also decided to continue to reduce our securities holdings. I'll have more to say about monetary policy after briefly reviewing economic developments. Recent indicators suggest that growth of economic activity has moderated. GDP growth— GDP rose at a pace of around 1½% in the first half of the year, down from 2.5% last year. The moderation in growth largely reflects a slowdown in consumer spending. In contrast, business investment in equipment and intangibles has picked up from last year's pace. Activity in the housing sector remains weak. In our Summary of Economic Projections, the median participant projects GDP to rise 1.6% this year and 1.8% next year, a touch stronger than projected in June. In the labor market, the unemployment rate edged up to 4.3% in August but remains little changed over the past year Labor demand has remained at a relatively low level. Payroll job gains have slowed significantly to a pace of just 29,000 per month over the past 3 months. A good part of the slowing likely reflects a decline in the growth of the labor force due to lower immigration and lower labor force participation. Even so, labor demand has softened, and the recent pace of job creation appears needed to hold the unemployment rate constant. In addition, wage growth has continued to moderate while still outpacing inflation. Overall, the marked slowing in both the supply of and demand for workers is unusual. In this less dynamic and somewhat softer labor market, the downside risks to employment appear to have risen. In our SEP, The median projection for the unemployment rate is 4.5% at the end of this year and edges down thereafter. Inflation has eased significantly from its highs in mid-2022 but remains somewhat elevated relative to our 2% longer-run goal. Estimates— estimates based on the Consumer Price Index and other data indicate that total PCE prices rose 2.7% over the 12 months ending in August, And that, excluding the volatile food and energy categories, core PCE prices rose 2.9%. These readings are higher than earlier in the year as inflation for goods has picked up. In contrast, disinflation appears to be continuing for services. Near-term measures of inflation expectations have moved up on balance over the course of this year on news about tariffs. As reflected in both market- and survey-based measures. Beyond the next year or so, however, most measures of longer-term expectations remain consistent with our 2% inflation goal. The median projection in the SEP for total PCE inflation is 3.0% this year and falls to 2.6% in 2026 and to 2.1% in 2027. Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. At today's meeting, the Committee decided to lower the target range for the federal funds rate by a quarter percentage point to 4 to 4¼% and to continue reducing the size of our balance sheet. Changes to government policies continue to evolve, and their effects on the economy remain uncertain. Higher tariffs have begun to push up prices in some categories of goods, but their overall effects on economic activity and inflation remain to be seen. A reasonable base case is that the effects on inflation will be relatively short-lived—a one-time shift in the price level—but it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed. And managed. Our obligation is to ensure that a one-time increase in the price level does not become an ongoing inflation problem. In the near term, risks to inflation are tilted to the upside and risks to employment to the downside— a challenging situation. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate. With downside risks to employment having increased, The balance of risks has shifted. Accordingly, we judged it appropriate at this meeting to take another step toward more new— a more neutral policy stance. With today's decision, we remain well positioned to respond in a timely way to potential economic developments. We will continue to determine the appropriate stance of monetary policy based on the incoming data, the evolving outlook, and the balance of risks. In our SEP, FOMC participants wrote down their individual assessments of an appropriate path for the federal funds rate based on what each participant judges to be the most likely scenario.

All the way down to maybe 3% by the end of the year.

The median participant projects that the appropriate level of the federal funds rate will be 3.6% at the end of this year, 3.4% at the end of 2026, and 3.1% at the end of 2027. This path is 1/4 percentage point lower than projected in June. As is always the case, these individual forecasts are subject to uncertainty, and they're not a Committee plan or decision. Policy is not on a preset course. The Fed has been assigned 2 goals for monetary policy: maximum employment and stable prices. We remain committed to supporting maximum employment, bringing in inflation sustainably to our 2% goal and keeping longer-term inflation expectations well anchored. Our success in delivering on these goals matters to all Americans. We understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission, and we at the Fed will do everything we can to achieve our maximum employment and price stability goals. Thank you. I look forward to our— Thank you.

Discussion. There we go. Pause for a second. So we'll take questions now. Just 2 things if you caught in there. They're, they're calling on, we are seeing a weakening labor market. That's why we're cutting. They have to have a reason to cut. If you cut just to cut, that means like, what data do they know? It might crash the stock market. And like, because why are they cutting so heavily? If they cut a full percentage point today, for example, and said everything's great, we're just going to cut a percentage point. I think as an institutional investor would say, oh shoot, they know something we don't. We should sell as well. So they're trying to thread a needle here. Like I mentioned in 1995, Through 2000, they kind of thread this needle of cutting, but it looks like more cuts to come this year. I'm sure the first question will be around what's the plan for next cuts. But anyways, we'll go back to the dot plot in a minute. Let's hit this first question.

We're strongly committed to maintaining our independence, and beyond that, I really don't have anything to share.

Oh, it came back to live. You're good. Keep it going then. Just a quick follow-up. I'm sorry. Can you? You and other Fed officials have spoken extensively about the impact of tariffs on inflation. Although perhaps with many companies appearing to eat the tariffs, tariffs may be impacting the labor market and other parts of the economy instead. Do you see that as a possible outcome here, that tariffs are the reason we're seeing some slowing, particularly in the labor market, rather than in inflation? They've been blaming tariffs for months and months and months.

You know, it's certainly possible. You know, we were— we're beginning to see— we have begun to see goods prices showing through into higher inflation. And actually, the increase in goods prices accounts for most of the increase in inflation, or perhaps all of the increase in inflation over the course of this year. Those are not very large effects at this point.

Wait, did he say—

And we do expect them—

Did he say all?

To continue to—

All inflation this year has been from tariffs?

Of the rest of the year.

That's kind of a crazy comment.

And, you know, it's also possible that there may be effects on unemployment, but That I would say if you're looking at why employment is doing what it's doing, that's much more about the change in immigration. So the supply of workers has obviously come way down. There's very little growth, if any, in the supply of workers. And at the same time, demand for workers has also come down quite sharply, and to the point where we see what I've called a curious balance. It's you know typically when we say things are in balance, that sounds good. But in this case, the balance is because Both supply and demand have come down quite sharply. Now demand coming down a little more sharply because we now see the unemployment rate edging up.

So yeah, immigration is down. That's very interesting. But to blame all of inflation on not the money spending that they're still doing is kind of crazy on tariffs. Chair Powell, do economic conditions and the balance of risks no longer warrant a restrictive policy setting?

So I don't think we can say that. What we can say is this, that over the course of this year, we've kept our policy at a restrictive level. And people have different views, but a clearly restrictive level, I would say so. And we were able to do that over the course of this year because the labor market was in very solid condition with strong job creation and all those things. I think if you start— go back to April and now look at the revised job creation numbers for May, June, July, In August, you can kind of— I can go along and say—

What he's talking about, they went and revised down all of the policies for job creation over the last couple years, which is kind of crazy. Like, there was a huge revision down, and they were like, oh shoot, uh, people actually didn't have jobs. They were putting out job data, they like, it was like, uh, like 7 out of the last 9 jobs reports all got revised down, which means whoever's doing the jobs reports probably isn't doing a good job, 'cause they all are revised down. It's not like some should be revised up, some are down, of them are overstated and then revised down later, which is kind of crazy. And so they're saying, we saw that, we go, crap, we should probably pivot and cut rates. And I'm sure the next follow-up question would be, why don't you cut more now? Anyways, they're trying to balance here where we've seen a huge weakening in the labor market like we just talked about in the tech sector specifically. Anyways, I'm curious what he says here if you want to keep going.

Basis point cut today. You know, I think we've done, we've done very large rate hikes and very large rate cuts. In the last 5 years, and you tend to do those at a time when we feel that policy is in place and needs to move quickly to a new place.

So he's saying that's not, not at all what we're seeing right now is this in place.

I guess I'm just, you know, trying to square the shift in the rate forecast in the SEP towards more cuts than just 3 months ago with the fact that the forecast for unemployment didn't change.

Yeah, I think you could think of this in a way as a risk management cut because If you look at the SEP, you see the revisions, and we see the new numbers. And I didn't— I don't want to put too much emphasis on payroll job creation.

So the question was, why change?

It's just one of the things that suggests that the labor market is very strong.

Nothing has changed much.

And that tells you that it's time to take that into account in our, you know, in our policy.

So just looking at the SEP once again, the median participant has inflation higher than previously expected by the end of next year. And the Fed not getting back to the 2% target until 2028. So I guess I'm just wondering how you characterize the risk to price pressures of kicking off a series of cuts at this point.

Yeah. So I would look at it this way. We, we fully understand and appreciate that we need to remain fully committed to restoring 2% inflation on a sustained basis. And we will do that. At the same time, we've got to weigh the risks to the 2 goals. And I would say since really since April, to me, the risks of higher and more persistent inflation have probably become a little less. And that's partly because the labor market has softened, GDP growth has slowed. And so I would just say that, that, that the risks there have been less than one might think. And in terms of the, of the labor market, what we're seeing is It's— unemployment is still low, still at a relatively low rate, but we're seeing downside risks.

He mentioned earlier too that they're saving their bullets a little bit, but we'll see.

Michael McKee from Bloomberg Radio and Television.

This guy's pretty sharp. I like him.

I'm a little confused by your explanation of, well, the Fed cutting rates because of unemployment if you think that most of what's happening in the employment area is related to immigration, which Great question. How do you see that as more important than inflation, which has remained almost a full percentage point above your target? Well, I was saying that what's happening in the labor market has more to do with immigration than it has to do with tariffs. That was the—

But we've stopped immigration, so that should help the labor market.

I don't see that all of what's happening in the labor market is due to tariffs. I mean, you clearly have a slowing in immigration. You clearly have a slowing in demand, which is now perhaps more than that in supply. And we know that because the unemployment rate has ticked up. So, so that's how— that's what I meant by that.

This comes back to maybe a political Fed.

Every year since 2015, the SEP has forecast that you would hit your target 2 years later. And this year, this SEP says you're going to hit—

see the guy on the left of him just smiling?

2% does not seem to be in sight. Does that suggest—

What a great question. Yeah, 2% has not been hit.

Really achievable?

It's always 2 years later.

And any credibility problems for you in telling people that that's what you're going to do if you can never reach it? Big question. I mean, you're right. It does say we're going to get to 2% inflation in 2028 at the end of '28. But that's, you know, that's literally how you put the projections together. You're, you're writing down a rate path. Which is designed to create—

That was a phenomenal question.

—over the course of the, you know, timeframe, 2% inflation and maximum employment, too. So that's—

But 2% is the target. You should be below it sometimes, above it sometimes.

Nobody knows where the economy will be in 3 years. But the nature of the exercise is to write down policy that you believe would return to the 2% goal over the— at least by the end of the exercise.

That was a crazy question, man. That guy is brave.

Thanks so much. Elizabeth Schulze with ABC News. The latest inflation report shows that prices are still going up across key categories for many households, including groceries. What will the Fed do if prices pick up more?

So our expectation, and you can see this consistently through the year, has been that inflation will move up this year, but that the The effect, basically because of the effects on goods prices from tariffs, but that those will turn out to be a one-time price increase as opposed to creating an inflationary process. That that's been our forecast. Pretty much every forecast, all the individual forecasts say that. We can't just assume that though, right? We we have to. Our job is literally to make sure that that is what happens, and we we will do that job right now. Situation we're in is that we see, we see inflation. We continue to expect it to move up, maybe not as high as we would have expected it to move up a few months ago. The pass-through into— of the tariffs into inflation has been slower and smaller. The labor market has softened. So the case for there being a persistent inflation outbreak is less. And so that's why we think it's time for us really to acknowledge that the risks to the other mandate have grown and that we should move in the direction of neutral. So it's funny how much they keep bringing up tariffs and immigration for a long time.

Policy changes really affecting them.

And our 2 goals are in tension. This is quite an unusual situation. How do we decide what to do? Because our tools can't do 2 things at once. What we do is we ask which is farther from— how far is each from the goal and how long is it expected to get to the goal? So, and then that's— we think about those things and we see, as I mentioned, we have been— our policy had been really skewed toward inflation for a long time, really. Now we see that, that there's downside risk clearly in the labor market. And so we're moving in the direction of more neutral policy.

How concerned are you about the slowdown in the jobs market for households at home, especially younger Americans struggling to land a job?

So it's, it's an interesting labor market. And obviously, we, we think it's appropriate that, that we reduce our rates so that we become more neutral, which will be— which presumably will be better for the labor market. You, you see people who are sort of more at the margins. So kids coming out of college and younger people, minorities, are having a hard time finding jobs. The overall job finding rate is very, very low. However, the the layoff rate is also very low. So you've got a low a low firing, low hiring environment, and the concern is that if you start to see layoffs, the people who are laid off won't there won't be a lot of hiring going on. So that could very quickly flow into into higher unemployment. In a in a healthier economy, healthier labor market, there would be jobs for those people. But now the hiring rate is very very low. So that's been a growing concern over the last. Last few months. And it's one of the reasons why we think it's appropriate that we begin to— begin to shift our policy focus toward a more balanced one.

I love this guy, too. He's always—

Steve Liesman, CNBC. Mr. Chair, in the past during rate cuts, you used the word recalibration. And I wonder if you pointedly did not use it this time. And in fact, when you said policy is not on a preset course, did you mean that as sort of the opposite of Are we meeting to meeting, data point by data point? Are we in the process here of getting back to neutral? Thank you. So I think we are— we're in a meeting-by-meeting situation. We're going to be looking at the data. You know what, let me— let me say a word about the SEP, really, here. So we often point this out. The— what the SEP is, it's— it's an accumulation— an accumulation of the individual projections of 19 people. Showing what they believe at a particular moment in time to be the most likely path for the economy, and thus the appropriate path for monetary policy as well. And as you know, we don't we don't debate or try to agree on what that is. We just write them down and accumulate them. We do sometimes discuss them, and so we always say we're not on a preset path, and we really mean that. The actual decisions we make are going to be based on the incoming data that we're getting out, and this one isn't happening. So that's, that's what I would say. For getting to my follow-up question, which was, is the dispersion in the outlook a sign of uncertainty of policy in the, in the, in the meetings to come? Thank you. You know, it's, it is such an unusual situation. Ordinarily, when the labor market is weak, inflation is low.

So what he's referencing before we pause for a second, the dot plot is very spread out. They have a— and we'll pull it up here again in just a minute, but the projections you just mentioned, they have quite a, you could call it a category of governors that don't quite agree. Typically, those dot plots are much tighter. We are seeing a broad range of swing. If you actually, maybe can you share my screen real quick? You'll see on here, this is what they published today. Let me scroll back up. You'll see economic projections. I mean, this is quite a big range of dots. This is appropriate, you know, midpoint target range. You can kind of see here. This is quite a spread. Typically these dots are much more centralized around a specific spot. So he's now going to answer that question of why it's so spread. And again, you see here core inflation, PCE, unemployment rate, they all are looking somewhat good. They're not projecting any big, big problems or big things. We see maybe GDP slowing a little bit, but we'll see. They've been quite wrong in the past on GDP rate. It'd be fun to superimpose this on previous projections to see how closer, inaccurate, but my understanding is they've actually missed these quite a bit. Back to the data question. So let's hear his answer to this, why the dot spread is so spread out. You see these, look at this big outlier here, these outliers down below. So I'd love to hear his answer.

Really strong, that's when you got to be careful about inflation. So we have a situation where we have two-sided risk, and that means there's no risk-free path. And so it's quite a difficult situation for policymakers, and it's not at all So it's not surprising to me that you have a range of views. It's not so much about having different views for the path of the economy, but it's partly that. But it's also partly about what's the right thing to do in light of this— of the tension between the 2 goals. How do you weight them? How worried are you about one versus the other? And so it's natural. I think it would actually be surprising if you didn't have a pretty wide range of views. Based, you know, in this kind of highly unusual situation. And we do. So— but, you know, we get together, we discuss, we have a great discussion, and then we decide what to do and we act. But you're right there that it is— it's a wide dispersion of views. And I think that's understandable and natural in the current situation.

Hi, Victoria Guida with Politico.

You've talked a lot about Fed independence and the importance of it over the years, but As markets have questions about what exactly President Trump's intentions are with the Fed, what would you point to as the things they should be watching to determine that the Fed is still making decisions based on, you know, the economic outlook rather than political considerations?

Good question.

Look, it's deeply in our culture to do—

He's not going to answer.

To do our work based on the incoming data.

We'll just look at incoming data and make decisions.

He's not going to answer that question, but it's a good question. Everybody who's at the Fed really feels strongly about that way. So, you know, you'll know it by the way we talk about what we're doing, by the speeches that people give, by the decisions that we make. You'll know that we're just still going to do that. That's all we do. And we don't— we don't frame these questions at all or see them in terms of political outcomes. I think when you get to another part of Washington, everything is seen through the lens of does it help or hurt This political party, this politician. You know, that's that's the framework. And I think people find it hard to believe that that's just that is not at all the way we think about.

I do find it hard to believe at the Fed.

We're taking a longer perspective. I'm one of those. We're trying to you know serve the American people as best we can. So I I'll preface that statement.

I think they are generally speaking trying to be neutral, but I think they get swayed by by politics.

You know, I would say they're swaying. We're doing our work exactly as we always have now, and people are. They're making their arguments, and we're having a really great discussion around these challenging issues.

So—

Do you see the court case around Lisa Cook as being related to questions of Fed independence? You know, I see it as a court case that it would be inappropriate for me to comment on.

No answer. Yep. Let's pause for a second. We'll look at the markets here. Can you share my screen? So this is, uh, if you see here, look at a 1-day chart. You're seeing, um, Bitcoin, ETH, Tesla. I just picked a few here. We can go— actually, let's go back. Quite a spike. Uh, let me just come to S&P 500. So a little bit of movement here, but overall, I mean, nothing crazy. You know, we haven't seen a little bit of movement here, but as this— as his speech has gone on, we've seen markets selling off, come back a little bit. Let's look at, uh, one other index here. Take the Dow Jones. So look at a 5— here's a 5-day chart. You can kind of see some moves here. We saw a little rally into the, into the meeting and then now a chop back down in during the conversation we're having right now on how he's talking about the economy. So with that, let's keep going. Thanks, Mr. Chairman. Edward Lawrence from Fox Business. So we saw the preliminary benchmark revisions down 911,000. Yeah, I'm talking about the jobs revisions were the first negative revisions we've seen since December of 2020. You know, how can the Fed base important decisions on rate and what to do with the interest rates on data that seems to be, as you've called it in the past, noisy? Great question.

So on the QCEW, the revision that we saw was almost exactly what we expected. It was amazing how close the expectation was. So, and the reason for that is For the last bunch of quarters, there's been almost a predictable overcount. And I think the Bureau of Labor Statistics really does understand this, and they're working hard to fix it. It's got to do— of course, it has something to do with low response rates, but it's also got to do with what's called the birth-death model, because a good amount of job creation happens around new companies and how many go out of business, how many are founded. And it's just really hard. You can't survey for that. You've got to have a model that predicts that. And it's quite difficult to do, especially when the economy is undergoing big changes. So— and they've been working on that and are making progress on it. But, you know, the data we get is still, well, good enough for us to do our work.

So they knew it was going to get cut. You just knew.

We have issues around data right now. Exactly. They predicted it. It's about low response rates. That's happened all over, all over, really. Response rates are just lower to surveys now, both in and out of the government. And it's no great secret, you know, we want higher response rates and we need those to have, you know, less volatile data. And the way to get that is to make sure that the, that the agencies that collect the data have sufficient resources to drive higher response rates. It's not a complicated problem, but that's what it takes. It's not a mystery. That's what it takes. The other thing I'll say, Edward, is in the case of the jobs, job creation, the first The response rate is quite low for the first month, or lower for the first month. By the time you get to the second or third month, you're still collecting responses for that last month— for that prior month. And you get to the place where the data are much more reliable by the second and certainly the third month. So it's not that we don't get the data; it's just that we get it a little later.

But if— well, for the benchmarks, if that holds, it's 51% of the jobs that we thought were there weren't really there. Shows a weaker market, job market coming into this year. If you had had that information, would it have changed your mind related to where the interest rates should be? Great question.

Calling his bluff a little bit about him not knowing the data. We have to look at life looking through the windshield rather than the rearview mirror, as you know. And all I can tell you is we see where we are now and we take appropriate action. And we took that appropriate action today.

Hi, Stephanie Rule, MSNBC. Treasury Secretary Scott Bessen has said that the Federal Reserve The Fed, according to him, suffers from mission creep and institutional bloat. He's now calling for an independent review. Would you support an independent review, or are you open to any sort of reform in any areas?

Boom. Great question. He's not going to answer it, but that was a great question.

I'm not going to comment on anything the Secretary says or really any other officer says. So in terms of reform at the Fed, you know, a lengthy and I think very successful process of updating our monetary policy framework. I would say there's a lot of work going on behind the scenes around the assets we have in the Federal Reserve Bank system, Federal Reserve System, and at the board. Are they the right size? We're actually going through a 10% headcount reduction. Through the whole Fed, including the Board and all the Reserve Banks, the employment— employment at the Fed at the end of that will be basically at the same level it was more than 10 years ago. So we will have had zero job growth for more than a decade. That's interesting when we're finished with that. And I think we'll probably— we'll probably do more than that. So I think we're— we're certainly open to constructive criticism and ways to do our jobs better. But not an independent review? We're certainly open to, you know, to always trying to do better. Yeah, Scott's been pushing on him hard.

Thanks, Mr. Chairman.

What evidence do you see of tariffs showing up in inflation? Well, if you can take goods, just sort of the broad goods category, and last year goods inflation was negative. If you go back 25 years, that was the typical thing, was, was that goods inflation was— goods prices generally went down, even adjusting for quality. So that was not the case during the pandemic. Of course, goods inflation went very high, but we had essentially returned to zero or slightly negative inflation. Now, I think goods inflation over the course of the past year is 1.2%, which doesn't sound like a lot, but it's a big change. So we think— I mean, analysts have different views, but we think it's contributing, you know, 0.3 or 0.4 or something like that to the current core PCE inflation reading, which is 2.9%. So it's contributing. What seems to be happening is that, you know, the tariffs are not— mostly not being paid by exporters, mostly being paid by consumers. Really, the companies that that sit between the exporter and the consumer. So if you if you buy something and you sell sell it through retail or you use it to make a product, you're probably taking those a lot of those costs on and not able to pass it fully along to the consumer yet. That's a lot. That appears to be what we're seeing. All of the essentially saying it hasn't hit the consumer as much as they thought. In the middle, they'll tell you that they have every intention of passing that through in. Time, but they're not doing that now. To the consumer, the pass-through has been pretty small. It's been slower and later, slower and smaller.

Because earlier this year, it's funny, if you pause for a second, Jerome Powell just was saying over and over again, tariffs on this— in this meeting, tariffs are going to cause huge inflation. We can't cut rates because of all the tariff effects that they're going to be passed on to consumers. And now he's kind of eating his own words saying, well, they aren't being passed on consumers. Businesses are just eating them. one side or the other, uh, and they're working quite well. Um, it's kind of an interesting stance here from 6 months ago. Their rhetoric was this is going to cause mass inflation, we have to keep rates high because of what President Trump is doing. Um, and it's proven to not be true so far. He just said in his own words— you can keep going.

The evidence is it's very clear that there's some pass-through. Um, I, I also wanted to ask If you could share with us the conditions under which you might consider leaving the Fed in, in, in May. Well, I have nothing new on that for you today.

Big question. You could say he was just awkward asking that question, too. You just saw it just choke out of his throat.

Hi, Mary Missarivo with Bloomberg News. I just wanted to follow up on, you know, one of your answers just a couple minutes ago. You know, we've often heard you talk about how you and your colleagues you know, do not think about politics, this does not enter the room. But one of your new colleagues—

Is in the cabinet of Trump, yeah.

Right, where everything is seen through this framework of politics and of what party is being helped. And that person is still employed by the White House. How can markets and the public interpret, you know, some of his speeches, for example, and then some of, you know, the forecasts that we see today. I mean, the median for this year was moved because of the introduction of his forecast. I'm talking about the number of rate cuts seen this year. What do you, you know, what do you say to markets and the public that are trying to interpret—

So this Monday, a new economic adviser, Trump's economic adviser, got put into the Fed Governors Board.

12, 12 vote— 19 participants of of whom 12 vote, as you know, on a rotating basis. So no one voter, you know, can really— the only way for any voter to really move things around is to be incredibly persuasive. And the only way to do that in the context in which we work is to make really strong arguments based on the data and one's understanding of the economy. That's really all that matters. And that's how it's going to work. I think that's— that is the way the institution— that's in the DNA of the institution. That's not going to change.

And then I wanted to ask about a Gallup poll that showed that Americans now have more confidence in the President than the Federal Reserve when it comes to doing what's right for the economy. Why do you think that is? And, and what's your response? What's your message to the public?

Our response is, we're going to do everything we can to Use our tools to achieve the goals that Congress has given us.

Cutting question that he's not going to answer.

And we're not going to get distracted by, by anything. So I think that's something crazy, actually.

Maybe hit pause. He's not going to answer this question. Show my screen here if you can. This is a screenshot. If people can see this, we got, you know, clearance rate here from— this is from JPMorgan Chase. This is their yield, 3.8%. It's lower than the Fed's. Meaning, I mean, it can mean a lot of things from here. One analysis would be the market believes it is safer to borrow money from JPMorgan Chase and be backed by the balance sheet of JPMorgan Chase than it is to be backed by the balance sheet of the Federal Reserve. That's what that number is telling us, which is pretty significant. And back to that, she mentioned a Gallup poll where A lot of people have more confidence in the president than they do in the Federal Reserve on economic policy. And I would— I mean, so far, to give back to that data, so far the Fed has been wrong and the president has been correct. Now we'll see how that plays out, but everyone criticized the tariff war. It was horrible, it was terrible, it was gonna end the world. We have record tariff inflows. It seems to be working very well. Markets are at all-time highs despite a Federal Reserve that's not been cooperating. That didn't lower rates when maybe they should have. And now they're seeing the effects of a labor market and maybe we'll dip into a recession or a silent recession, not an actual recession, but a silent recession in job and labor market. Maybe we already are in that. I've just seen that anecdotally. I see a lot of people without jobs. I think our— I think their labor statistics are way off, which we just talked about 3 times in this session so far and how they collect data. And there is a case to be made that the Federal Reserve been too late and too slow to lower rates because they've been so politically motivated to be anti-Trump and to be against— and to some point, you know, you want to keep the Federal Reserve independent. So if Trump pushes hard on something, you have to almost push against it and do the opposite of what he says to show that you're an independent Fed, which I totally agree with. And so I think Trump actually made a poor move being so public about his disdain against Jerome Powell. I think, I think Powell would have lowered rates earlier if Trump wouldn't have tweeted all those things. And if you remember this, multiple times this year, Trump has said, you know, too late, Powell. He should cut rates. He should cut rates earlier. And what that does to Powell is make— he has to now anchor his heels in and say, well, we're an independent Fed, so we actually can't cut rates because Trump is asking us to cut rates because it would look bad for the rest of the world. And I think Trump made actually a poor decision doing that. I think we would have lower rates today if Trump's ultimate goal was to lower rates. He should have used a little How to Win Friends and Influence People, kept it private, even praised Jerome Powell and met with him privately and said, Jerome, we got to cut rates. And they did. Finally, they had a private meeting, but it was after these public tweets had gone out. And then everyone started questioning the independence of the Fed. And Trump tried to kick out Powell. I'm going to replace the guy. I'm going to kick him out. I'm going to— And what that does is make Powell dig his heels in. And so I think Trump made a poor decision. I think the tariffs were really good. I think he's done really good things besides the rhetoric to Jerome Powell because it's made him dig his heels in. It's made rates stay up longer. And it ultimately did not get the goal of what President Trump wanted was him to capitulate and to lower rates. And so I think it was just a poor— I think it was poor people management from a How to Win Friends and Influence People perspective. Which phenomenal book, by the way. I live my life, I try to at least live my life by that book. I've read that book probably 12 to 15 times. I read it almost once a year, 'cause I forget all the stuff inside of there and I have to relearn it. That book has changed my life more than anything and I think, man, it comes back to, I believe a lot of the moves this year have been very politically motivated one way or the other, which is unfortunate because I think we could be in a much better place economically if there wasn't so much headbutting from them, so.