Fed Decision Not as Bad as the Market Feared, JPMorgan's Michele Says

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Transcript

00:00What's your first reaction of this decision?

00:03Not as bad as it could have been.

00:05There could have been a lot more dissents in favor of no rate cuts.

00:09When we look at things like PCE, we expected they would lower core PCE by a tenth.

00:17They did that.

00:18They left the unemployment rate for next year roughly where it was last year.

00:23They did raise their expectation of GDP a couple tenths from where it was.

00:28So to me, that seems to be, if you want to call it a hawkish tilt, the one hawkish tilt.

00:34And of course, adding the extent and timing of additional adjustments to rate policy going forward, that was pretty much in the market.

00:43So I think mostly as the market expect and nowhere near as bad as the market feared.

00:48I look at everything that just happened in the last few minutes and, you know, everyone got what they wanted.

00:54Those hawks on the Fed that didn't want to see a rate cut, they got that.

00:59When you look at the Fed futures market, we had two rate cuts priced for next year, mid-year and the end of the year.

01:06Now there's only one price for next year, and it's in the fourth quarter.

01:11So you got what you wanted.

01:12You got the market moving away from being in a rate-cutting regime going forward.

01:18But if you look at the doves on the Fed, if you think about the administration, they got what they wanted.

01:25They got another 25 basis point taken off of base rates, and the market's responding positively to that.

01:31It's rare that everyone gets what they wanted out of an FOMC meeting.