The Jon Sanchez Show
09/18-The fed interest rate decision and how it will impact you
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This was an interest rate meeting that literally was a 50/50 chance, even though the Fed futures contract was waned and it was correct, weighing towards a half a percent cut, many on the street felt a half a percent was going to be too much. That I could signal that there are lurking problems in the horizon. That a quarter percent would be just a nice baby step. Others said, no, you need a half a percent cut. The Fed is way behind the interest rate cut momentum. They need to step up and do that. Well, obviously, the latter camp was correct and we got a half a percent. But what I'm going to do for you this evening is really go through what this means, again, now to the markets. We did a show on Monday how what a Fed cut means for you. But what about the markets now? Because it was a very, very interesting market reaction. Now, keep in mind, folks, these days, of course, we, the human beings are battling the computers trade by trade, right? The algorithms move this market so absolutely, incredibly fast. I mean, 30, 40, 50, 60 point moves literally in the blink of an eye and that's exactly what happened today. Because you see, when the Fed made the announcement, and I'll read you exactly what they said here in a moment, when they had their 11 o'clock release and they indicated that, yes, the yes, they cut the rates by half a percent. The market shot up, shot up, Dow Jones Industrial Average up almost 400 points. Okay, then it backed down a little bit and then we had to sit back on our hands and wait until Jerome Powell's press conference began at 11 30. So we had a little bit of time to kind of digest what they said in the minutes or in the release. And again, I will share with you what they did have to say. So Jerome Powell gets behind the microphone and he starts talking, just basically reads, you know, what, what the release was. And then the market began to fade away a little bit and then fade away a little bit more and a little bit more. His press conference has normally lasted just about an hour. And to give you a little hindsight on what the chairman did and how he basically, as always, moved the market. When the chairman began speaking at 11 30, like I said, lasted maybe 10 minutes, his prepared text, and then it went into the Q&A session. The Dow was up 92 points, okay? Then he finished the Dow had fallen and we'd actually gone into negative territory a couple of times. So we went from nearly a 400 point gain, again, when the release of the, the Fed decision to when he spoke again up about 1% and then we began to fall and fall quickly. And then he wrapped up his speech in front of the press. Press didn't really have anything real substantial to say. And then the market began to sell off again. And it did that going into the close. And so we went from nearly a 400 point gain when the decision came out to actually finishing down 103 on the Dow, Nasdaq lost 55, the S&P gave up 16. So what did the chairman have to say? What did the interest rate decision have to say in regards to what this market is doing? Well, if you remember, gosh, what's it been now, maybe three or four weeks ago, we had the European central bank, the UCB cut rates for the first time. And the market reaction was very muted the next day. Matter of fact, they drifted down just a little bit. And I said on this show right behind this microphone, I said, you know, we've got to be very careful when we finally get our interest rate cut on September the 18th. Again, not knowing what size it was going to be that our market was going to react the same way. And as we've said over and over again, almost every night on this show, Wall Street is a bunch of spoiled children. It needs something to sink its teeth into, right? This market had it priced in again. It was about a 63% probability of a half percent cut. We knew it was going to be a cut. Just didn't know the exact size. So it got that it got better than what you would think. But then you start to sit back and the camp begins to say, well, wait a minute here, what is the fed seen in the future? You know, as I like to say, what are they seen in the crystal ball that would prompt them for a half a percent cut versus baby steps of a quarter percent? Well, as I'll share with you some of the comments that Chair Powell today, basically, I mean, I'll be real blunt with you. I don't think I've ever seen this guy this optimistic about the economy, the jobs market, the decline in interest rates, on and on and on. I'm like, am I here in the same guy? Because usually, you know, as most fed Sherman are right down the middle, right down the middle, doesn't want to get the market too excited, you know, as far as optimism or too excited as far as pessimism. But he didn't do that today. And if, you know, if memory served me correctly, he's never done that in the past. So those that were saying, oh, the crystal ball may be saying, oh, oh, the fed's cut by a half a percent. There could be some problems lurking in the future. That kind of got thrown out by the wayside. And if you in the press corps, when they, when he did his press conference, tried baiting him to go down that path, like, are you seeing something that we're not seeing? And you know, it was basically the answer is no. So I'm going to go through and analyze for you exactly what happened here. And again, they, you now know the market reaction, which again, somewhat disappointing compared to where we finished. We are seeing the, the future's nudge up just a little bit right now. So you know, who knows what tomorrow is going to bring, of course, but, but in the meantime, you know, all we can focus on of course is what actually happened today. So let's kind of get into again, some of the details. Now, remember that also this was a meeting where it was the, what they call the SCP, which in English terms, this means the dot plot. What does that mean? Well, the summer of economic projections suggest that the committee is in a rush to get more rate cuts done. Okay. That's what Chairman Powell said. His exact quote. There's nothing in the SCP that suggests the committee, excuse me, is nothing to suggest that the committee is in a rush to get something done. So that goes again back to, well, why'd you do a half a percent instead of a quarter percent? He says this process evolves over time. But the reason he said that is because everyone's going, you know, even with a half a percent, you probably didn't cut enough. We need more cuts. And now the street, and in, as I'll share with you in a moment, now the Fed is really kind of projecting another half a percent cut this year. And then about one and a quarter next year, and they actually went out to 2026, which I don't even trust their prediction going out to next year, much less, you know, two years from now. So the Fed funds rate dropped now between four and three quarters to five percent. Remember, the Fed funds rate is the rate that banks charge one another to borrow, okay, overnight. But again, it translates over to the prime rate dropping and so on and so forth. Now here's the next comment from Mr. Powell. The committee has gained greater confidence that inflation is moving sustainably towards two percent and judges that the risk to achieve in its employment and inflation goals are roughly in balance. Now what he meant by that is, remember the Fed's mandate, they want good, solid employment picture and they want inflation to be down to two percent. Well, again, we're at about 2.2, 2.3 on the inflation side. So they got a little bit of ways to go there. But remember these last couple of meetings, he has indicated the Fed's pretty happy with the rate that inflation is coming down. What they haven't been happy with is the labor market. The labor market's been too strong in their opinion. Well, now, again, back to the optimism comment I made, he's now saying, "Look at the Fed's market. We're about equally balanced. Inflation's coming down. Employment's steady. Boom. Everything's good." Now, the Fed did hike their expected employment rate this year to 4.4 percent from the previous projection back in June of 4 percent. So they're looking for the unemployment to move up a little bit. Meanwhile, they did lower their inflation outlook to 2.3 percent from the previous 2.6 percent. And then on core inflation, that's a course where we strip out the food and energy. The committee took down its projection down to 2.6 percent, which is about 2/10 of a percent reduction from, again, when they met back in June. So you look at that and you go, "Okay, we got a half a percent. We're well balanced between employment and inflation. What the heck's the problem?" Well, there's a lot of things that people are still very, very concerned about. And some of those things, of course, are, "Well, maybe this wasn't enough. Maybe this was politically motivated." I told you, and this was a big chatter today, and we've been warning you, he's going to catch a lot of flack. I mean, I'm surprised and maybe it's already been out there. I was tied up in meetings so I couldn't tell. But I don't know if Trump has come out and said, "This is politically motivated or something." I don't know. But I would be shocked if we don't get something from the Republican side saying, "Look, you never do a half a percent, right? You always do a quarter percent." And it just so happens that you decide to do a half a percent right before an election. Because also remember, the Fed does not meet until after the election. And so, again, there's going to be a lot of contention regarding that. Now, this wasn't a unanimous decision among the 19 voters, by the way. There was a dissension. The governor, Michelle Bowman, she called for a quarter percent cut instead. The other thing that was interesting is Fed Chair Powell called the rate reduction a recalibration. And I can't tell you how many times he used that word. I've never heard him say that before, recalibration of the bank's policy. Noting that the Fed will continue to make decisions meeting by meeting, report by report, so on and so forth. All right, we're just getting started on today's surprising half a percent cut. Let's turn it over to Jack Saban. He's got, right now, traffic, Jack. Welcome back to the John Sanchez Show on News Talk 780, KOH. Mr. Gotten has the evening off, as I mentioned earlier. All right, let's hit it again, where we finished after this surprising half a percent interest rate cut. A 103 loss on the Dow, after getting up almost 400 points, 0.26, actually it's just a quarter percent, excuse me, a quarter percent loss, finished at $41,503. As I lost 55 points, 0.31 percent, finishing the day at $17,573, and the S&P lost 16 points or 0.29 percent, closing at $5,618. Well, for those of you that always wonder, well, again, hey, Fed cut rates a half a percent, we should see bond yields come down, mortgage rates come down, well, as we've been trying to educate everybody, it doesn't work that way, folks, the bond market predicted this rate cut a long time ago and has already reacted with rates coming down. And matter of fact, rates rose today. 10-year yield up four basis points finished at 3.69 percent, turning things over to mortgage news daily, just check those rates, the 30-year mortgage nationwide, 6.15 percent up four basis points for the day. As a matter of fact, all of the mortgages, even the 30-year VA, moved pretty substantially up six basis points to finish at 5.72 percent. So you see, bond market already had this predicted. On the oil front, we lost a half a percent, closed at $70.90 a barrel, $6.20 rises on goal, $2,598.60. Now let's start things off by going through what the Fed had to say. So what I like to do when I can is I like to compare what the Fed's statement said for the current meeting in comparison to the previous meeting. Now, it's pretty simple to do because a lot of it is cut and paste, as I like to call it. It's kind of cookie cutter, right? They say basically the same thing, but they tweak a few words. So what I want to do right now for the next five minutes is I want to go through paragraph by paragraph, and again, it's just a one pager, and highlight what has changed in this Fed interest rate decision compared to the last one, which was July the 31st. Okay? So let's start with today. Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have slowed, I'm just going to say a month ago, let me just use the word month ago, which really is July 31st. They said then job gains have moderated, and the unemployment rate has moved up, but remains low. Inflation has made further progress towards the committee's 2% objective, but remains somewhat elevated. Month ago, they said, again, job gains have moderated and the unemployment rate has moved up, but remains low inflation has eased. So now they change that to moderated inflation has eased over the past year, but remains somewhat elevated. In recent months, there has been some further progress towards the committee's 2% inflation objective. Okay, so fairly close there on to the next paragraph today, the committee seeks to achieve maximum employment and the inflation at the rate of 2% over the longer run. The committee has gained greater confidence. This is new. The committee has gained greater confidence that inflation is moving sustainably towards 2% and judges that the risk to achieving its employment and inflation goals are roughly imbalanced. The economic outlook is uncertain and the committee is attended to the risk to both sides of its dual mandate. Now, previously, they said the committee seeks to achieve maximum employment and inflation at the rate of 2%, blah, blah, blah. The committee judges that the risk to achieving its employment and inflation goals continue to move into better balance. The economic outlook is uncertain and the committee is attended to the risk on both sides of its dual mandate. So that part didn't change. Okay. Next paragraph. Today, in light of the progress on inflation and the balance of risks, the committee has decided to lower the target range for the Fed funds rate by 1/2% to 4 3/4% to 5%. In considering additional adjustments to the target range for the Fed funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, that's what we call the Fed's balance sheet. The committee is strongly committed to supporting maximum employment and returning inflation to its 2% objective. Now previously, a month ago, they said in support of its goals, the committee has decided to maintain the target range between 5 1/4 to 5 1/2 and considering any adjustments, the target range for the Fed funds rate, the committee will certainly assess incoming data, the evolving outlook, and the balance of risks. The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2% on and on and on the rest of its the same. So you see how things a little bit more optimistic this time around. Two more paragraphs to go. Currently, in assessing the appropriate stance of monetary policy, the committee, and these are identical by the way, in assessing the appropriate stance of monetary policy, the committee will continue to monitor the implications of incoming information for the economic outlook. The committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee's goals. The committee's assessment will take into account a wide range of information, including ratings on labor market conditions, inflation pressures, and inflation expectations, and financial and international developments. Again, things that were different. In the final paragraph, this is where they tell you who voted in agreement or in dissension. Again, last meeting to leave everything changed. No, everybody voted for that. But this one, again, we had one dissenter there. And so, not significantly, but again, very much more of an optimistic tone than what we have seen, both from the Fed as well as from the Chairman himself. Now, what does this really mean for the stock market going forward? And this is, again, what's going to be interesting. But let me remind everyone, we have not had a rate cut since 2020. Okay? Since 2020. Think about that. Nearly four years, if you want to be real exact, nearly four years it has been since we had that. So once again, I think it's important that everybody understand why the Fed did this. Okay? So once again, if you look at where the bond yields are specifically, you know, the two year yield, which right now we're trading at a yield of 3.62%. So if you take that 3.62% and you look at, again, where we are now on the Fed funds rate, four and three quarters to five, they still have a way to go. Those numbers, those two, the two year yield and the Fed funds rate, should be relatively close. They're not going to be identical, but relatively close. So there's still a big gap and let's just use four and three quarters. So four and three quarters versus 3.62. So let's round it up. We're still, you know, basically just a little over 1% away. And this is folks how the traders now are saying we still have 1% to go by the end of this year. See, you see how the math works out, four and three quarters, Fed funds rate, 3.62, two year treasury, again, roughly 1%. And that's why the, the, the, the street is sitting there going, all right, we still think that there's going to be a half a percent coming or 1% excuse me coming with these final two meetings. And again, we only have two more meetings left for this year, if you can believe that. So what does this really mean for the stock market? Well, let's tackle that when we come back. But first, let's turn it over to Greg Neff. He's got news, traffic and whether, hey, Greg, welcome back to the John Sanchez show on his talk. 780K, which Mr. God has the evening slash afternoon off for almost an evening time now. And we got our half a percent cut. We're analyzing what this means for the market. Why the Fed do what they do? Why did they do what they did, I guess? Really the whole situation. If it's, you know, again, I'll be honest with you, it is, if you're feeling a little bit confused, you're not alone. It is a bit of confusion situation. And I'm trying to debunk some of these myths that some of you may be thinking. And again, the way the market reacted, once again, we shot up almost 400 points at our best level right after the news came out and then things began to back down. And once again, we finished a negative territory, a territory down 103 on the Dow, quarter percent loss, NASDAQ loss 55, and the S&P gave up 16. So kind of the next question that we need to ask is, okay, so what does this really mean for the stock market? Well, I shared with you some stats. I believe it was Monday evening. So if you missed it, pick up our podcast and you can hear it in great detail. But historically, when we get a half a percent cut from the Fed in a non-recessionary type of environment, you are going to see the market move up very strongly over the next 6, 12, 18 months. And so I think that needs to be something that everybody needs to bear in mind and figure out, okay, what does this really mean? So let's kind of go back to history and say, well, this wasn't a recessionary fear at this point, meaning the Fed didn't cut rates at half a percent more than most people expected. I know the Fed futures contract was showing more, but they did it because again, they're kind of behind the curve and they feel that inflation is coming down, employment is solid. Once again, as I said, they've got this risk that is balanced. And so what I think you need to be thinking about at this point is really now that the news is out, we're going to go back to basics, meaning we're going to be trading off of economic data, just like the Fed does. They don't trade, but they look at incoming data. We're going to go back to focusing on that. We're still ways away from the earnings season beginning. So we're going to kind of get stuck in a vacuum. So here's kind of the negative right now. Now that this big event is over, we're going to be stuck in a vacuum and the market's going to be trying to, as I like to use the term sink, it's teeth into something, right? It's going to need something to be excited about back to my analogy. We all were this way. At least I was as a kid Christmas morning is over. You've opened all the presents. Now what? Right? You kind of get depressed. Investors do the same thing. They go, wait a minute. We've been waiting for months really since that July 31 meeting waiting for months for this big day. It's now coming gone. Christmas has now come and gone for investors. So what are they going to do? Once again, we don't have any real precedents to go off of because it has been a long time since the Fed has cut rates at half a percent in a non-recessionary type of environment. So what I think is going to happen is I think we've got a couple of scenarios. Number one, we can kind of just drift until we start to get some really strong economic data or some things again to get excited about. So that's one scenario. The other scenario is investors can go, well, you know what? The Fed's behind us. We know they're going to be on our side. I've lived through this many times. Fed's on our side. The Fed's no longer the enemy as many felt they were with these first initial rate increases and then sitting steady for the last four years and not doing anything. The Fed's our friend now. They're not our enemy. So therefore, what are we waiting for kids? Let's jump on the bus. Let's get this money invested. Let's get moving into the stock market. That's the other side of it. I think that's what will happen. I think these next couple of days will tend to be a little bit on the choppy side. And again, we're seeing the futures move up nicely, Dow futures right now, up 83, and NASDAQ futures are up 88, S&P's are up 17, Russell's are up 23 points. So yeah, it's still early in the day and the night. But I think that's typically what we could see happen. Just kind of chug along, no real major gains, no real major losses. But the trend over the long term, meaning over the next 12 months, should absolutely be on the upside. At least that's what historical data has shown. Now again, the big unknown, our next major event is, yeah, it's going to be the Fed meeting after the election, but the election is going to be the next major event. And so of course, we're going to go through earnings season. We'll see how that pans out. But we're kind of in a vacuum, like I hate to keep using that term, but we don't really have a lot of things to look forward to unless, unless, unless investors say, hey, you know what, again, the Fed is on our side and therefore, you know, let's get this money put to work. So we find ourselves again, kind of in a interesting scenario at this point, trying to figure out what's going to be the next move. Historically, of course, in a declining interest rate environment, you start to see investors clamor towards investments that pay high dividends. So high dividend yielding stocks, utilities by nature, so on and so forth. You also start to see the small caps do very well, right? These are those young companies we talk about all the time that they're young and up and coming. And again, they typically don't do good in a rising interest rate environment. They typically do well in a declining interest rate environment because they got to go out and borrow money. Well, guess what? Money's a hell of a lot cheaper today than it was, you know, yesterday. And so will that spark a new round of money as far as borrowing? Will it spark a new round of, you know, companies going to the bond market and borrowing money? Yeah, so on and so forth. It should. It really should. So like I said, overall, this is very much of a positive. Now of course, what I care about is you. What does this mean to you? Well, as we've covered again, many shows on this area, you will start to see credit cards come down because of those are, those are based upon prime, some auto loans coming down. And we will see, you know, again, what's I'd say probably the hardest thing to predict right now, the mortgage rates, right? It's all going to be based upon what the bond market is now going to begin focusing on. So if the bond traders start bringing down these yields even further, then I care you will start to see the reaction in a positive sense in the, in the mortgage side of things. But, but, you know, again, the bond market is the controlling folks for folks. It is not the Fed, right? The Fed, again, just what they did by cutting a half a percent. That is just the rates that banks charge one another on an overnight basis. So going forward, I think this is a great time. This is absolutely a great time for you to sit back. And if you have an advisor, sit back with your advisor and say, okay, are we positioned in our portfolio to take advantage of a declining interest rate environment, right? The world has changed as of, you know, 11 o'clock this morning. It's no longer worrying about how, how much longer it's going to be. It's here. We got a half a percent cut. It's here. So are you well positioned to take advantage of a declining interest rate environment? Like I said, at the beginning of the show, if you missed it, you know, the street is really pegging anywhere between, depending upon whose prediction you look at, three quarters of a percent to another full percent cuts by the end of this year. So you've got to, you've got to, again, begin to adjust things, you know, to those areas that I was talking about. But overall, you may just find that the stock market is very healthy. Again, historically, it does very, very well over the next six to 12 months, once interest rates start coming down. So you know, we did hit an intraday all time high on the S&P and the Dow Jones Industrial Average. Obviously we didn't close there, but this market has the potential to get back to those record levels. It really does now that the Fed meeting is behind us. As far as you savers are concerned, as we've been warning, you know, hopefully you took our advice. And if you have some money in CDs that we're going to be coming to soon, we told you go out and renew those CDs because you're going to start to see the CD rates coming down. And I'm sure they've probably already happened today. I'm trying to bring it up right now according to the bank rate. Let's see if we can get a quick picture here and see what it's looking like. Let's see here, five and a quarter, but a 10,000 minimum. Let's see. Yeah, you know what? It's funny. Yeah. There's a one year. Five point one. That's not bad. That's pretty much where it was. So they haven't reacted yet. So it looks like you may have a little bit more time. Once again, if you want to try to compare our local financial institutions to what's going on nationwide, just go to bankrate.com and you can click on the best CD rates as they call it. And this will scour the country for mainly a lot of these are, you know, online credit unions and banks and so on and so forth. So that's encouraging. Yeah. It looks like they haven't really adjusted the rates yet, but they will. They absolutely will. So keep in mind you're going to be hearing a little bit less. So again, you may want to flavor the portfolio a little bit. Like I said, with dividend, high dividend yielding investments, whether it's a blue chip stock and ETF, a mutual fund, whatever fits your fancy, you know, those are holding it pretty well. For those of you that own bonds, hey, this is, you know, this is Christmas come early speaking of Christmas, right? Bond yields coming down and you're going to see the bond prices go up. They already have been doing that. So this is a good time to be watching those bond positions very closely. Probably got a nice runway for the next three to six months ahead of you to pick up a little bit of appreciation in your principal value of your bonds. Again, whether it's an individual bond, obviously an ETF, a mutual fund, et cetera. So good interest rate environment for bond holders. All right. We'll continue our discussion when we come back. Let's wrap it up with Jack Saban in the right now, traffic center check. Welcome back to the John Sanchez Show on Newstocks 780 KOH, once again a 103 decline on the Dow. Then as I give up 55 S&P lower by 16, half a percent cut from the Fed. I want to wrap up the show by going through a few comments that Chairman May just once again kind of give you an idea of what he was saying at the press conference and so on and so forth. And I think one that is really important is the following. This was in regards to the economy. Like I said at the beginning of the show, I've never seen Chairman Powell so optimistic about the economy, right? He's again, always kind of right down the middle. But he said the following, he said the US economy is in good shape. It's growing at a solid pace. Inflation is coming down. Okay. Now, normally you wouldn't think much about that unless you were me or anybody that follows the market closely and follows the Chairman closely because he usually does not say things like that. So back to, was this politically motivated half a percent cut before the election? And no more meetings before the election? Maybe so. I'm sure you're going to get me coming out saying that tomorrow. Again, the economy is in good shape. It's growing at a solid pace. Inflation is coming down. All right. So there's one thing to be thinking about. Let's go to some of the Chairman's other comments. Now, remember, as I said, this is the first cut in four years. Normally we don't get a half a percent cut except it was during COVID and then in '08 when the whole great recession was occurring. All right. Here's the next comment that he made. He says this decision meaning the half a percent cut reflects our growing confidence that with an appropriate recalibration of our policy stance, strengthen the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2%. He says he does not see the risk of an economic downturn being elevated following the supersized cut. I don't see anything in the economy right now that suggests that the likelihood of a recession sorry of a downturn is elevated. Think about that again. I'm going to read this to you. I don't see anything in the economy right now that suggests that the likelihood of a recession sorry of a downturn is elevated. So there's for those out there the pundits that think again the Fed did a half a percent because they see a recession coming. No, he's saying no. He says, I don't see that. You see growth at a solid rate. You see inflation coming down. You see a labor market that's at very solid levels. So I don't really see that now. I give folks this is not something that normally comes out of Jerome Powell's mouth. So once again either there's some type of hidden agenda to an aggressive half a percent cut or he really has just turned the page in his personality and has become Mr. Optimistic. Now he did caution and I want to keep this real clear with everybody. He did caution that investors should not assume that a half a point move sets the pace for the policy makers going forward. Quote, I do not think that anyone should look at this and say, oh, this is the new pace mean and a half percent. As I said earlier, Fed's always going to be data dependent. He also made it clear that he believes the Fed can reduce the balance sheet again that process that we all used to talk about called QE and QT quantitative tightening and lower the rates at the same time. Now remember that's where the Fed has on their balance sheet, the mortgage backed securities, et cetera. And they're not taking the money when those bonds come due and going back out to keep rates artificially low. They don't need to do it. They're going to keep letting them mature and I guess give the money back to the government. But he said the following on that topic, he says, we're not thinking about stopping the runoff because of this, he said, meaning a half a percent cut. We know that these two things can happen side by side in the sense they're both the form of normalization. Again, very, very optimistic comment there. Oh, for those of you that think you're going to go back to a two percent, two and a half percent mortgage rate, and Mr. Powell, they want you to realize that's not the case. He says he does not expect the era of cheap money to return. Quote, intuitively, most many, many people anyway would say we are probably not going back to that era where there were trillions of dollars of sovereign bonds trading at negative rates, long-term bonds trading at negative rates, he said. My own sense is that we are not going back to that. He feels the neutral rate is likely significantly higher than it was back then, although he does not know how high it is. Again, restoring price stability, keeping employment in check, we covered that. Let's see, anything else? He says we're trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with disinflation. Ooh, disinflation, that's a new term that he hasn't used in a while. And again, overall, he says the labor market is in solid condition, and the federal reserve's intention is to keep it that way, the U.S. economy is in good shape, it's growing at a solid pace, inflation is coming down, but Mr. Powell is sitting back and enjoying his favorite beverage this evening, putting his feet up on his desk at home or on his coffee table saying I did it, I pulled it off, half percent, but again, it's all going to come down to what the overall market reaction is. Too soon to tell, but I think I'm going to be optimistic as I always am, and I think over time this is going to be very beneficial for the overall economy and, of course, for the stock market. All right, you are now fed, fed, get that, fed, fed, federal reserve fed. You know what's going on? Better than anybody else out there. I wish all of you a great evening, we'll do it again tomorrow night, get a good takeaway from the boys on the inflation, or sitting on the real estate side of things tomorrow night with Corey DeWite. God bless you for a good evening. This program was sponsored by Sanchez Wealth Management. The material in this program was intended as general information only, and should not be taken as specific investment tax or legal advice. None of the information on this broadcast was intended to be a solicitation for the purchase or sale of any security. Further information is available by contacting john@sansheswealthmanagement.com or 775-800-1801. John Sanchez offers securities and advisory services through Independent Financial Group LLC, a registered broker, dealer and investment advisor, member FINRA SIPC. Securities offered only in states John Sanchez is registered in. Sanchez Wealth Management LLC and Independent Financial Group LLC are unaffiliated entities. 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