Introduces Jonathan Pingle of UBS who expects 25bp rate cut, few dot plot changes, and no change to median policy assumption.
Host
Jonathan Pingle
Expects communications from Powell about risk assessment, outlook, and bar for future cuts. Market anchored to ~3% year-end target range.
Jonathan Pingle
Historically, dissents are the norm; unanimity is exception. Bets Powell gets fewer than four dissents.
Jonathan Pingle
Expects two cuts next year and says Fed chair selection matters.
Asks about balance sheet expansion/QE and monetization of debt beyond rate cuts.
Host
Jonathan Pingle
Expects Fed to start outright expanding securities holdings in January with reserve management purchase program.
Jonathan Pingle
There is element of debt monetization but skeptical it drives high-frequency equity moves.
Asks if Fed cuts + fiscal stimulus + re-accelerating consumer creates problem for 10-year yields and whether Fed would cap yields.
Host
Jonathan Pingle
Doesn't think it will be much problem for 10-year because forward inflation indicators are going Fed's way.
Jonathan Pingle
Will hear more credible case about supply side, alleviating investor concerns about FOMC running amok.
Asks about labor market view next year.
Host
Jonathan Pingle
Sympathetic to hawk inflation argument but sees labor market problem.
Jonathan Pingle
Powell's risk management framework: little reason to slow labor market when already weakening, and rates can't stop cost-push inflation from tariffs.