What Jerome Powell Just Said (Full Summary)

hey everyone kevin here so we just heard

from jerome powell that we will not be

raising rates and we will not be

tapering at this fomc meeting instead

we're expecting jerome powell to

potentially taper november 4th in fact

jerome powell told us that there is a

unanimous decision that has been made

and that the entire committee

unanimously agrees that we will start

tapering uh that we will end the taper

by the middle of next year that taper

has not begun yet but we expect that to

begin november 4th unless there is some

kind of shocker to the downside shocker

to the downside would have to probably

be a very bad unemployment reporter jobs

report jobs report comes out on october

8th i believe it is i'm going to have to

double check that one i believe it's

october 8th for the jobs report because

it's the second friday of october since

the first friday falls on the first it's

the 8th

and then we've got cpi figures coming

out on october 13th and we don't have

the fed all the way until november 4th

so those two reports are going to

probably be that final kind of nail in

that decision to taper november 4th we

expect the taper to complete within

about seven months by the middle of 2022

that's a faster pace than usual and

initially when we heard no taper yet and

we heard that rates would stay the same

the stock market moved up we saw the s p

500 and crypto move up as soon as jerome

powell said that we would taper by the

middle of 2022

markets pulled back and that's because

previously we've taken about a year to

taper from 120 billion in asset

purchases what we're doing now to zero

whatever was before to zero

now jerome powell and the committee are

talking about doing it as quickly as

seven months so that is actually a

hawkish tone that's suggesting that

there's potentially more upside to

inflationary risks and it's time to

taper now one of the media folks asked a

very astute question she said hey are

you going to raise rates

before you finish tapering and the

reason she asked that question is

because in the summary of economic

projections which came out we actually

had a little bit of a change we had a

shift right here at the bottom you're

going to see the fed funds rate you see

this 0.3 right here above that green i

just drew this 0.3 right here

is a sign that the federal reserve wants

to have interest rates bump at least one

time in 2022 and then the the median

forecast is for two more bumps in 2023

but this begs the question right here

okay jay pow and friends when are you

going to increase rates are you going to

do this first bump from point o

to the range of 0.0 to 0.25 are you

going to bump this to 0.25 to 0.50 at

the beginning of 2022 or at the end of

22.

she had a very very smart question

because when jerome powell responded he

kind of reacted quickly to that and he

reacted quickly to that because he's

like no no basically i'm summarizing

he's like why would we do that that

would be like contradictory you can't

raise rates and taper at the same time

we would have to finish the taper and

then raise rates and by saying this

drone powell signaled to markets that

we're not going to see a rate increase

until the very earliest the second half

of next year unless of course things

change and that's where naturally jerome

powell kind of walked that back a little

bit because he got caught real nicely

so he walked that back a little bit and

of course said hey unless of course

things change uh then then we would uh

modify our actions now jerome powell

talked a bit about uh the the maximum

employment test uh and substantial

further progress he believes that almost

everybody believes that we've met the

substantial further progress test others

say we're close but they're pretty much

all consistently on the same page that

yeah we're pretty much at max further

progress

and we expect to have that again nailed

down by the november 4th meeting

that's when that decision will become

official to taper he says we are on

track to rotating back down to 2

inflation however

he does recognize that we might have to

taper faster or again we are tapering

faster compared to last time because

supply bottlenecks have been larger and

longer lasting than we were expecting

imagine that something was larger and

longer lasting than you expected

all right

then jerome powell went on to say that

households uh won't really notice this

two percent inflation he believes the

inflation expectations are a little bit

high right now but that they're

temporary they're transitory he's kind

of sticking to the transitory argument

but he does agree that yeah look things

have kind of pumped up a little higher

and longer than usual

the liftoff so when you hear the federal

reserve talk about liftoff it's

important to know they're not talking

about a rocket ship they're actually

talking about lifting rates off and

jerome powell does not expect to lift

rates off

until we

we finish the taper so no liftoff until

the taper is complete now something else

that's really interesting is jerome

powell says

has previously said this is a change

okay jerome powell has previously said

hey you know we want to keep the

essentially interest rates low we want

to keep things accommodative so that

everybody can participate in the

recovery specifically black and hispanic

individuals who are more likely to be in

service sector jobs affected by covid

and women also more likely to be in

service sector jobs affected by coven

and lower rates would help accommodate

them better john powell has now

changed this policy well i wouldn't say

he's changed the policy but he's changed

his tune on this and what he's saying

now is hey you know what congress via

fiscal policies and educational policies

would be much better to help black

hispanic individuals and women and that

this might not be a job of the federal

reserve that congress would be a lot

more efficient at handling this he also

mentioned

that we have a uh we do not have a lot

of direct exposure to the ever grand

crisis there was somebody who called it

ever grande which i thought we were

making fun of yesterday on millennial

money when we were calling it ever venti

uh but anyway somebody actually called

it evergrande uh which is fine i get it

i mean there's an e at the end okay like

but anyway so we were making coffee

jokes in the chat but anyway jerome

powell says that uh nobody should assume

that the federal reserve can protect us

from the ever grand situation but he

says it's not a major focus and he does

not see a lot of uh direct exposure i

was actually surprised how few questions

there were about evergrand

uh we've got let's see here liftoff we

talked about this extensive oh crypto

okay yes lots of talk about crypto here

from the fed so uh joan powell called

crypto a currency-like product uh which

is really good because the last thing

people in the crypto community want is

their crypto to be considered a

a security uh because then you get sec

regulation you get you know more more

tax implications john powell called it

currency like uh although he wasn't

directly referring to crypto as possible

he was referring to stable coins so i'm

not sure that we could fully bestow like

that that honor on on crypto yet uh he

does though believe that uh central bank

digital currencies and digital

currencies in general are very important

he says uh they're working on a massive

report on cryptocurrencies uh he says we

also have a new settlement system being

released for instant payments instant

settlements that he says there's a quite

compelling case for this

uh he does say that we probably need

congress's support and we want broad

support from congress and the president

to get a central bank digital currency

in place but he does see digital

currencies as a quote very important

innovation uh but he does make sure to

clarify that it's important to be right

and not to be fast because we are the

world's reserve currency so this is

really good

uh there was uh there was a uh crypto

dip i'm just gonna show you uh the ada

chart here because i do have a yolo i'm

sorry this is the hud hr i have a yolo

on hud 8 right now i also posted on wall

street bets

but uh of course as usual anytime if you

want to see me buy sell or trade uh it's

not for you to copy my trades but if you

want to see it i post alerts in my

stocks and psychology of money group

every day i buy seller trade which uh

sometimes is infrequent sometimes it's

very frequent it kind of just depends on

what the market's doing but anyway i did

uh i'll buy a yolo on this as uh as the

minutes were coming out we did have a

period the time here of negativity and

this negativity was because of that

accelerated face of taper and then of

course we were all saying jerome powell

just get off the stage and stop freaking

talking we did recover though when

jerome powell sounded a little bit more

dovish later and started applauding

cryptocurrencies

okay so folks

thank you thank you so much for watching

this summary check out the courses link

down below the price does go up thanks

to all that inflation it's lasting

longer and larger than expected so price

will be going up a friday evening so

check out the programs linked down below

uh folks use that coupon code

now we will see you next time

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