EMERGING MARKETS | CHINA A.I. DEEP DIVE W/ EMXETF

What is up everybody I'm in an Airbnb in Huntington Beach, California So I'm assuming the Wi-Fi or the 4G is good enough here and you guys can hear me I'm just gonna continue moving along like you can This is gonna be a fun day today. We got the FOMC rate hike decision coming up here in a couple minutes here Let me actually get the title changed or get some of our friends in here. Welcome. Welcome everybody How you guys doing welcome Mary and And Drunken Miller Apostle Jordan Oop, I hit mute everyone Zach Pumpsky Electra Ramo We got tin foil in here Mark Jonah Jonah's profile picture is a jacked leopold. That's actually pretty interesting Corey, Contrarian, Raj, Howie, Uta, Super Kings, MB, Sarahunt, V What is up everybody welcome to stocks on spaces live live Will Fed rate hikes incoming rate hikes incoming question mark All right stock market talk we got a title change Let's hit some out send out some of these invites as well Not everyone knows we are starting early here today and then we will jump right in to the conversation. This should be a good one There aren't really any earnings after the close as well. All right some invite sent out Couple things to know going into this FOMC meeting first of all you guys a lot of you guys do know that I did end up taking a My largest prediction market bet ever that the Fed is not going to raise rates now that bet has since gone against me pretty aggressively At when I took it was like 40% chance we raise rates something like that or sorry 60% chance we raise rates 40% chance we keep rates steady We are now sitting at a point to where if this loads See stock talk down below Ryan you can hear me right if I can get a thumbs up sir. Thank you. I'm here Yes, yes, yes, my computer is being slow and loading Even when I'm on the wifi it's not necessarily working but I'm assuming when I was checking earlier on the prediction market There's like 15% chance we keep rates unchanged something around that right now so it is We're getting a rate hike. We also do get a summary of economic projections along with this meeting The SCP that tells you what the Fed is looking what they expect going forward and includes the dot plot Which is telling you where the Fed expects interest rates to end the year at and the year after that at There was a JP Morgan comment this morning that this may be the last Fed dot plot that we get which could be the case But we are five minutes away 90% chance there about a raise rates by 25 basis points here is 0.25 percent would bring us up 3.75 to 4 percent There's about a 10 to 15% chance that they leave rates unchanged. I see Greg Gavin down below Shout out to him if he wants to come up Stock talk. I know we talked a little bit about it yesterday How you feeling for this FOMC meeting? There's definitely a lot more anticipation into this one than the last couple Maybe even years of FOMC meetings Yep as usual. It's like the most important meetings to the last one right? You left on my tweet. It's the reporting meeting of my life Yeah, it's kind of a week how we think about every time but no this one is actually pretty important because Mostly of where yields are all the curves, right? I mean yields are at a major multi-decade breakout spot on the long end of the curve and You know, I know we say every time. This is the most important FOMC meeting This time it really is important because it is going to be a Factor and deciding if we get a blow out and yields or not I Think it's probably the first time in a long time where a hike might actually have a positive impact on bonds and a negative impact on yields which is counterintuitive but probably the first time and Over five years where that would potentially be the case I talked about this a little bit on the discord stream that I did last night but Really the thinking there's quite simple There's a shot that a hike today could convince the markets That the Fed is willing to fight inflation and that therefore on the longer-end expectations Inflation expectations might actually come down Which might bring the longer end of the curve down so that is a possible scenario here obviously That's not necessarily what will happen, but that is a possible scenario And what you would probably want to see if you're a bull here and you're watching the bond markets if you're an equity bull and you're watching the bond markets and You know, we're pretty much at a 93% of a hike here. You'd like to see yields Come down on that on that decision so Two minutes here two minutes all right Ryan to miss but live FOMC in the title first we'll do that All right two minutes away We also do get a summary of economic projections with this one a dot plot all that stuff does come out with this But we are looking at that interest rate decision right here in two minutes Like I was saying about 90% chance to leave rates unchanged about 10% Sorry 90% chance that they raise rates about 10% chance that they leave rates unchanged as with the CME fed wash tool saying Prediction markets are closer to 15% chance that they keep rates unchanged We're gonna find out here in a minute reminder the Kevin Worsh press conference comes up at 2.30 PM Eastern we're about 30 minutes away from that one you know Worsh and Powell are two very different people Two very different Fed chairs So you know a lot of the rules that we kind of were able to learn in for the last couple years You know you kind of got to retest and relearn and I think today is a big big part of this You know Worsh doesn't want to be bullied and it does kind of feel like he's being bullied a little bit by these markets by the bond market to do a rate hike But we'll see all right 60 59 did now. Okay. Sorry. I got both my tweets ready I do have my prediction market bet that we are going to Leave rates unchanged and I have written that off as a loss pretty much for loss So that is what it is Okay, the anticipation here we go 1200 of you guys already in here get excited for this decision. It's a Do you have the new squacker that's still getting faster than you That is fake news Yes, fake news news squacker. Yeah Fed raises this count rate a quarter point to 4% 12 to nothing was the vote for the Fed funds rate action That votes unanimously for the first rate increase since 2023 Fed officials see Fed funds rate at a medium of 4.1% at the end of 2026 same at the end of 2027 I'll there 3.9% at the end of 2028 3.6% at the end of 2029 and 3.2% and the longer run All but two officials who submitted that see at least one more 2026 height Bed official see December 2026 27 unemployment of 4.1% versus 4.3% And no, no, not all Fed decisions. I'm beneficial see 4 PC inflation of 3.4% in December 2026 2.5% in December 2027 Again the fed raising rates a quarter point as expected the S&P futures pulled back From that last Move higher now trading up about 22 There you have it So four federal officials think we get two more rate hikes in 2026 6, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 12, think we get one more and then two think we get zero more. Wow. Alright, what's the market doing? I'm having a chance to look. I'm going to look in one second. Um, spies near the low day. I WM just came down very hard from high of day all the way to low day. Cues are pretty much unchanged here. Regional banks are tanking. Carries getting hit the hardest. I honestly, I know you don't have any interest in so far, but I would want to look at this one over the next couple months if we stay at this point and don't raise rates more. I do enjoy this company for the long term, but I don't want to buy it in a raising rate high environment. Alright, we are digesting this a little bit more. FOMC press conference is in 28 minutes now. They did hike. I will say the new squacker was pretty lightning fast on that one. He did a good job. The dot plot says, like I was saying, four federal officials think we have two more rate hikes this year. 12 federal officials think we have one more rate hike this year and two said zero more. Now, Kevin Worsh probably did not put a dot plot on here, so this doesn't have everyone, but yeah. And also I will say next year's dot plot, they say that basically it's a higher for longer. All but four of the fed voting members think we're going to end the year next year above four percent interest rates to say we're going to end between three point five, three point seven, five. And then one says we're going to end between three to three point two, five. So there's one real dovish fed member. I wonder who that is, but 16 out of 18 fed members expect to rate out. Yeah, okay. And then unanimous decision. Interesting. So I was telling Ryan that I thought a good. That's surprising. That's surprising. I was pretty surprised. I mean, unanimous part surprising because like there were a couple of there were a couple of members of the fed, even going into this meeting that said it wasn't. Then thing was the right thing to do. So that's pretty that part surprising, not the height part, but I think the unanimous votes somewhat surprising. Yeah, I agree. I agree that unanimous vote was off the hook. I would never saw that coming. And you got now most from saying they see another rate hike this year. All right. What is the 30 year doing? That is the real question here. 30 and 10 year. Let me look. Ten year was already down about 0.043% going into that decision and it barely budged from there. So it's pretty much where it was prior to the decision. It's still a 49% standard. If the long end of the curve doesn't come down from this decision, there was no point to raise raise. Yes. Yes. That's true. 30 years make a new love day though. Yeah, 30 years coming down a little bit more than the 10 year. Yeah, that is nice little move lower. Markets are coming here pretty strongly. Okay, we do have the press conference I go saying here 26 minutes. Now the summary of economic projections does tell you a little bit about what they're looking at going forward. It does seem like he is going to talk about a little bit of a hawkish term. But yeah, my prediction market is 0 and I will be not using that for a while again. How could this happen to me? Oh, pretty. I'm pretty muted reaction on individual stocks, even with the index is moving somewhat. I've got no videos. They might be waiting for a frame to speak. Cues are actually liking in SMH 2 so far. Yeah, 30 years continuing to move lower. That 5.312 or so through 4. Yeah, 30 years, 30 years making new lows. Okay, that is what we needed. I would be curious to see if this what this also does to grow. The year is soft as well. It's a project to move up on that. Yeah, two soft as well. Homebuilders getting home builders and regional banks are going to hit the hardest right now. XHB, KRE are going to hit the hardest, which is weird. Like higher interest risk. Yeah. This call this pressure for him is going to be important. If he tries to just not answer questions again, that could be problematic. The marker is going to want some clarity on what he's thinking. He's not there to you. I think there's a scenario where he he plays the. I had to go with what the panel decided type of of role. And just kind of try to stay in between trumping them. I mean, he voted for it too. Yeah, but I was on sand like he just had to like go with the crowd type of messaging. And maybe trump comes after all the governors. If I was him, I would have been the lone dissenter and shown to trump and been like, hey, listen, I voted for it. Don't come after me. You could have done that. I wonder what Trump says. I think that does call more into. That's what how about credibility? Oh, I think you get. Yeah, I mean, I will. He got to think he's me. He's been Trump's been really on a roll lately. The last couple days to going after everybody. So I got to think this is just another person he's going to go after. He's just not having a good week. I'm waiting for the truth social comment. It is going to come out in the next five minutes. The dumb fed chairman. Who even. I did this. Sorry. I. And you're not quite at low a day, but it is coming back down. I'm a little worried to see that. It doesn't hold on to it tomorrow. It felt. Kind of obvious we were going to get to move lower today. If it got this kind of what happens tomorrow. Are these yields actually able to kind of get a second day in a row of moving lower? Worst case scenario would be a spike tomorrow. I don't think there has been a single day of. Let me see. I don't think there's any been any days of back to back action with yields actually coming material. Yeah, the 10 year is winding down slowly here. 30 years now down point zero five eight. That's pretty big move. All eyes continue to be on interest rates. 10 years. All that stuff here. I remember back. Which day. I meant the 30 year down point zero five eight. Not the 10. Yes. Yeah, yeah, yeah. It is now basically at its highs from 817. It's where it was at. Close to where it was on 999. The problem is. We are moving lower. Boy, these are still elevated levels and we really haven't. Taken down any of the thing that we've done over the last two, three months in these yields. Yeah, it's going to take over a hundred. It's like a happened one day. It's going to take a trend. Boy, I'm just saying it's it's at 102. Like that's it's have to cause behind the yields. There probably is only so low that they can even get it themselves. Yeah, I'm seeing crew. It's a lot of hundred and two. Did it have a spike a little move lower on this one though? I know the Fed doesn't really impact it, but. Nah, not really. No movement. We still got 2000 you guys in here. We've got it a couple times. Press conferences in 21 minutes. We're going to listen to it live on here. Crystal clear quality shout the Ryan. So yeah, get ready for that. You should definitely make sure you're following the speakers up here as well. They will improve your experience on this app. Let me try and find. How the note changed. Here's a change in the Fed statement. I mentioned it's a little slow so I might take a second but. Yeah, 12 to zero vote. Raise rates. Economic activity is expanding in a solid plate pace while uncertainty. Remains elevated owing in part to the geopolitical developments domestic. Spending has been resilient productivity growth is strong and capital investment is robust. Job gains have kept with the workforce and the unemployment rate has changed little inflation remains. Elevated sorry inflation remains elevated today's policy action will support a timelier return to the. Committee will deliver price stability. This is a lot shorter remote of a note. That is what changed. This is what changed from last. Specialist today. Okay. All right. So market did move actually a little bit higher since our last looks maybe trying to reverse back now feels like we're in for a chop 30 minutes here next 20 minutes maybe. What is finally. 30 or four. But I'm really getting it consistent. Move in yields the 10 years rebounding now. This is this is a really muted reaction. I mean. Yeah. It's really muted reaction here. I mean. I want to hear see how we react to what he says. I think that's going to be more important than this reaction here. I mean I appreciate there's waiting for him to say good afternoon before the dump. Yeah. Good day. Good. I still. It is good day. Yes. I'm going to go on the. Second is good day. That comes out in a red tie. Hey look, if you look right now like from the like under the there are nobody is on the order book anywhere. So the market's having to go to both sides to find the quality. IE everybody's waiting for the presser in the Q&A. Come on 30 year. You've. Where can you is almost back to high day. Yeah, I WM just turned right back around. If we end the day with yields towards the highest of the day, we are probably in a dump. Oh, yeah. The only benefit like literally the only benefit of raising rates here. It's not going to. I mean like the Iranian speaker parliament just said. It's not going to print oil. It's not going to clear the straight. The only benefit of raising rates here is to attempt to calm down the bond vigilantes. If you don't see relief in yields from a rate hike, then what the fuck is the point? There's no point. So they better hope that this comes down the bond market. I mean, the bond market's already saying that they're too low right here, right? They raised it to 3.754 and the bond market's really saying you should be up around five. That's what the bond market's trying to tell us. I mean, as we're speaking, the 10 year yield is going up, not down. Bolt's been getting a new move day. You know, but this week lives up to its name. This week is just typically a tough week in the markets. And this one has been no exceptions so far. Rural is ship. And with that options, Mike, because you have so much options positioning rolling off on Friday, you've got a lot of like wacky moves, but the way the position set up right now, it's going to be tough to go either direction and tell that position closes out on Friday. A lot of the times now they start closing them out early. Don't be surprised if after the Fed's done today tomorrow they start unloading and moving, rolling this stuff out, especially the index stuff. Yeah, I think they're waiting for this to decide how they're going to roll out. Exactly. Meta Tesla all reversing now. Apple's holding well. Apple looks really interesting here. I mean, I thought that was interesting. Who's this morning, but when you say 2029, I you on, you know, two and a half, three years before we get any revenue from them go if they end up staying with it going back into the server business. I just don't see how any money in tech would be able to stay up if we catch, if interest rates spiked back up after this. Well, I mean, the big tech companies have lots of cash when they want to. I know they're burning it right now. Apple does not all of them. Well, I mean, they can slow their rate of spend, right? I mean, if they slow their Pat Peck spend Amazon, Microsoft, Google, Meta, you know, they all have tons of cash. The semis are still doing fine and cash. Do you like one of me, Evan? What are you posting a meme? Let me see. I'll give you my honest reaction. Trump after worse raises into it. All right, it's a good one. Let's put it up with a nest above. You really got 60 likes in one minute. How is that even? It's funny. I guess they really did like it. Oh, where are you trying to bring? I just I put that I put the Wolverine meme into chat. Gbt. I'm told I'm going to replace Wolverine's face with Trump and put out the frame. But I love it. It's pretty funny. Dude, that's a lot of likes really quickly, honestly. So people think it's funny. All right. I'm going to start pumping out memes now. Someone else host. No, I'm kidding. Wait, what did you use? Chat Gbt or Cloud? Did you say? I used to chat Gbt. Gbt is so much better with photos. Yeah, it is. It really is. It really is. I think Astra in general is better, but I think Astra is better on a pertoken basis than a fable to each their own. What's your most like post? I don't know. I actually might be at huge. No, that's really cool. I think it depends on your life in a minute. Right. 35,000 likes is your most like post, by the way. Elon Musk said he plans to find someone to replace him as acting CEO of Twitter. November 16, 2022. How did you find out what my best of my most like post was that quickly? Go to your profile and then if you click like the post tab, it like it comes down and you can see sort by and then popular. Oh, yeah, they added that recently. Stock talks got a banger too and he's got a couple 30k plus like bombs. Yeah, they're like four of them. All right, guys, I'm going to come back. I'm going to go down there. He's done talking. Guys, I already listened to live in here. I appreciate you. No, yeah, I can't listen to it there and here at the same time. So I'll catch him live and I'll come back and jump in real quick. Yeah, we will be playing that here in about 13 minutes when he starts waiting for it. You know, we have some crystal clear quality. Like I said, shout out to Ryan. We got this whole like we don't have to explain how he's doing it. But guy is in the matrix. Situation is monitored. Situation is being monitored. 30 year is a little bit off the nose, not that much, but we'll see. 10 year. Watch the TLT is still the highs though. Let's see. So it's the ENT. Sorry. 10 years still holding at pretty decent high levels. Yes. 10 years. The 10 years ups since the rate hike decision. Yeah, it is. We're at about 4.963 ish. Well, how many people did you say were saying there's more hikes coming in that would probably keep it up there. Yeah, pretty much all of them except for two said there's at least one more rate hike coming for said they see two more rate hike. Well, I mean, it would keep the two year up assuming that, but you would actually like to see the 10 year come down if the market believes that this is a legitimate fight against inflation because I mean, we're not we're not talking about 10 year forward rates here, right? The two year should be up on this and it's unchanged on the day now at reverse thoughts losses. But the 10 year, 30 year arguably should be down. I mean, they are down on the day, but they're not down since the decision 30 years slightly. Yeah, but I keep going back to the oil thing because I think that's more of the conflict is more of the issue, right? And all the count down a little bit into today, which is probably what helped some of the yields. I just think that's the higher correlation than those fed rate decision. Then I don't get it. High raise rates because they I think they're hoping that it's what in my perspective, they didn't want to surprise the market and the Fed funds futures wanted this hike. And they were probably hoping that this would bring yields under control. And I mean, again, the 10 year and the 30 year are are down on the day. So that's a silver lining. 30 year coming back down again here now. We just really got to wait for his commentary to really decide what this reaction is going to look like. But yeah, for sure. And honestly, we probably need to see what tomorrow's action looks like to. What's the follow through of this? You know what they say? The first three modes are the fake masts. It's just like, I mean, and I can see it because I'm looking at book map and I'm looking at some of the gaps like there's nobody is sitting anywhere on the order book right now. So like the market takes these big swings. There's just looking to find somebody to like try to fill stuff like nobody's doing anything. They're pulling offers and they're waiting for the actual information. Yeah, and we are a nine minutes away from getting that more information. And I do worry a little bit that worse is going to tell us nothing. Talk about task force, task force, task forces and we're just kind of in the same place again. I don't know. We'll see. Yeah, you got an over you got an over under on task forces this meeting. Well, give me give me eight task forces. I'll take it Ryan. I want to start with you. Then I'll talk on this one. We're getting close to this this FOMC press conference here. What are you kind of expecting worse to say and sound like here? Maybe you're some of the questions you think might be asked that I think. Yeah, I mean, I think pretty much guess what they're going to try to ask them. Somebody will ask him a political question that he'll dodge. I think it'll be fine on that one. They're going to ask them about the conflict and oil. That's going to be the probably the biggest thing they ask and they're going to ask like, do you think we're going to keep raising? I think those are the main questions. We're getting to know him a little bit, but we've only had two meetings with him, right? So I think people are still trying to figure out like what the undertones of him are. Like what's the, you know, between the lines going to be so I just don't think we're fully there yet to be able to get good read on him. But I think he'll be okay. The problem is he's not the most like confident sounding guy. So like I would like to hear like just personally, I would like to hear him just speak a little bit more absurdly. I know it's maybe not as personality, but hopefully he's like maybe worked on that a little bit. Just to try to give some type of like, hey, we're in control of the situation. Like, and not just food like not if he comes out there, start stammering and and start stuttering over his words and stuff again and having that shaken his voice, which I first I gave him the benefit of the doubt, right? First meeting, maybe second meeting, but now you know, your third one will speak with some confidence. That's what I'll be looking for. Stock talks, things are over to you. We got this press conference coming up here in a couple minutes. What are you hoping he kind of says? You know, what are you expecting here? I'm expecting him to be pretty ambiguous as usual. I don't think his ambiguity in the last couple of meetings is a product of him being new to the seat. I think a lot of, I mean, Ryan kind of alluded to that. I would maybe disagree with that part slightly. I agree with the rest of what Ryan said, but I don't think his ambiguity is a consequence of him being new to the seat. I think he's just being intentionally ambiguous. And you know, in the first couple of meetings, he seemed to imply that he wanted the bond markets to take the rails here and didn't want the Fed to have a reactive function to the bond markets. It seems exactly like the Fed is having a reactive function to the bond markets based on this decision. You know, I think if Fed funds futures weren't indicating a hike here, I don't think they would have hiked. But because Fed funds futures going into this meeting were up to 92%, they really didn't have a choice but to hike to avert surprising markets. And I think this is what, like me and Jay were talking about this on space yesterday. I think we were kind of speaking past each other to a degree, actually mostly agreed with everything that he said, but I think we were speaking past each other on the dynamic of like transparency versus markets surprising. You know, I think you can choose to intentionally be ambiguous and have less transparency in the Fed has traditionally had, which Warsh has made clear that he wants to do. I think you can take that role while also not wanting to surprise markets when they are pricing something. So I think you can on one hand say we want the bond markets to price rates as they see fit. We want to have less guidance towards the bond market and towards the equity market on where rates are going to be. But if the bond markets, if the Fed funds futures going into a meeting do want something, we'll still give it to them. I don't think those two things are mutually exclusive. So I think you can be ambiguous and run this sort of lack of transparency regime. I think you can do that while also not wanting to surprise market expectations. And I think that's what they did today. I think they were responsive to Fed funds futures and the bond market going into this meeting. I think they hiked because of that. I think they're well aware that core inflation numbers, X energy are at yearly lows. But in spite of that, they're hiking, I think because the bond market is sort of demanding it. And the reaction you would really like to see is bond vigilantes take a step back now now that they did that. And you're seeing a little bit of that today on the tenure in 30 year. Most of it's in advance of the decision and not in the fallout of the decision. So I think how yields act going into the end of his speech today matters a lot. And I think more importantly than that, how yields act into the end of the week matters a lot. If we see the tenure in 30 year reverse these losses into the end of the week, that will be a really, really bad thing because that means that not only have the treasury buybacks failed to calm down yields, which we saw a couple of weeks ago, but that the feds, a greens with the bond market will also fail to calm down yields. And then you really only have one lever to pull left, which is the war in Iran. And at this point, I think it's really, really tough to call if even ending the war in Iran will do what we wanted to do on the bond market side. I mean, there is no question. I was talking about this on our discord stream last night as well. There is no question that the war in Iran is the reason that rates turned around this year. The reason why it's obvious is you can go back to February 27th when the war started on any of the yield charts. And you'll see them turn around massively on that date. So there's no question that that was the acute driving factor for higher rates, the war in Iran. But now, months later, it is a much more complicated decision and that war because now it's a question of US and Germany. Now it's a question of whether or not foreign holders of US bonds will be willing sellers in a scenario where the United States leaves a conflict without victory. And so now it's a much more complicated risk calculus to leave the war. And so if this doesn't work, if this hike doesn't work to settle down the bond vigilantes at the end of the week, then like I said, you have one lever left, which is the White House is levered in the war. And as shitties it sounds, that may not be as effective a lever today as it was three or four months ago. So we're in a sticky situation. Hopefully, the bond vigilantes calm down after this hike. But for now, it's not looking like they're giving up too much ground here. The 10 year yield is still at 4.955 today. I mean, unless it comes down materially after Warsha's speech, yeah, that's going to be a bad thing. I feel like when you also throw in the backdrop of the conversation from this past weekend of the Golden Goose, maybe needing to be slowed down a little, it doesn't sound like a good combo. No, I'm forever optimistic. You know, once I start to lose that fear and start getting it, maybe that's the bottom and it's darkest before the dawn. But you throw in everything you said there and you add in the fact that the thing that's been driving us higher is being called into question more and more. I don't know. Does not seem like a good backdrop. No, it's not a good backdrop. That's for sure. It's definitely not a good backdrop. And I think, you know, we're running out of levers to pull is the difficult part here. I mean, the treasury has attempted to come to the aid of bond markets and so far has failed. We'll see if they want to use bigger buybacks as a way to continue to flex that. The White House has won lever, which is the Werner and which they have not yet pulled. But again, I think the reaction to that lever is becoming increasingly complicated, the longer the war drags on. Because again, people don't understand like there is an aspect in US equity, sort of US bond markets. There is an aspect of US Germany involved in the pricing of US bonds. Like the idea that foreign nations hold our debt and our debt is in demand by foreign nations is a function of US dominance on the global scale. And if we walk away from this war without like a discernible victory, if we just walk away, that could actually lead to yields going higher, which is the opposite of the intended effect. So, yeah, we're in a sticky situation here. I was expecting a bit more of a downturn in yields today on this decision. And this isn't that satisfactory of a move for me personally. Now, that could change by the end of the week. But we got in third and here we go. Yeah, let's listen. Good day. In the meeting just concluded, the FOMC decided to raise the target range for the federal funds rate by a quarter of a percentage point to three and three quarters to four percent in support of the Federal Reserve's dual mandate. The committee is continuing its policy of maintaining ample reserves in the banking system. As noted in the policy statement, released just a short while ago, economic activity is expanding at a solid pace. While uncertainty remains elevated, owing in part to geopolitical developments, domestic spending has been resilient. Productivity growth, strong. And capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little. But inflation remains elevated. Today's policy action will support a timely return to the committee's 2 percent goal. This committee will deliver price stability. Now getting to some further detail. Our decision comes at a time when the American economy appears to be strengthening. New hiring, private sector earnings, business capital investment. Each of these markers has improved in recent months and is pointing in a good direction. Credit flows have been robust, particularly for businesses. And as I said at the policy symposium in Jackson Hole, I would be hard pressed to describe broad financial conditions as restrictive. This view was widely shared by the committee. So we removed a dose of accommodation. Consider the geopolitical landscape of shocks and uncertainty. And you begin to appreciate the resilience of the U.S. economy. Given that resilience and the potential for even greater performance, an attitude of optimism is exactly what I heard inside the FOMC these last two days. One basic sign of strength is the state of America's labor markets. The jobless rate remains low at around 4.1 percent. And both job openings and weekly hours have been increasing. Unemployment claims on a four week moving average are running at levels consistent with full employment. So the labor side of the Fed's congressional remit is in good shape. Yet for more than five years, inflation has been running above target. So our predominant focus is on the price stability side of our mandate. The plain fact is that inflation is too high and has been for too long. This summer's inflation readings do not tell me that underlying trends have meaningfully improved. Based on the most recent CPI and PPI data, the 12-month change in total PC prices likely was around 3.6 percent in August. More PCE and CPI prices running at about 3.2 and 2.4 percent respectively. Too many categories are still posting increases above 3 percent on both a sixth and 12-month basis. I noted in Jackson Hole that overall commodity prices also bear watching. And over the intermeeting period, the prices of many of these key inputs have risen. Since my first FOMC meeting as chairman in June, my colleagues and I have been unequivocal in our commitment to price stability and to our 2 percent PCE inflation objective. At our July meeting, we all agreed that inflation remained too high and we expressed our joint readiness to act as circumstances might require. And a good majority of my colleagues and I thought the wives or course then would be to await new information in the intermeeting period. Last month in Wyoming, I expressed my commitment to a monetary policy discipline not to a decision. I defined the standard for action. We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Today, the FOMC decided that this standard has not been satisfied. The committee's unanimous vote shows our resolve to achieve price stability on a time lier basis. We aim to ensure that credit and financial conditions are consistent over time with our mandate that relative price changes in some sectors of the economy do not broaden. That inflation compensation in market prices stays low and that inflation expectations remain well anchored. This afternoon you also received the summary of economic projections. It reflects the views of my colleagues on the committee. But as in June, I have not offered a projection of my own. But like in June, I said I would faithfully discharge the summary of their projection. So here goes. In the summary's median projections, real GDP rises at 2.3 percent this year, 2.4 percent next year. The global PC inflation runs at 3.7 percent this year and falls to 2.3 percent next year. The unemployment rate holds steady at about 4.1 percent. The median participant judges that the appropriate federal funds rate to be 4.1 percent at the end of this year and to remain there next year. Inflation risks are to the upside while labor risks are roughly balanced. In my meetings these last few weeks, in Jackson Hole, in Asheville at the G20 meeting which the US hosted at a central bank conference in Basel, it was evident that most advanced economies are facing price pressures. Their central banks are making their own judgments consistent with their own remits. Our decision today reflects our best judgment in service to our remit. The Fed has a role in sustaining the economic progress happening in America right now and the rising opportunities that come with it. Those who are least well off have the most to gain from a durable expansion, a solid labor market and stable prices. We at the Fed are on wavering in our vital and straightforward purpose, full employment and price stability and a thriving American economy that sets the standard for the world. That will take a few of your questions. Chair, thank you for doing this. I'm Richard Eschibito with CBS. Let me navigate over my questions. Quarterpoint rate hike does not reopen the straight of poor moves. I wonder how you think these smaller rate hikes will be effective when it can't necessarily address the energy supply side of inflationary pressures. It's a good question, Richard. We cannot affect any individual price, whether it be oil prices, whether it be food stuffs at the grocery store. But what we can do and we'll do is ensure that any change in relative prices don't broaden out, don't have second and third order effects in the economy. That's what we're tasked to do and that's what we will do. Thank you, Colby Smith and The New York Times. When the Fed starts raising rates, it generally follows with a sequence of hikes. Is there anything different in today's assessment of the economic conditions that would suggest that the typical pattern does not apply? And I guess second to that, what impact do you expect higher rates to have at this juncture if the bulk of what is keeping inflation elevated is sending from supply shocks? So we're trying to get to more people. So now I get to cherry pick my preferred question from you, Colby. This won't surprise you. I'm not the forward guidance business. The decision we made today was a sober decision, serious decision, responsible decision, one that we have been preparing for and thinking about in my 110 or 20 days here. You heard from other people and the dots effectively. What their forecasts are. I'm not going to prejudge any future decisions we make. You might have heard me saying Jackson Hole, I committed to a discipline set of principles. I committed to look outside the window and see what I can observe. That's what I did in Jackson, that's what we did today. Thank you, Mr. Chairman, Edward Lawrence, firm, Fox Business. So the market priced in a 90% chance of a rate hike today. You don't want the Fed to lead the markets. Was this a market-led rate hike? And then with that, the bond yields are going up. That's one of the indicators. Is debt part of that issue? So I've said this before I'll repeat it. The Fed has an enormous amount of power. These are decisions we make. But getting the understanding right between financial markets and the Fed is a balance that I've long thought could be better struck. We made this decision today based on our assessment of the situation, based on our assessment of the trajectory for employment, based on our judgment on the strength of the economy. Sometimes the market tries to free-judge our outcomes. I'll observe market prices and see what they have to say. But today was our decision. Hey, Thompson, watch your thoughts. Elizabeth, open. Thanks so much. Elizabeth Schullsley with ABC News. Big picture. I wonder if you could tell us just what will this move today actually do for American consumers And I have to ask, what is your message here to President Trump who has repeatedly called to cut interest rates? Not raise them. I've got nothing for you on the discussion with the president, so, but I won't make that count as your question. On the American people, as I said in my prepare remarks, the least well-off are the ones who have the most to gain from stable prices. What we've done today was the right decision to deliver on the remit that Congress gave us to ensure stable prices. Moreover, I would say because of the underlying strength of the economy, because we are, as I mentioned, largely acting consistent with full employment, we can be focused on stable prices. Some months ago I said we will deliver stable prices. Today's action is consistent with that. Press your neighbor. Hi, how are you? Thank you. Tell us a little more about what changed from the July meeting when, as you noted, the Fed did stand pat until today. And as part of that, could you give us a sense of whether or not things like the retail sales report today suggested that demand is heating up and possibly threatening higher prices as well? Thank you. So, as you might know, I'm not a data point dependent guy, so I won't react one way or another to the data that shows up on our doorstep. But on your first question, I think the more important one, what transpired in the seven weeks since we last met? First I would say good majority of my colleagues seven weeks ago thought seven weeks is a good investment, it's a way to buy time so we can make a wise decision. I'll highlight three things that have happened in that intermeeting period. One is, I made a judgment seven weeks ago about the strength of the economy. There's been a pretty wide ranging set of data, including the labor markets that the economy has strengthened. You might have heard me say that in Jackson Hole a few weeks ago. It's a judgment that I have and the committee has. Second, inflation trends. I said in Jackson Hole, trends matter. I said in Jackson Hole, we need to look outside the window and interrogate reality. My judgment from weeks ago was the inflation summer trends weren't passing the test. I've seen very little information since that would make me reverse that decision. I've stuck with it. The third thing that's changed in seven weeks are geopolitics. There's no hiding from hot spots around the world. Our judgment about what is the most likely or least likely of the geopolitical situation has changed. All three of those things led themselves to a firm unanimous decision today. Hello, Jones, my nine-shot times. You said today's decision removes a dose of accommodation in your view and perhaps, if you could share views around the table too, or interest rates now at a level that you would describe as restrictive or not. Thank you. I've described previously, I found it difficult to describe financial conditions as restrictive. I think I said I was hard pressed. What I heard around the table in the last couple of days is my colleagues were hard pressed to describe it that way too. We removed a dose of accommodation so that financial and credit conditions would be more consistent with our ultimate objectives. That was the decision. That was our judgment and we'll continue to evaluate that prospectively. Thank you, Mr. Chairman. Steve Lee is the CNBC. I want to follow up on that question. Previously, most federal officials had described the rate as modestly restrictive. If you removed accommodation, could you give us your sense of where the Fed funds rate is relative to neutral? Some detail, if you wouldn't mind, on your sense of is there a short-term neutral rate you're aiming for and a longer-term neutral rate? Do you think in terms of those? In a word no, in a few words I'd say this, I've always been interested in neutral rate as an academic matter. Back when I learned economics, we used to think of it as a wixellian rate. It's a real equilibrium rate. It's useful academically. It's a discussion help us think about policy. Do I think it has any operational effect on decisions that we make today? No, I don't. Hi, Victoria Guido with Polina Co. I wanted to ask you've talked about how you don't like data dependence, including today. But heading into this meeting, there was a ton of focus on the August CPI. I'm wondering if you think that that was appropriate on the part of markets or if you've learned anything about how you might approach communications going forward? So market participants and reporters, I think generally over the course of the last decade or so, have grown accustomed, waiting somewhat breathlessly on a data point. That isn't my view. I was not waiting breathlessly on what any particular data was, whether it was retail sales this morning or a CPI print last week. I'll just reiterate, trends matter. Data points are noisy. Data point dependence is a dangerous preoccupation. It's not something that concerns me. Markets over time will come to understand how this Fed makes its decisions, what's relevant and not, and I wouldn't want to editorialize that for them beyond it. Thanks for doing this, Mr. Chairman. Zach Kalishek, the Washington Examiner. I'm just curious. A couple of weeks ago, the president sent out a message essentially threatening to cut off trade to certain countries unless rates were lowered. Obviously, an anonymous decision to do the opposite. What would you say to investors who sort of believed this is another test of the Fed's independence? And then kind of when was the last time you spoke with the president? Do you anticipate a post decision meeting or? You gave me a long menu from which to choose. They're all very tempting. I don't have anything for you on discussions with the president. And I'm not a Wall Street newsletter. Part of the independence of the Federal Reserve is we stay in our lane. Independence is a two-way street. We'll let people that do trade policy and fiscal policy stay in their lane too. That's how we can stand up here and call them the way we see them. Brian, Tom. Hi, they're Brian, Tom with NBC News. Just wondering if you could explain who is the least wall often? What does a rate hike do when those people might be pinched by higher mortgage rates, higher gas, higher grocery prices, and now broad higher rates? Yeah. It's a fair question. In the macroeconomics, we tend to look at aggregates around here. Aggregate GDP, overall labor market trends, the state of inflation. A lot of people in Washington spend a lot of time on distributional consequences, and that's their job and their business. What I was referring to in the least well off, tend to be people that don't own financial assets. Call that a bit less than 50% of the country. They don't have equity in their home. They don't have equity in a 401k plan. They're living off their paycheck that comes every couple of weeks. The thing that we can do consistent with our mandate is two things. Ask ourselves as the country running more or less its full employment, and we've done that. That doesn't mean that individuals aren't searching for a job, but in aggregate, we're running more or less at full employment. If so, we can then look at the other side of our mandate and let that be our focus. In stable prices, an environment where inflation is running consistent with our 2% objective offers good news because that way, when they get their wages, they can put their head above water and deliver real take home pay increases. We don't have total responsibility for it, but we do have responsibility for a stable prices. As I've said before, inflation is a choice. And today, we took a step in delivering it. Yeah, sorry. Now, let me tell you from Agents from SPF, are you looking at the other central banks? And what do you think about the European central banks move? They hike twice this year, but not in a row. Thank you. Well, I don't ask them to prejudge decisions that we're going to make, so I won't prejudge decisions that they make. I will say this. I've spent some time with foreign central bank counterparts not just in the last 20 years, but over the course the last several weeks, as I mentioned in Jackson Hole, at the G20 meeting we hosted in North Carolina and at a central bank meeting in Basel. What I heard around the table from most of the advanced economies is they're suffering from price pressures, too. They're making their own choices consistent with their remit. It tells me a couple of things. One is when the Federal Reserve makes a policy choice, it matters not just to the U.S. economy, but it spills over to the rest of the world. To a lesser extent, that's true for them, too. When foreign central banks make decisions where they're confronted with higher prices and they choose consistent with their remit to raise rates, then they're helping to quash inflation in their countries and their spillovers and spillbacks in both directions. Beyond that, I want to put...