Introduces Jeff Kilburg, founder and CEO of KKM Financial, to discuss market reaction to Fed decision.
Kelly
Jeff Kilburg
The Fed's announcement was a surprise - more dovish than expected. The $40B/month Treasury bill purchase program starting in days is annualized to half a trillion dollars of new QE, expanding a $6.5T balance sheet.
Agrees the 'QE Lite' headline is driving stocks, not the interest rate decision.
Kelly
Jeff Kilburg
The Fed's urgency (starting Dec 12) raises questions about economic strength. Despite strong profits and economy, the Fed is clearly seeing something concerning, given their poor track record on inflation forecasts.
Acknowledges market interpretation but suggests the Fed might frame it as financial system plumbing to prevent repo market issues like 2019, not as expansionary monetary policy.
Kelly
Jeff Kilburg
The Fed brought out the 'first aid kit' before seeing the wound, suggesting potential future job market deterioration despite current strong economy and doubled Q3 profit expectations.