Forward on inflation, the fed sees core pce inflation dropping, to 1. 6 that is the inflation excluding food and energy original closer to 2 objective fed sees inflation rising next year under target range there, now on growth sees gdp finishing 2. 2 for the end of the year here, 2 for next year, then the fed sees slowing growth in years 21, 2022 down slightly but still in that 2 range there, on jobs, the fed sees jobless rate going up a little bit to 3. 6 currently 3. 5 , the fed then see it is jobless rate tick down again back to 3. 5 , next year, now finally, talk about that all 17 members of the fomc vetted to keep rates unchanged, that means this was a Straight Line, i called it last time it was Straight Line december, of 2015 back to you. Thank you so much for that, here to discuss former dallas fed advisory, danielle, expect a planning chief Market Strategist jeff point Bridge Capital paul lambert, lets get into what we heard no change he in terms of the expectation, rates unchanged this is interesting, nothing coming down the pike in 2020. I think they want to say they have taken mid cycle adjournment deployed it going to be able they feedbackiexpect down next year no uncertainty terms not going anywhere 12 months we are going into a Holding Pattern this is the goldilocks scenario powell is looking for especially because he expects Unemployment Rate to take up a tiny bit tick back down he is expecting this economic expansion to continue. Going to ask you watching the market dow down 20 points as fed says it is goings to be monitoring globe developments, weve got tariffs, set to come on, on sunday possibly, they will be delayed the fed watching market watching this as they digest as lot, agency taking in getting ready for powell to speak. I think the markets going to put on rabbit ears to see if i go about repo Credit Suisse reeled a report talking about repo market ready to imploded i dont think they node what is going on trades desks take money from repo window after close to trade overnight putting it will back next day that is basically fofk the feds hands, to open the permit permanent repo my twoed the expectation fed is going to expand the Balance Sheet, pouring liquidity into market, the machine oils if you will speaks to jeffs point your thoughts about 2020 fed is saying were not going to make any rash moves but so much to consider you have to think about how the economy is chugging along, gdp, 2. 2 projection concerns about growth. There are concerns we had a fresh cfo survey out this morning 58 of cfoss anticipating cutting costs in year cutting costs a plooilt polite way saying we are going to continue not making investments but cutting costs means, layoffs Going Forward, so it is interesting that there is a disparity in views between, the people occupying the csuite in charge of hiring and firing and Federal Reserve officials to jeffs point i think that everything is going to come down to next few weeks literally this is not a quiet holiday season, on wall street, because going to be all eyes on whether or not the fed is going to have to expand the size of the repo facility i agree with jeff they should indeed if they are able to i dont think all banks are necessarily onboard, with the fed launching a standing repo facility but this is something that has pen under debate on committee all year long if they really want to quash an sigh she has opportunity to launch that. It is interesting danielle mentioned trying to quash it last year hike in december sent markets in tailspin seems powell the rest of the fed right now being being very, very cautious, here. Welltaken two years we got to uninventoryful day, and you know they created unnecessarily volatility last year, they cost investors money last year, but, you know, we have had 40 plus days, 1 move higher or lower in market we volatility dropped dramatically, one of the things would i like to see forward, i agree with everything that powell said what was released today in Statement Today that they are not doing any moving for 2020 i think right next year, is goi be on getting inflation back over not just at it is 2 targeted, but above its 2 target, so you know theed if is looking at a very low Interest Rate policy, for a long time, but it wants inflation above 2 bullish for the markets i think going to help donald trump quite a bit, too. Danielle your thoughts as we head into 2020, the economy is the big story driving election for sure the president has been vocal how fed has proceeded thus far fed maintained position independent, yet at the same time, it seems like perfect storm starting to set up here. You know, it does, and it doesnt. Look go book to 1972, 11 last 12 Election Years fed has been active, and has made news i think i jay powell wants to avoid any appearance of politicking very adamant about that nothing to do with the credit markets right now i think that a lot of people inside the beltway perceive that trying to assist donald trump being reelected that wouldnt surprise me, if if that is the reason, behind no dissent on committee a unified front getting in front of this Election Year but, again, it is extremely commonplace the majority of the time during Election Years youve got a fed that is he lowering Interest Rates if they truly want to try and hit that inflation target that jon was referring to they might think about cutting rates again right now the probability of doing such a thing is 5050. Do you think he will address that in press conference he was been known to say a word here or electors foot in mouth a little bit i am sure going to choose words carefully. He has become extremely circumspect compared to first at podium he has begun to read answers has been so measured as to not say anything creating any misperception, in the marketplace, yes jon i agree it is a good thing it is a good thing that he is trying to not set off any bombs, because of his conversational way of speaking with the markets. Jon you going to say something. No this is how i think pou pel has become much better last year kind of a disaster quite frankly, and you know we will see what happens i think if we go get a little inflation would be good for markets we need inflation here, i think powell realized that now, he doesnt needed to be worried about squashing inflation he was worried about last year, and if we get a little bit of that steepening in yield curve set up for nice 2020 if we get financials rallying with steepening yield curve a really good 2020 in markets Going Forward. Jon. Jackie i will jump in too, i think when his press conference that is coming up that is what Everybody Needs to focus on, some won will ask him you know what is your strategy for inflation now the fed is having a debate internally about framework how does it interpret 2 inflation objective if powell wants to make up for to some lost grund after all years very low inflation that is super bullish for markets you will see market move on that. How does he handle that delicate balance when it comes to inflation picture watching what is happening in the rest of the world that has been part of the problem too, rates so low everywhere else, even in the negative space in territories, how does he manage that walk that tightrope. Well i mean one way you manage it is by getting peoples expectations for inflation up. So you know one of the reasons in addition has been so because people dont see much of it or expect much in the future. So you have no bargaining leverage when bargaining for wages, if trump im sorry if if chairman powell kind of shrugs shoulders says yeah inflation if it goes up a little more than 2 i can live with that. That raises expectations not just in the economy but also in market i think you will see stocks rally on that, one other thing that i think is working mentioning, we are talking about kind of the fed where it stands on politics, powell is doing all these things i think with understanding there is substantial chance that he is not going to have this job after two years. You know if President Trump is reelected he is expressed his displeasure with powell if democrat in office probably want democrat. So you know, powell he could be last hurra. Stay there i want going to the for mr. New York Stock Exchange see how traders react to this gerri willis there for us. Jackie that is right traders obviously, fan of this, as you can see, we have seen dow from where 27 to 30 points down, down 6 points briefly positive territory, this is what traders expected, no change in rates. What they wanted to hear but they are going to be listening closely to that presser, as a matter of fact one trader telling me he hopes the Federal Reserve chairman has a red bull to spice up that there is a long boring presser, here is what else they told me that the forecast seems low 2. 2 4q, 2 next year they think not high enough going growth will be significantly higher than that, and they like the fact that the fed turned in a unanimous decision. That to them signals some kind of con siftency. Everybody thinking is this what will happen once before i came to air telling me almost too quiet as we wait for this remember strong jobs numbers on friday, and just today we had core cpi up 2. 3 one told me that is not no inflation, so there were concerns coming into this but i have to tell you as long as that press Conference Goes well, we may continue to see very Light Trading here, not a lot of movement, back to you. Gerri will i guess thank you jeff straight out to you we are looking at Market Making a rebound here the dow almost at flat level after being down from most of the morning your take son how you feel the markets are reacting to this i am looking the at 10 year 1. 8 , 30 year 2. 2 . I think the markets going up seasonally this is a strongest time of theyearold market saw santa fails to call bears roam i found comments out of goldman very interesting said economy reaccelerating i think is happening do i think that will inspect to pickup in inflation i agree request jon very bullish for the equity markets. Yeah jon i want your take what on statement said about unemployment the jobs rate 3. 5 now they see that ticking up but then coming back down, you know when you look at the unemployment report from last week, that just blowout number that seems to indicate that, you know, our economy is chugging along very strong, is there a reason to be so cautious . Well, you know, i think that the fed is seeing the job market, as one of the real strengths of this economy, the fact that unemployment is so low, is one of the reasons. It is the key reason whys consumers continue to spend money, the fed models have not really worked they have been expecting that low unemployment to cause inflation, and it hasnt done that. So you know i dont think there is a lot of worry at fed right now about what is going on a no job market i think i am going to keep coming back to this i think what powell has eye on in 2020 getting inflation back over that 2 target. You are nodding your head. Absolutely that is definitely where he wants to go but to you are i dont point about cpi report, analysts friend of mine on street noted we have had core cpi look at pce measure doesnt propeller measure Health Care Inflation really rising quite rapidly affects every American Family we had core pci above for 21 months in a row. So you know, it would be good to see a little bit of a reacceleration in in the metric fed follows, but i am not sure it is going to happen. Powell i want with our take on looking into 2020, Earnings Growth you know, our economy, rates being low, stimulating growth as well do you see the picture next year, being stlaenl better than we saw this year he stlaenl better he i do, earnings better 2020 we are going to grind higher finally the fed is actually kind of out of the policy Decision Making people are not looking at fed every quarter like in 2020 not going to look like 2019. That is good actually, what were going to see weve got 2 1 2 million more people working this december than we had last december economy is really strong right now, it is really i mean you hate to use term but pretty goldilocks right now i think 2020 we are having earnings higher than 209 i think expecting may be, close to 10 Earnings Growth in 2020 that should be good for markets not a crazy multiple either, so i think i think we arityed upped for a good year, and you know u. S. Is still place to be. What about sunday tariff deadline china trade on back burner the moment weve got usmca moving forward that is a positive, to kind of cushion this market but another round of tariffs on 156 billion dollars in chinese goods that could be a problem. Yeah, but i think going to get delayed push them out into 2020. I have said on charles show last week when i was in new york i promise you i dont know where the tariffs issue going in or not go in i personally think not going in. But i do promise you there is not going to be a first phase trade deal this year. Hmm. Jackie if could i throw one factor out there. Go ahead. You know, this we now have Interest Rates very low, the fed accommodating the economy lets not forget running trilliondollar budget deficits, you know government here in washington, is spending like no tomorrow. Shouldnt completely surprise us because there is an election next year, i think that is another factor that is going to push this economy forward, just kind of massive, massive government spending, that is being approved and passed by republicans and democrats in 2020. What about the argument fed cannot keep doing this forever . As some point something has to give doesnt seem like happening as long as donald trump is in charge. You know, if back to deficits, the fact they are growing, i mean you have to have a Financial System that is capable of absorbing them i think that over the next few weeks, as banks start to take down level start to window degrees Balance Sheets not being penalized going to be a true test to see if fed has to rampup expansion of biologically sheet nobody seem focused he that feds increased Balance Sheet 3 306 billion dollars some call that emergency measure saying everything kumbaya no defense blah, blah, blah fed is active i think market anticipates any disruption that jay powell is not going to hesitate to increase the amount of not qes pumping markets up something out there on Balance Sheet, the fed doesnt have a Balance Sheet policy actually you know the factor that really matters is what is this strategy for holding longterm security are they going to hold a lot of 10year treasury notes Mortgage Backed securities . And, despite all of the mayhem going on, in the markets, the fed saying they are going to expand you know expand holdings a bit they never said what their longterm strategy is for longterm security. So i permanent thigh the market is in dark about about what fed bam sheet poli fed b sheet policy may clarify that at the press conference. I hope they do because i think there is a lot of impression on wall street not right now that fed is in if dark about its Balance Sheet policy. They are i think causing a lot of anxiety among investors. Thank you so much for your insight we are watching the markets, a News Conference minutes from now Holding Rates Steady as we wrap up 09 make sure you stay 019 make sure you stay with us. Oh, ho oh, ho, ho, ho you. You got me. Uh, what do you want . Ive got uh, ai robots, ive got vr goggles. I want your sled, please. No. [ chuckles ] timmy. Itd be a shame if this went viral. For those who never compromise. The mercedesbenz winter event. Whoa. 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