40 billion in mortgagebacked securities. They say the path of the economy will be connected to the path of the virus in the statement. One interesting note at the end. Mary dailey, head of San Francisco reserve president mad to cast her vote as alternate. Minneapolis president Neal Kashkari is on paternity leave. He was into the at the meeting. The birth of their second child happened this week. We think, we believe this is the first time a Voting Member missed a vote because of paternity leave. Back to you, charles. Charles that is an interesting tidbit a lot to go through here. Meantime, folks it is another monster session in the market which yesterday had the best ever postelection session. There should be no question that the worry of a blue wave was the main reason for selling last week. But now the question, have investors moved from abject fear to unbridled optimism a little too fast . Moreover with megagrowth leading the way again, what is the best place to be positioned for the next leg higher . How important will jay powell be . I think he needs to break out the pompoms later today. Keith fitzgerald, quill intelligence, Danielle Dimartino booth, rosecliff ventures founder mike murphy. Keith, let me start with you. Everyone is saying divided government is the best way. Of course the long term track record is good, doesnt always work out that way per se. Should investor be this excited from what weve seen the last 48 hours . That depends very much, charles if theyre focused on the right stocks. If the stocks dont depend on the virus, dont depend on the fed, dont depend on the white house, go for it. Charles what do you mean about stocks that dont depend on the virus and the fed . There are certain stocks, like apple, microsoft, palantir, executives who know exactly what they are doing they can grow despite it all. Despite who wins. Despite the virus. Despite the fed. Those are kind of stocks that attract me, changing our world going forward. A decade from now they are the ones you want to kick yourself if you dont own. Charles okay. I got you. Mike, listen, you were bullish when everybody else was heading for the exits. I want to sort of ask you a different question about the composition of this rally. What do you make of it . Because yesterday there were more losers on the s p 500 than there were winners. So feels like it is not broadening out. How important is it that we eventually broaden out this rally . Charles, great to see you. I agree with you, that it could and should be a more broadbased rally but i feel like trying to poke holes here in what is really a great rally an an overdue rally. We sold off into this and now we need more companies to be involved, yes. But remember this whole time the market has been climbing the last few years, a lot of people have said it is too much tech. It is big tech. It is five companies. I would say real simple, stay invested in those names. So we do need a broadbased rally historically but companies that are working, charles, stick with them because they continue to innovate and they continue to work. So if it aint broken, dont fix it. Charles i hear you. I will point out that over the last three months industrials, Consumer Discretionary and tears have outperformed tech an materials by far the best performer today. I want to bring in from bull tick capital markets, their chief strategist, katheryne rooney vera. Youve been talking about barbell approach. As the market begins to take off, is that the way to go . This was a sigh of relief for the market. No big public option. No green new deal, no tax hike on public corporations. This is the pe ratio, realizing earnings are important around going to be to be strong, rather than take a big cut in earnings due to an increase in the Corporate Tax rate. So division of power at means we do not get an aggressive antimarket policy becoming, becoming law. Charles right. Make your portfolio more aggressive . Yes. Charles do you make your portfolio more aggressive . Yes. Fiscal stimulus is coming. It will not be 3 to 5 trillion. It will be 1 1 2. Monetary policy backing is going to continue. So i think we need to be overweight equities. We need to go offshore, outside of the u. S. , keep chose to maximizing value here. I think we can find better returns offshore. Charles if it is 1. 5. Someone predicted it a long time ago. I forgot who it was. Keith, i want to pick up with the conversation i was just having with mike. It was exactly 20 years ago maybe, webvans went public. Ipo. 15 bucks. First day hit 34. Almost nine billion dollar valuation. Within a couple years the company was bankrupt. Is that a cautionary tale norfolks who want to ride the wave with the big tech megacap . I know they play a big role in your portfolio as well, or is there a big difference this time around . I think it us very different because webvan is a fourletter word i cant say on television and we didnt understand the parameters of that. The market is different. They understand real earnings, real profits and real growth. If youre concentrated on tech, youre concentrated changing our world and concentrated on product west have to have that makes it different today. Extraordinarily different from webvan came out years ago. Charles talk about earning some more. The sigh of relief rally allowing investors to go back a week or two to properly respond to the earnings. 460 s p names have reported. Get this 86 beat on earnings and mike i want thoughts on earnings season. They come in strong. Revenues are strong. I think were trying to justify the rally even if youre concerned about this market getting over its skis. These earnings feel like they justify it. I will complete completely agree, charles. We got hit by the pandemic. We didnt know how bad it would get. Credit President Trump and administration they were able to get the country back on track. The country reporting earnings, theyre not good. Theyre great. Looks to be guidance is even better than next year. This supports the market not only where it is. It support as much higher market. I know, charles, you like a good breakout. If you look tonight, you will hear from uber. Uber has inbeen able to get above the 42dollar level in a very long time. I think that is great we owned it a long time, uber. Almost since they became public. Charles right. This one i think will continue to move. So im very anxious to hear what uber says but im long and i think there is a lot of upside there. Charles they just had a huge election victory. We have less than a minute, if i go around the horn. Your thoughts what jay powell pay say . We know they will not raise rates. They already telegraphed that. If he does not give us specifics, negative rates, curbing yields, whatever he has to do, he has to come strong or i think well give up a lot of this rally. Kathryn, your thoughts . I think if the 10year treasury continues to move higher towards 1 the fed will Start Talking about yield curve control again. Steepening yield curve goes against everything the fed worked in their minds so hard to achieve over the past decade. I do expect that to be in the offing in the near term. I do feel like the barbell strategy, charles, i will alert to everyone, we are facing, another second bought of the virus. I think the market is going to focus, yes on earnings but also on the possibility that a biden adminstration will talk about idea of further lockdowns. Not on a national level. Something worthying about and internalizing. Keeping those defensive positions in our portfolio. Charles yeah. Heres the thing though, right now reopening trades are beating the covid trades. Gol, the Brazilian Airline up 10 , ual up 5 , delta up 5 . Peloton is up 3 . Zoom is up about 1 . Market doesnt agree with you. I dont think the biden has the mandate to do that were out of time. You guys are fantastic. Kathryn, keith, mike. Thank you very much. Well watch uber for sure. Ballot counting in very key states. The Trump Campaign filing lawsuits in nevada scoring a legal victory in pennsylvania but running into trouble there as well. Trump senior Legal Advisor jenna ellis will shake it out for us because a lot is going on. Stocks are in rally mode. But will they stay this way when jay powell opens his mouth . The stakes are enormous. Stay with us and find out. Charles breaking today, the Trump Campaign filing a lawsuit in nevada claiming that the state is counting thousands of ballots of people who no longer reside there. The campaign also filing suits in pennsylvania, michigan and georgia. Theyre calling for a recount in wisconsin. For the latest on all the lawsuits, im joined by senior Legal Advisor for the Trump Campaign, jenna ellis. Lets start with pennsylvania. An appellate judge issued an order today allows you guys to observe ballots being counted in philadelphia from six feet away but apparently some folks are still, still denying your team access. What is going on there . Yeah. So we had a very significant win in pennsylvania today because the law allows meaningful access for transparency reasons. No one should want these ballots to be counted in secret. Yet were seeing video, my friend ron coleman, others who is lawyer, he is there on the ground, posting videos of team trump not being able to have that meaningful access in certain counties. So of course we are going to still fight for this. This is all about Election Integrity, charles. The president just issued a statement said if you count every legal ballot i easily win the election if. You count illegal and late ballots they can steal the election from us. That is exactly it. It is all about Election Integrity. Charles well a Michigan Court of appeals judge just ruled against the Trump Campaign. There was a question to stop the ballot counting in that state. So the counts go on. I think the real argument, from the Trump Campaign is that in a lot of these things happened three, 4 00 in the morning. There are major shifts. The feeling in the campaign i guess is that something doesnt feel right about that . Yeah. Well again, transparency is always the question here and always the goal and when these kinds of things are happening and you have, magical ballots showing up and suddenly everyone goes to bed thinking this is the trend. Suddenly wake up in the morning there is a significant shift. Were being denied access to seeing the ballot counts, this is all about transparency, just making sure that every legal vote counts. Free and Fair Elections matter in this country, upholding the rule of law. If the election is able to be stolen based on fraudulent ballots we had, we had instances of people reporting that their cat and their dog received a ballot or dead people voting or nonresidents. If those ballots are able to be counted the American People will never have confidence in the legitimacy of elections. We the people get to select and prefer our leaders in our constitutional republic. It is not up to one party simply push through fraud. That is what joe biden and the democrats are trying to do. Charles well that is the, of course the counterargument this is the process. It is bogged down more than normal because of the massive amounts of mail that is coming in and you know, how long it takes to delay it. I know it is frustrating. You see a state like california, north carolina, rather, what is happening there, or nevada what is happening there, but what about georgia . Because that, that seems to change almost daytoday. Of course each time that raise gets closer and closer . Were, let us watch. Be transparent. What is going on in georgia is really significantly questionable when you have 4,000 ballots that show up at 100 of them going to joe biden. That is really, really suspicious. And so again we just want to make sure that Election Integrity is preserved and that every legal, legitimate vote counts. We make sure there is no fraud going on. The American People deserve to have legitimacy in our elections and this matters, not just to the outcome of this election but for every future american election. And so we are a nation of rules. Charles right. The u. S. Constitution under the law. We have to make sure that the process is followed, and that the law prevails. Charles i have to move on, jenna, if you can quickly, maybe you cant tell me, is the campaign prepared to take any of these issues all the way to the Supreme Court . We will keep open every legal option and everything is on the table. We will continue to fight hard for Election Integrity. Charles okay. Jenna ellis, thank you very much. Meanwhile, folks, the fox news decision desk calling the state of arizona for joe biden. The Trump Campaign remains confident they will win the state. The governor of arizona calling for patience so every vote must be counted before declaring a winner. Im joined by the former chairman of the Arizona Republican party, robert graham. A lot of buzz on social media overnight, maricopa county, large tranches of votes were discovered. Apparently things are tightening up. Where are they now . They are. Were 69,000 votes behind biden. 500,000 votes are still being counted right now. In three outlying counties were still bringing in, typically very gopcentered counties. Maricopa county is kind of a 50 50. Were very optimistic. Everything is now trending towards trump is what we expected would happen going into the voting day, tuesday the 3rd. Now again, big surprise, all these ballots show up, it blasted the balance off. It doesnt make a lot of sense. Now were seeing as these ballots are being counted were seeing theyre all leaning toward trump, many of them are. The balance is tightening very quickly. Charles right. The Trump Campaign has been pretty confident for the last 48 hours about the fact this race would be tighter than a lot of people thought. Is it because of these counties . Why have you been so convinced . Why does it seem to be changing at the rate it is . Well were confident because were on the ground, right . When youre on the ground, you get an idea of the culture, what is happening with the momentum. We had remarkable momentum for trump. Same day voting was three to one most of the day. I think it slowed down to two to one. That is where the confidence comes from. In mailin ballots we caught up with democrats going into the day of the election. A lot of this doesnt make a whole lot of sense. 500,000 votes hanging out there. Hila county, maricopa, were seeing a trend again. It is tightening. With the amounted of votes we have outstanding the way it is trending right now, likely the gap will close pretty rapidly as they report this evening. Theyre planning on reporting again this evening. Charles this evening. Good. We wont probably have and all of those votes, this will be update this afternoon. Robert i know you have done the math. What percentage of these votes that are outstanding would the Trump Campaign have to win to win the state of arizona . Theyre saying, some people are calling 57 . I would say it is more like 70 because again, you have got to look at catching up and then going out and leading. So i would say it has to be upward of 65 to 70 in order for him to pull it off which we think is very doable were thinking. The last batch was 67 in favor of trump f that trend continues. There is high likelihood he will make it happen. Charles robert, thank you so much. We appreciate the update. Well talk to you real soon. Well monitor ballot counting in all the key states that will eventually decide who the next president is. Meantime the stock market is on fire. Too many parts of the economy are still in desperate shape. In moments jay powell will explain how the fed will provide more help. Stay with us to find out. Also why the fed is in a very awkward position to find new ways to, find new accommodative tricks if you will . Well be right back. Its still warm. Thanks, alice says hi. For some of us, our daily journey is a short one. Save 50 when you pay per mile with allstate. Pay less, when you drive less. Youve never been in better hands. Allstate. Click or call for a quote today. I was blessed to be part of building one of the greatest game shows in history. During that time, we handed out millions of dollars to thousands of contestants. I thought, what if we paid the contestants their winnings in gold instead of cash and prizes. Back in 1976, we had a wonderful contestant named lee, whose 3day winnings were valued at 12,850. And you know what . That was a pretty big haul back in 1976. So i wonder what would have happened, if lee had put 12,850 in cash and then put 12,850 in gold in a safe . Just sitting there sidebyside from 1976 until now. Well, i went back and ran the numbers and what i found was amazing. We all know that 12,850 in cash would still be sitting there, but it would be worth a whole lot less than it was in 1976. But that 12,850 in gold, safely stored away, its worth 135,000 as of the taping of this commercial. Now thats more than 10 times the original amount. [narrator] if youve bought gold in the past, or would like to learn more about why physical gold should be an important part of your portfolio, pick up the phone and call to receive the complete guide to buying gold. Which well provide you important, never seen before facts and information you should know about making gold, silver, and platinum purchases for faster wealth protection, request a digital version of our complete information kit, which will be emailed for faster delivery. You can also receive a copy of our new us gold report for 2020. Inside, youll find the top 25 reasons why you need to start owning gold today. With nearly two decades in business, over a billion dollars in transactions, and more than a half a million clients worldwide, us money reserve is one of the most dependable gold distributors in america. Charles the current cover of barrons says Jerome Powell is the winner no matter the election results. Of course it has been longheld that the chairman of the Federal Reserve is arguably the most powerful person on the planet but even more so since they really real cranked up that Printing Press to get trillions in the economy. With all that power comes responsibility the question is whom . Wall street wants more and savers may also want to. But we know savers get hurt when thed if does this. There is the social justice warriors. They want to take over the fed so they can use that power to affect societal changes. I think all of those interests may be aligned today. This is why the fed really has to be clear on how it is going to provide more liquidity. Can jay powell do that . I want to bring in former dallas fed advisor Danielle Dimartino booth. Danielle, two of the last three fed reports, last time they put out economic, updated their economic outlook, the market soared into jay poll comments. Not just that session, a week to 10 days. He says theyre going to be accommodative but he is not saying how . Does he have to tell us how today . He doesnt. He certainly doesnt today. I think the winner is, it is the stock market today. He used words as tremendous. The core rohn i cant crisis is causing a tremendous hardship. He says the economy is not doing as well as it was a few months ago. Service sector five moment low with data. This is code word for saying in december, hint, hint, nod, nod, obviously if he is the winner, he is also santa claus because all americans are not winners from fed policy. Charles right. Come that december meeting, i will be willing to crank the Printing Press up even more. That is the message that markets are interpreting right now, charles. Charles i think you speak fed speak better than the rest of us, okay . [laughter]. You get the nuances better than wall street. Well know in about 15 minutes. It feels like he has kind of done this. The nuances they make. Changes between the active recovery and ticked up, you know, those kind, that kind of language i guess it means something and youre right but well see about that. In the meantime we started to the session off with the bank of england providing even more accommodation. Sort of coordinated it right . The uk government also extending their Unemployment Benefits so we know jay powell wants our government to do something similar. It is probably not going to happen to the degree he was hoping for. How much more pressure does this put on the fed to put it in overdrive . Well, this puts tremendous pressure on the fed to put it in overdrive. Depending on the the outcome ofe election the fed has facilities that expire december 31st. Jay powell very much wants those facilities extended into the new year. That comes down between a negotiation between himself and steve mnuchin. Jay powell is looking for more dry powder. More treasury issuance. At the very least Senate Majority leader Mitch Mcconnell promised to do lame duck spending. He promise promised to accommodate any fiscal stimulus. Charles although it wont be 1. 8 trillion, right . Mitch mcconnell is 500 billiondollar camp. That is exactly right. That is what is frustrating powell. It frustrates him to look across the pond to see his counterpart at the bank of england be able to coordinate things so closely with the fiscal authorities. That was not how the fed was designed. The fed was designed to be independent and apolitical that was designed by americans to be an american institution. Charles lets go to the man of the hour right now, chairman of the Federal Reserve, Jerome Powell. We are strongly committed to achieving the Monetary Policy goals congress has given us, maximum employment and price stability. Since the beginning of the pandemic we have taken forceful actions to provide relief and stability to insure that the recovery will be as strong as possible and to limit lasting damage to the economy. Today my colleagues on the federal open Market Committee and i reaffirmed our commitment to support the economy in this challenging time. Economic activity has continued to recover from its depressed Second Quarter level. The reopening of the economy led to a rapid rebound in activity. Real gdp rose at an annual rate of 33 in the third quarter. In recent months however, the pace of improvement has moderated. Household spending on goods, especially durable goods has been strong and has moved above its prepandemic level. In contrast, spending on services remains low. Largely due to ongoing weakness in sectors that typically require people to gather closely, including travel and hospitality. The overall rebound in Household Spending owes in part to federal stimulus payments and expanded Unemployment Benefits which provided essential support to many families and individuals. The housing sector has fully recovered from the downturn, supported in part by low mortgage Interest Rates. Business investment has also picked up. Even so Overall Economic activity remains well below its level before the pandemic and the path ahead remains highly uncertain. In the labor market roughly half of the 22 million jobs that were lost in march and april have been regained as many people were able to return to work. As with Overall Economic activity, the pace of improvement in the labor market has moderated. The Unemployment Rate declined over the past five months but remained elevated at 7. 9 as of september. Although we wealth come this progress we will not lose sight of the millions of americans who remain out of work. The economic downturn has not fallen equally on all americans and those least able to shoulder the burden have been hardest hit. In particular the high level of joblessness has been especially severe for lower wage workers in the Services Sector, for women, africanamericans and hispanics. The economic dislocation has upended many lives and created great uncertainty about the future. The pandemic has also left a significant imprint on inflation. Following large declines in the spring Consumer Prices picked up over the summer in part reflecting a rise in durable goods prices. However for those sectors that have been most affected by the pandemic, prices remain particularly soft. Overall on a 12 month basis inflation remains below our 2 longer run objective. As we have emphasizeed throughout the pandemic, the economy is extraordinarily uncertain and will depend in large part on efforts to keep the virus in check. The recent rise in new covid19 cases both here in the United States and abroad is particularly concerning. All of us have a role to play in our nations response to the pandemic. Following the advice of Public Health profession keep social distances an wear masks in public will help the economy get back in full strength. A full economic recovery is unlikely until people are confident it is safe to reengage in a broad range of activities. The Federal Reserves response to this crisis has been guided by our mandate to promote maximum employment and stable prices for the American People. Along with the responsibility to promote the stability of the financial system. As noted in our statement on longer run goals and Monetary Policy strategy, we view maximum employment as a broadbased and inclusive goal. Our ability to achieve maximum employment in the years ahead depends importantly on having longer term Inflation Expectations wellanchored at 2 . As we said yesterday, with inflation running consistently below 2 , well keep inflation modded rattily above 2 at some time, so that inflation averages 2 over time and longer term Inflation Expectations remain wellanchored at 2 . We expect to maintain an accommodative stance of Monetary Policy until these employment and inflation outcomes are achieved. With regard to Interest Rates, we continue to expect it will be appropriate to maintain the current zero to one quarter target range for the federal funds rate until labor Market Conditions reach levels consistent with the committees expectations of maximum employment and inflation has risen to 2 , on track to modestly exceed 2 for some time. In addition over coming months well increase holdings of treasury securities an agency mortgagebacked securities at least at the current pace. These asset purchases are intended to sustain smooth market functioning and help foster accommodative financial conditions. Thereby supporting the flow of credit to households and businesses. At this meeting my colleagues and i discussed our asset purchases and the role they are playing in supporting the recovery. At the current pace our holdings of securities are rising at a substantial rate of 120 billion per month. 80 bill dollars per month of treasurys and 40 billion of agency mbs. We believe with these purchases along with large purchases of to remain Financial Stability during the depths of crisis materially eased financial conditions and are providing substantial support to the economy. Looking ahead we will continue to monitor developments and assess how our ongoing asset purchases can best support our maximum employment and price stability objectives as well as market functioning and Financial Stability. The Federal Reserve has also been taking broad and forceful actions to more directly support the flow of credit in the economy for households, for businesses large and small and for state and local governments. Preserving the flow of credit is essential for mitigating damage to the economy and promoting a robust recovery. Many of our programs rely on emergency lending powers that require the support of the Treasury Department and are available only in very unusual circumstances such as those we find ourselves in today. These programs serve as a backstop to key credit markets and have helped to restore the flow of credit from private lenders through normal channels. We have deployed these lending powers to an unprecedented extent. Enabled in large part by financial backing and support from congress and the treasury. When the time comes after the crisis has passed, we will put these emergency tools back in the tool box. As i have emphasized before, these are lending powers, not spending powers. The fed cannot grant money to particular beneficiaries. We can only create programs or facilities with broadbased eligibility to make loans to solvent entities with the expectations that the loans will be repaid. Many borrowers are benefiting from the programs, as is the overall economy. But for many others, getting a loan that may be difficult to repay may not be the answer. In these cases direct fiscal support may be needed. Elected officials have the power to taxandspend and to make decisions about where we as a society should direct our collective resources. The fiscal policy actions that have been taken thus far made a critical difference to families, businesses communities across the country. Even so the current economic downturn is the most severe in our lifetimes t will take a while to get back to the levels of Economic Activity and employment that prevailed at the beginning of this year. It may take continued support from both monetary and fiscal policy to achieve that. I would like to mention a couple of changes that we plan on making to our summary of Economic Projections beginning in december. First, we will release the entire package of sep materials at the same time that the fomc statement comes out. Previously some of these materials were released three weeks after the meeting as part of the minutes. This step will make more Information Available at the time of our policy announcements including the distributions of forecasts and how participants judge the uncertainty and risks that attend their projections. Second, we will add two new graphs that show how the balance of participants assessment of uncertainty and risks have evolved over time. These changes to the sep will provide a timely perspective on the risks and uncertainties that surround the modal or baseline projections, thereby highlighting some of the Risk Management consideration relevant for Monetary Policy. To conclude we understand that our actions affect communities, families and businesses across the country. Everything we do is in service to our public mission. We are committed to using our full range of tools to support the economy and to help assure the recover from from this difficult period will be as robust as possible. Thank you. I look forward to your questions [inaudible]. Chair powell, from the washington post, thanks very much for taking my question. Im wondering if you can speak specifically about what indicators youre seeing that suggest that the pace of improvement has moderated including in the labor market and how correlated those indicators are to the recent rise in covid cases weve seen recently. Thank you. Sure. Lets start with february. In february we had an economy that was form performing well. The pandemic hit and we had a record decline in activity in march and ape. We had a record bounceback in play and june. That was expected the pace of improvement from may and june has now moderated. It is not unexpected. If you look at just about anything, for example, the payroll readings, payroll job gains in may and june were just outsized and theyre certainly still very large but the pace of improvement has moderated. That is the case for all different measures in the labor force, in the labor market, rather. Another would be claims. Just about all the data showed a big bounceback, but when you expect you had a lot of people go back to work at once the pace will moderate. The same thunk with Economic Activity. Most forecasts call for, you know, still a Significant Growth in the Fourth Quarter but not at the 33 annualized pace that we had in the third quarter. So in a sense that would be, that would be as expected. We have been concerned that the Downside Risks though are prevalent now which are really the risk of the further spread of the disease and also the risk that households will run through the savings they have managed to accumulate on their balance sheet. That that could weigh on activity. But what we see up to the present really is continued growth, continued expansion but at a gradually moderating pace. Thank you. Marti, associated press. Thank you. Would you talk a little bit about where you think the stimulus package that is being debated in congress is and how severe a threat that could be to the economy if it does not get passed, say before january . So it is obviously, it is for congress to decide the timing, size and components of further fiscal support for the economy and i will say that the support provided by the cares act was absolutely essential in supporting the recovery weve seen so far which is generally exceeded expectations. And i do think it is likely that further support is likely to be needed for Monetary Policy and fiscal policy. I just mentioned the two risks that i think we face. Those would be welladdressed through more fiscal policy one is the further spread of the virus. One is the lapsing of cares act benefits, the savings on peoples Balance Sheets that will dwindle but i think it is appropriate for us not to try to prescribe for congress what exactly they should do, what the timing of it should be and what the size of it should be and leave it at that. Nick timeros. Charles joining me with reaction to jay powells news conference, llp chief economist, principal, Constance Hunter and bring back Danielle Dimartino booth. I thought it was interesting. He made sure to leave off the well use our full range of tools to support the economy. That is something he has to reiterate over and over again particularly for the stock market . Well, yeah. Also for the bond market, right . So one of the tools that they havent brought out yet, but many people think they could bring out if necessary is yield curve control. So i think powell is really connecting the dots here. He was talking about Risk Management, what theyre doing with the new summary of Economic Projections, tying that to what is going on in the economy and balancing all the risks of having low rates for a very long time versus support needed to keep Financial Markets liquid and keep capital flowing within the economy. Charles danielle, your thoughts on what weve heard so far . It was interesting for me to hear jay powell say that he was fully prepared to put the tool box away, the unconventional policies away, as soon as the worst of this disaster has come and gone. In his last press conference he mentioned that they kept zero, they kept Interest Rates at the zero bound for seven years and didnt produce a bubble. Presumably didnt produce any overvaluation. I would really like to be the person having a recording of what he just said given the fact that the fed, that the last recession ended in 2009, and they didnt put quantitative easing away until 2014 and did not normalize Interest Rates for another year subsequent to that that is much more where market thinking is in terms of what this fed is going to do to maintain low Interest Rates for a long period of time. The only other, the only other, the only thing that could disturb this dynamic if you will, what we started to see with concerns of a blue wave and that is Interest Rates rising of their own volition, something i know that the fed prefers would not happen on their watch. Charles yeah. That gets us back to i guess yield curve controls. But, constance, one thing, powell fed, maybe a epiphany he had over the years, the kpart of the economy, the parts of the economy normally dont do real well with the policy prescriptions of the Federal Reserve, he said their goal is maximum employment, then he added this part, that is broadbased and inclusive. They keep going back here to suggest that were going to go way over 2 inflation as certain pockets of our society dont have low unemployment. Not just the average number but certain other demographics. Does that change the dynamics at the fed at all . Yeah. You bring up a good point. This is a slight shift. So what we found before the pandemic, we had very, very low Unemployment Rates and, what this did was it provided a more inclusive recovery. We saw lower unemployment in a broader subsection of people. So that cuts whether you want to look at it on education demographics, whether you want to look at it on ethnic demographics and so it certainly broadens the scope and capacity of the labor market to employ people by having rates so low for so long. This is a very, very different recession though than the Global Financial crisis. As everybody noted we came into this very strong, we had a really good economy, we had the shock from covid, had we gotten a handle on the virus early and fast i think we would be out of the shock much like china, asia, experienced sars took it more seriously. The rest of the world was not prepared. It is a pernicious virus. Were seeing it come back in europe. That were seeing come back here. That is impacting the Services Sector which normally doesnt go negative during recession. We keep going to get our haircut or to the dentist in our recession. This recession is the very different the way it impacted service. Charles right. If we get to a point where we have a vaccine. We can start really resume these services we may see employment pick up faster than anticipated. Right now by the market and that would certainly impact, you know the length of time the fed keeps rates low. Charles yeah. To that point, danielle, you know, today dine, they own applebees and ihop, up 7 . Darden restaurants are up. Airlines during the show, are rocketing higher, theyre outperforming the socalled covid plays, you have to wonder, you mentioned the services index, ihs, the markets index, the expectations component of it was huge. So there is an anticipation in this society, in this economy that not only will we get additional stimulus, fiscal and probably monetary but well get a vaccine and, i dont know that we need to have it widely distributed to change the mind set of folks in the economy. It boils down to letting states unlock the economies. They have to unlock for these economies to grow . I do, i agree with you, charles. I think that we could have had a much more rapid unlocking to what constance is point was, if we had rationally, had more coordinated response to the virus, we would have not closed down to the same extent we had. We would have been opened much earlier. You know, the fear here is, and a lot of the reticence that youre hearing as you continue to see Small Businesses close, charles, is that if there is another patchwork response, if every state is going to go their own way again, then that is going to unfortunately hold the Service Sector back for a longer as we head into the next wave of rising hospitalizations, rising fatalities. The better solution would be to say, we as a country are going to come together and insure that our actions are going to make sure that as many Small Businesses that can stay open are going to stay open, despite what is happening on the Public Health front. Charles ive got a minute to go so i just want to get an idea what you expect the fed to do . You told us youre going to give this to us. It is going to happen next month. Theyre doing 80 billion in treasurys buying back. 40 billion. Constance, what will we get different what will we see different, what is the extra accommodation we should expect . Depends on the fiscal outcome. Do we get a skinny bill. Depends what happens in commercial real estate. They have not done any commercial real estate purchases. That could start and it really depends on what the makeup of the senate and the white house is going to be which we should probably know by december. So all those things are going to charles at least the senate. Charles yeah. We have to leave it there. So far the markets are okay. Last time the markets sold off, they wanted a little more clarity from powell. Well see what happens, danielle, constance. I couldnt ask for two better people to help us hash this through. Thank you very much. Well continue to monitor the press conference for you. 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Stocks are having a pretty good day as well, this amid fed chair Jerome Powells speaking and still, the election uncertainty. On all this, i want to bring in bmo chief Market Strategist brian belski. You have been extremely bullish for a long time in these fits of anxiety that we see from time to time, whether it was all september or all of last week, certainly keeps you busy. Are you changing anything, though, with how you think the composition of this rally is going to go, if theres a President Biden in office . Not thanks for having us, by the way. Not if theres a President Biden and a split congress. Not if theres a President Trump and theres a split congress. I think the composition of your portfolio has to change, charles, it just has to change if things surprise, it looks like the markets going to be surprised right now in terms of if things switch over on the senate and become more of a blue wave, we need to retrench a little in terms of how we are going to invest. The quick question you are going to ask me is well, are you still bullish, will markets still be up. The answer to that is yes. I think the trend of the market might be a little bit different, meaning with respect to how fast its going to go up or how its going to go up, so we are going to change our overall forecast but the composition of that forecast, absolutely positively has to change if indeed we reverse back into what the consensus was saying quite frankly before the election, and a blue wave is upon us. Charles right. Right. Although it looks like a very very very long shot and the markets ahead of you, the market has already spoken saying that no, the gop will retain control of the senate. In fact, they picked up house seats so some of the more draconian measures that wouldbe President Biden has promised on the campaign trail will never see the light of day. I think theres a lot of cheer about that but what about some of the things that there could be compromise on . Materials, interesting enough, were down yesterday but they are rocking bigtime today and some other parts of the markets seem to be coming to life here. Its a great point. Materials would be the one especially that i would be looking at, especially on the copper side, quite frankly. Maybe a little bit on the steel side. Domestically, not as much but from an international perspective, yes, because clearly, some tariff situations could change without congresss benefit or help from the president , the president could just go ahead and do that, very similar to the way President Trump enforced the tariffs. That could be a change. Industrials, quite frankly, could be a little more mixed, because obviously, from a domestic side of things, it could still be hurt if a President Biden becomes more friendly with respect to international growth, it could be a bit of a bid in industrials and frankly, tech. Tech as well. The democrats are no friend to tech, either. If you do a lot of research and look at how they have gone after the tech companies, be interesting to see what would happen there. Lot of people blame the republicans for being bearish on tech but i think in a lot of ways, the democrats are actually more bearish on technology. Charles we did see recently where some democrats talked about breaking them up, although Silicon Valley put a whole lot of money into the biden campaign. Jay powell right now still speaking. The markets havent moved much, we are mostly sideways. What do the markets need to see from the Federal Reserve . I just got 30 seconds. What kind of accommodation do we need to see next month . Federal reserve has basically said they stand at the ready and they will be and they have proved it. They will pump more money if they need to, quite frankly. Charles prime the pump, prime the pump, prime the pump. The bank of england did it today. We know the ecb is going to do it. Jay powell and company. Everyone is banking on you. Our viewers bank on you, too. Thank you very much. Always appreciate your help. We are doing pretty good here, folks. The market rallying yet again. Four strong days in a row. Liz claman, making up the lost ground of last week. Almost all the indices positive, near alltime highs. Liz i know. Its unbelievable. Folks, weve got multiple plates spinning in the air as we kick off the final hour of trade gains, with the presidency hanging in the balance, we are now in day four of the bull run blitz. Investors voting with their wallets and look at this on the screen. Remain undaunted by the lawsuit lists swirling around the 2020 president ial election. Dow jones industrials up 587. Its the nasdaq that just hit session highs. We are up 328 points. The s p clocking 80 points to the upside here. Al