00:00So you think a hawkish cut is what's on deck later today. Yeah, absolutely. And thanks for having me. Yeah. So we ultimately think they will cut at this meeting. But the all of the other information that we're going to get will will probably have a hawkish shift. So we think there's a pretty good chance that the 2026 median dot shifts up from implying an additional cut in 2026 to being on hold. We also think Chair Powell will you know will be
00:29having to explain at the press conference that this is the last cut for a little while. We ultimately think the Fed is likely to be on hold throughout his term. And you could also see some hawkish shifts in the statement really sort of underscoring that additional cuts from here will be dependent on downside risks that we've been talking about in the labor market actually being realized. How much does it matter if he indicates that he is going to hold rates tights given the fact that he's probably not going to be on the Fed after the first
00:59couple of months of next year. In other words is he just a lame duck or does he have more clout on the committee than some people are given credence to. Well I mean ultimately you know he has not signaled that he's going to step down. So there's a very good chance although you know the precedent has been that that chairs when they their chair term ends they do ultimately step down from their governor roles as well. But but it does seem like there's more question around if Powell will do that.
01:28If he does stay on then he will have a say. He'll continue to be a voting member on the FOMC is as long as he's there. You know now you know ultimately the markets have already priced out. I think the first you know the next additional cut is is more fully priced into markets in June. You know so that markets have kind of reflected this idea that we're probably going to be on hold for the remainder of the year. Do you think he hasn't for the remainder of the his term. Do you think he has he hasn't signaled yet to your point where whether or not he's going to step down as a
01:58governor. Although it would be very odd if he didn't leave the Federal Reserve when his chairmanship is up. Do you think for him it really is highly dependent on who the president picks.
02:10Yeah I mean I you know I am I am you know Powell it will be obviously it will it will be a little bit unprecedented for him to stay on. You know I think Michael Barr is
02:21another one that you know is also a question of if they'll step down and and we haven't heard anything from him on this. Yeah. And I mean I do think that that both of those folks and and and everyone at the Federal Reserve is is very committed to you know the independence of the institution.
02:38You know and I think they're you know their commitment to that you know could drive them to stay a little longer. But you know of course we'll have to see.
02:44When it comes to Fed independence the president yesterday was talking about how these governors appointed the Biden administration were done via the auto pen.
02:52He wants the Treasury Secretary to look into it. A lot of people don't think this is going anywhere because we have legal challenges. These individuals were Senate confirmed.
03:00But do you think do you do you think at some point the market will maybe test and this concern about Fed independence.
03:06Yeah. Well I mean this has been a major a point of issue. And I think the fact that we're even talking about it you know is is is maybe you know somewhat concerning in terms of of the broader market discussion.
03:22You know but I think there are several points next year where you know that discussion could could certainly come to the forefront.
03:29Now we'll have I guess the in January the president will announce who he is picking for the Myron opening.
03:38And we think ultimately that will probably be who he wants as the next chair. But then after that we'll also have the Lisa Cook case.
03:46That is also being heard early next year. And the merits of that case are likely to be announced later in the year possibly you know in June.
03:55So that will be another point that that the markets will have to contend with this question on on how many personnel how many new governors.
04:03You know ultimately Trump will have to to put on the FOMC. And you know there is a scenario out there where he has you know a significant amount of governors that he can appoint.
04:13We know which can shift the the you know the view or the bias of the committee in a more dovish way. Of course we'll have to see what happens.
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