September 17, 2025 • 33 mins
The Federal Reserve announced its latest interest rate decision today, followed by remarks from Chair Jerome Powell. In this episode of The Jon Sanchez Show, we review the Fed’s action, examine Powell’s commentary, and discuss what these signals could mean for future monetary policy. We also outline seven ways these decisions may affect your financial life, from borrowing costs and mortgage rates to savings, investments, and retirement planning strategies. This conversation provides context for individuals and businesses considering how changes in interest rates can influence day-to-day money decisions and long-term wealth management.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
All right, look around number two, welcome to the John
Sanchez Show on News Talk seven eighty k which that's
how pol leisure to be with you on this Fed
interest right day, and of course how paulasure to be
with my partner Jason KHT.
Speaker 3 (00:11):
That's kind of part for the day. Jason.
Speaker 2 (00:13):
We think the show was going to go fast before
wait till now?
Speaker 3 (00:16):
Yeah, no, kiddy, isn't that the truth? My goodness? How
are you? My friend?
Speaker 4 (00:19):
A good good I'll get the duct tape out next
time and we should be all.
Speaker 3 (00:24):
There you go, there you go, the bubble going with
the duct tape. I like it. I like it?
Speaker 1 (00:30):
All right, everybody, Well, we got the technical bugs behind us.
Let's get down to business because we have a lot
of things to talk to you about. Well, today we
receive the FED interest rate decision, which of course is
followed by the ever so important UH press conference by
Fed shair Jerome Powell. What are we going to do today, Well,
we're going to talk about, of course, with the Fed
decided to do with interest rates. What hints they may
(00:52):
have given us regarding the direction of interest rates? Do
we have more cuts ahead of us? Do we not
have more cuts?
Speaker 3 (00:58):
Ahead of us. What was the the vote?
Speaker 1 (01:00):
And remember, folks, as I said on the show yesterday,
this was the meeting that we have where we get
the Summary of Economic conditions, better known as the dot plot.
This is where all those FED members get to vote
on their own or not vote, but write down on
a piece of paper where they think interest rates are
going to going. And I think, Jason, we're going to
get to this, so don't let the cat out of
the bag.
Speaker 3 (01:20):
But I think this was.
Speaker 1 (01:21):
Probably one of the biggest, you know, market moving events
when when the news came out as far as how
all these different members voted, it was a bit of
a surprise to the street. I think, is again we're
going to go through the details on.
Speaker 4 (01:35):
Yeah, and the street was poised for some you know,
a couple folks that were you know, maybe in disagreement.
Speaker 3 (01:44):
And some dissentership.
Speaker 2 (01:46):
I would say.
Speaker 4 (01:46):
Dissenters and we'll call them, uh, you know Trump candidates
for FED.
Speaker 2 (01:53):
Board member president.
Speaker 4 (01:54):
Right, So people who there's definitely a lot of I
would say, uh, what's the term you applying for the job?
Going on constantly from the Rick readers or the David
Zervos or Waller or you know, sort of saying what
you think he wants to hear. Right as well, But
like you said in in the dot plot we'll get
(02:15):
into later, there's more than just two that are making
odd comments or things that you wouldn't normally expect at
this point in the cycle. And I think it highlights
again Up, I'm gonna say it. People will disagree with me.
I actually like Powell. I think that he's done a
good job for all of the madness he's been dealing
with politics aside.
Speaker 2 (02:35):
Right, But.
Speaker 4 (02:37):
You've got a point now that shows, especially with what
you'll get into later, everything is confusing. The tea leaves
couldn't be any more jumbled and smashed, and you're confused
to honestly, And that's part of it, right, And I
would say, much like anything when we do our portfolios, right,
the making a change for the sake of change is
(02:59):
not never a good idea. Like the number of times
I can remember in my past where I made a
decision on a trade merely because of I haven't made
a decision lately, tends to backfire. And so in this case,
if it's not broke, don't fix it. Not saying it's
not broken I'm not saying that they're not trying to
fix it, but sometimes waiting until you have some sort
(03:20):
of direction could be helpful.
Speaker 2 (03:23):
And that's part of what.
Speaker 4 (03:24):
We're seeing now is they're all really confused because there's
a confluence of different things going on that will probably
never have to deal with. Something is extreme again, like
are these job losses in the sake of companies that
are slowing down or is it maybe we have this
whole brand new thing called artificial intelligence that may take
over bazillions of jobs or change jobs. If you're the Fed,
(03:45):
you don't know, right, And they said that cut rates
because of X, Y and Z.
Speaker 1 (03:50):
It's and pal through in along those lines is we'll
get to immigration.
Speaker 3 (03:53):
He's saying, look at it. We've got this problem.
Speaker 1 (03:56):
There's a bunch of people getting kicked out of this
country and that's affecting the jobs market, which is impacting
the Fed's confusion.
Speaker 4 (04:02):
Yep, it is, and it's going to be tough for
a long time, right, because you don't know how much
of the job changes are economical, or more so just
companies that aren't sure same thing. They don't have much
clarity on what are tariff's going to do do we
need to hire more people? Are lower interest rates going
to help? Are they gonna hurt?
Speaker 2 (04:21):
It is?
Speaker 4 (04:21):
It is not a a and these are first world problems.
I'd say they're good things, right, lower interest rates. The
economy is doing fine, you know, it's not like we're
in a death spiral of terrible results. And yes the
jobs are decelerating, but we're not negative two hundred thousand
jobs or something.
Speaker 2 (04:38):
It's just less good.
Speaker 3 (04:40):
Twenty two months, right, right, But four.
Speaker 4 (04:42):
Point yeah, yeah again, but four point three percent unemployment
overall again, believe what you want, but that's historically not
a terrible number. And the economy is you know, GDP
is still very good.
Speaker 2 (04:54):
Like it's not.
Speaker 4 (04:56):
I'd rather be in this situation than the oh gosh,
things are really.
Speaker 2 (04:59):
Really really terrible in what do we do now? We
were analysis paralysis?
Speaker 3 (05:03):
So absolutely all right.
Speaker 1 (05:05):
So, as you can tell, there are a lot of
things that came out of the press conference as well
as the FED actual decision. So our goal tonight, of course,
or this afternoon, is to go through all of this
with you again.
Speaker 3 (05:15):
We're gonna we're gonna make it all make sense to you.
Speaker 1 (05:17):
I promise we're gonna be bopping around right now, but
we're gonna do We're gonna summarize what happened in the
FED interest rate decision for you, We'll summarize what happened
in the UH power press conference, and then hopefully time permitting.
I really want to get into the most important thing
is or which is how this can impact all of
your lives. Right, we got a twenty five basis point
cut today.
Speaker 3 (05:37):
Right, we all knew this.
Speaker 1 (05:38):
We've told you it was gonna happen. It did happen,
you got it. But most importantly, how is this going
to impact you? Both, you know, for the positive and
the negative. Yesterday on the show with Corey and Dewright,
we talked about how a quarter percent cut could affect
you as far as your real estate holdings and investments
and so on and so forth. Now we're gonna kind
of look at your overall life so you know you're
there again, You're our most important thing. This was not
(05:59):
a surprise, As I've said, I can't tell you how
many countless times on the show or on my stock
updates in the morning.
Speaker 3 (06:05):
Look at this is this was baked into the cake.
Speaker 1 (06:07):
And boy, I tell you, Jason, this would have been
a disaster had the FED not done anything, or a
disaster had they given us a half a percent cut.
So this was a good number, even though the market
was kind of disappointed. So let's start with the market
action today, and then we're gonna go into like I said,
the summary of the meeting, Summary of of Jerome Palace
(06:27):
Press conference, et cetera. Because this was the interesting side. Now,
we said leading up into this meeting, and we hit
it on the on the the mortgage side, that a
lot of times you can't get you can get a
negative reaction to the mortgages, you know when the FED
catch rates. And today you know, just exactly that. And
unfortunately Dwight just got a hold of me right before
(06:50):
the show and he's unfortunately tied up in a meeting,
but he can't join us. But he's like, John, we
got to talk about this, and he's right, Jason, the thirty.
Speaker 3 (06:57):
Year mortgage, you know, with a quarter percent, and this
is what we weren't about.
Speaker 1 (07:01):
With a quarter percent cut, thirty year mortgage, according to
Mortgage News Daily, shot up nine bases points right to
six point two two percent. So once again it's the
opposite of what YEP but everybody was talking about, so
that one came true as far as our prediction is concerned.
But let's get down to the market reaction today, because
we had a we had a really solid day to day.
(07:21):
We're up, you know, about three point fifty four hundred
right around there when the press cars or when the
interest right decision came out, and then we we began
to weaken a bit, and folks, we barely had a
gain on the Dow. I think at our worst level,
right in the middle of a Jerome Pal speech, we
were only up like eight nine points on the Dow.
The NASDAQA went negative, SMP went negative, clawed our way
(07:43):
back a little bit. It wasn't all that bad of
a day. We finished with a gain of two sixty
on the Dow point five to seven percent, but the
Nasdaq last seventy three.
Speaker 3 (07:50):
The SMP gave up six.
Speaker 1 (07:51):
So once again, the market did not get the reaction
or give the reaction like a lot of people thought
they would when we finally get this interest straight cut
that everybody's been talking about. Remember, folks, this is the
first intro straight cut going back to twenty twenty four.
So when we come back only to turn over to Jason.
He'll do his market recap as he does so eloquently.
Then we're going to get into again what was the
uh the chairman talking about in his press conference? What
(08:13):
did this statement say? And then again, how's this going
to impact your life? So a lot of things will
be bringing you sit back and relaxes. Turn it over
to Kristen snow in the right now traffic center. Hello,
my dear, welcome back to the John Sanchez Show on
Newstalk seven eighty koh al right, here's how we finished
up in this volatile session today, a two sixty gain
on the dial point five to seven percent to a
(08:35):
close of forty six thy eighteen. Nazek lost seventy three
point thirty three percent, closing at twenty two thousand and
two sixty one, and the SMP lowered by six points
a fraction loss there right at the sixty six hundred mark.
But where the action was, of course, the bond market.
But before that, let me tell you what oil did.
We had a fifty cent loss at sixty four h
three A barrel gold gave back seven dollars and thirty
(08:55):
cents three thy seven eighteen an ounce and Jason, back
to what we were saying with the thirty year mortgage,
the bond market obviously rose, as we are indicative by
what those mortgage rates did. Seven basis point increase on
the ten year treasury to a yield a three point
six y five. That was the biggest excuse me, five
basis point increase to yield a four h eight apartning
(09:16):
so five basis point increase four oh eight. But the
five year where my eyes were looking, seven basis point
increase there. The three year was up six basis points,
the two year was up four basis points, the thirty
year up three. So run across all the major maturities,
we have bond yields rise on a day or the
Fed cuts interest rates.
Speaker 4 (09:33):
Yeah, And I mean this is what we stressed folks
all the time, is the market is already pricing in expectations.
Speaker 2 (09:40):
Right.
Speaker 4 (09:40):
So anytime when someone says, oh, hey, the Fed's gonna
cut rates tomorrow, we should go do something. Unless you
think they're not going to do what's consensus, then don't
do anything. And the reason that the long end of
the curve rose today again we'll get into it a
little bit, is there's some confusion as far as the
members as to what forward rates look like from here.
(10:04):
And that is why even though the FED and I
was in a meeting with a client during the conversation
when the Fed cut rates, and I said, take a
look at this. Here's a perfect example. The FED just
cut interest rates by twenty five basis points today, and
you look up and down the curve, it's either down
a bit or two or up a bit of two.
You know, like, you're not going to see it drop
twenty five basis points today unless they cut by fifty,
(10:26):
because that would have been a shock. The market is
already priced and where the Fed is going, and so
by the long end of the curve steepening a little bit,
this is just implying the probability of lower rates in
the future, maybe less than what people had originally thought
coming into too the meeting today.
Speaker 2 (10:40):
And that's a lot of why you didn't.
Speaker 4 (10:43):
See what you thought you'd see, because a it's already
priced in and b the long end moving up a
bit just shows that maybe the market's a little too
excitable about the next couple months of where interest rates
are going.
Speaker 1 (10:55):
Absolutely mean, we'll get into with those what those odds
are here throughout the show. All right, So let's go
into some of the intricacies of the FED decision and
the press conference again. So a couple more things before
we start really rolling up our slaves and getting deep here.
So the other thing that happened, So, like I said earlier,
we had the dot plot meeting. Right, this is where
(11:16):
again the FED members get to, you know, on their
own opinion.
Speaker 3 (11:19):
Right.
Speaker 1 (11:19):
This isn't a consensus opinion of the nineteen members of
the FED. This is their own individual opinion where they
think things are going to go as far as interest
rates are concerned. But here's what's interesting, folks. Nine out
of the nineteen voting members of the FED, the policymakers,
they expect just one more rate cut this year. Okay,
so nine out of nineteen one more rate cut this year. Now, remember,
(11:42):
as I've been saying on the show leading up to today,
the Street was very confident that we are going to
get two more cuts this year October and December. So
now you've only got nine out of nineteen personally who
think that we're going to get you know, just one
more rate cut. Ten see more two or more rate
cuts this year? Ten out of the nineteen two or
more rate cuts. So very unclear at this point who's
(12:06):
going to win, right, the ten or the nine members.
So again, this doesn't mean how they're going to vote.
This is how they feel at this particular time, and
that's one of the reasons we got the confusion. Now,
the other side of it is we also had some
projections from the FED members in regards to twenty twenty
five GDP expectations the growth of the economy. They are
(12:27):
expecting the growth to be somewhere between one point four
percent and one point seven. That is up from previous
forecast of one point two and one point five. Okay,
so let's stop there, then we'll go to PC. What's
important about that? Well, once again, previous projection are now
new projection one point four to and one point seven
for the growth from one point two and one point five. Again,
(12:50):
the importance of that. Now you've got a lot of
the FED members saying, wait a minute, GDP is going
to grow, meaning the economy is going to grow, So
should we really be in an just straight cutting environment?
Speaker 3 (13:01):
Right? So may comments you want to make on that one.
Speaker 4 (13:04):
No, I mean again, it's just a lot of you
know concern you've got different member there's all these FED
members too, because remember they're in different places in the country,
that's right, and that is important as well. What someone's
seen in Boston could be different than what someone's seen
in San Francisco versus texts like. There's just difference of
opinions depending on regionally where you are as well too,
So that plays into some of it as well. Right
(13:27):
side of the political part is what they're actually seeing.
Boots on the ground, Bayse book will be important too
to see, yeah, a little bit.
Speaker 3 (13:34):
And that's the survey of the twelve ed districts.
Speaker 1 (13:37):
Now, another part of this confusing again, as we've been saying,
is the PCEE inflation, right, the personal consumption expenditures it's
called that's the Fed's favorite measure of inflation over CPI, PPI,
et cetera. So they got to kind of give their
opinions on this one also. Now pc inflation they're saying
(13:58):
consensus is to be between two point nine and three
percent for the year. Previous forecasts have called for two
point eight and three point two percent, so a little
bit of a of a downturn there again, nothing real major,
but the most important takeaway is, yeah, once again they're
looking for GDP to increase a little bit, which is
calls for you know, not cutting interest rates at that
(14:19):
point if that comes true. And most importantly again you
got the the members there talking about someone the cut
win cut this year and some saying, you know, we
want to so the bottom line and again back to
your point you set the opening of the show, Jason,
you know, we love Chairman Powell. He's done a hell
of a job. There is no doubt about that. And
(14:40):
he said over and over and over again throughout the
press conference, look at we don't know, right, we don't
know where things are going. We don't know where the
economy is going. We don't know what we're gonna do
as far as interest rates, because there's so many moving parts.
You've got the tariffs, you've got the immigration issue. You
have a lot of moving parts, and you know, essentially
he said, look, we don't really know better than any
nobody else, which I don't believe that, but they're.
Speaker 3 (15:02):
Still you know, very very concerned. You know.
Speaker 1 (15:05):
From that, we also had the Feds, the Atlanta Fed's
forecast for third quarter GDP.
Speaker 3 (15:09):
They lowered it from three point four down to three
point three percent. So you know what, who do you
believe on that? Right?
Speaker 2 (15:16):
It's impossible to tell.
Speaker 3 (15:18):
It really is it really is.
Speaker 1 (15:19):
So let's summarize the release of the Fed decision.
Speaker 3 (15:24):
So a couple things.
Speaker 1 (15:25):
Again, quarter percent cut that brings that target range down
to between four to four and a quarter percent. Remember, folks,
this is the FED funds rate. This is the rate
that banks charge one another. Okay, As I said earlier,
this is the first rate cut that we've received since
December of twenty twenty four. Lots of talk throughout the
(15:46):
press conference in regards to the labor market. The Committee
emphasized in their release the risk to employment have increased,
meaning the downside risk to employment have risen. Chairman Palace said,
look at we got a problem. You know, jobs numbers
are coming down. We know that exactly to Jason's point.
Is it due to AI, is it due to immigration
(16:06):
or is it a combination? But he said, we're not
seeing layoffs. Hence why as Jason said that unemployment rates
a holding steady, but we're not seeing new hires. And
he went on to talk a lot about what a
challenging an environment it is for new college graduates. And
you know, you and I have talked about this, Jason,
new college graduates in most cases and I'm talking bachelors,
(16:26):
not to advanced degrees, they're coming out, they take the
entry level jobs. Once again, these entry level jobs, many
of them are they're now no longer there because of AI.
AI is doing those jobs. So it is a challenging
market for these new graduates. And again the Chairman talked
about that inflations stile well above the fed's two percent target,
still a concern. And then again the Fed this was interesting.
(16:49):
The FED continue to reduce their holdings of the treasury securities,
the agency debt, the agency mortgage backed securities, et cetera
under the balance sheet policy. So y'all remember from when
the financial crisis and so on and so forth, they
Fed balance sheet.
Speaker 3 (17:02):
You know, they own a bunch of treasuries mortgage backed securities.
Speaker 1 (17:05):
So they're going to continue to reduce those holdings, which
is not favorable for mortgage rates overall.
Speaker 3 (17:11):
And then we won't get into that.
Speaker 1 (17:12):
So and then finally deciding a further rate adjustments, they're
going to watch the incoming data. As we knew they
were going to say, they're going to look at the outlooks, monitor,
the balance of risk and full employment, and you know
they're dual mandate, et cetera. So those are the key
takeaways from the Fed decision. Now when we come back,
we'll talk about some of the highlights from Chairman Powell's
press conference and then try to get in real quickly
(17:35):
how this is going to affect your life.
Speaker 3 (17:36):
Anything you want to wrap up on that.
Speaker 2 (17:37):
No, I think that's spot on lot right, beautiful coming.
Speaker 1 (17:41):
You got it all right, turned over to Jack Saban,
He's got news, traffic, and weather.
Speaker 3 (17:45):
Hey, Jack, welcome back to.
Speaker 1 (17:48):
The John Sanchez Show on Newstalk seven eighty kh Alright,
Fed interest right decision day. We're making our way through
some of the highlights of the session. Let's once again
recap you on what the market did. Two sixty gain
on the Dow, last seventy three on the Nasdaq, in
lower by just six on the S and ps. Just
check the futures looking pretty good though up roughlyer around
seventy or so on the dout side of things. So
Nasac's up about sixty five, So things look like they're
(18:11):
calming down, which is very typical. Gives the street a
chance to digest everything the chairman had to say in
the committee, et cetera. All right, let me, Jason take
a second here. This wasn't kind of on our agenda,
but I want to do this real quick. Let me
read the press release from the Federal Reserve telling us
what they did. So recent indicators suggests the growth of
economic activity moderated in the first half of this year.
(18:34):
Job gains have slowed, and the unemployment rate has edged
up but remains low. Inflation has moved up and remains
somewhat elevated. But you stop right there, Jason, you're going, huh,
I don't know about a FED cut or not. Y.
Speaker 3 (18:47):
Not the most rosy way to.
Speaker 1 (18:48):
Start a press release, but anyways, again, the Committee seeks
to achieve maximum employment and inflation. Uncertainty about the economic
outlook remains elevated. The Committee is a tentative to the
to both sides of its dual mandate, and judges that
downside risk to employment have risen. In support of its goals,
and in light of the shift in the balance of risk,
(19:09):
the Committee decided to lower the target FED funds rate
by a quarter point to between four to four and
a quarter percent 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 risk.
The Committee will continue to reduce its holdings of treasury
securities and agency debt and agency mortgage backed securities. The
(19:31):
Committee is strongly committed to supporting maximum employment and returning
inflation to its two percent objective and assessing the appropriate
stance of monetary policy. The Committee will continue to monitor
the implications of incoming information for the economic outloo. The
Committee would be prepared to adjust the stance of monetary
policy as appropriate if risk emerged that could impede the
(19:53):
attainment of the Committee's goals. The Committee's assessment will take
into account a wide range of information, including reading on
labor market conditions, inflation pressures and inflation expectations, and financial
and international develops developments. Okay, so begging nothing earth shattering there. Now,
I want to go to the next earth shattering part
of it. So many of you are aware that just
(20:15):
coincidentally yesterday, Stephen Moran, the former chairman of Council of
Economic Advisors under the Trump administration, got sworn in as
our new FED governor, a voting member of the Federal
Open Market Committee, And Jason, why don't you tell the
audience what mister Moran decided to do today against the
cohorts of the rest of the FED.
Speaker 2 (20:37):
I don't know. You tell me, I will. I'll stay
out of it.
Speaker 1 (20:40):
Yeah, okay, smart move. He wanted he dissented, that's the
bottom line. He dissented. He wanted a half a percent cut.
All the other eighteen members of the FED, no quarter percent.
He was the only one out of the entire group
that said I want a half a percent cut.
Speaker 2 (20:59):
Now that's what we talked.
Speaker 4 (21:00):
About, right, is you've got some politici size and again
it could be his opinion.
Speaker 2 (21:05):
Maybe it is. You've got some politicizing.
Speaker 3 (21:08):
The phone with him.
Speaker 1 (21:09):
I get right, Okay, this is what you're gonna do
when that vote comes around.
Speaker 3 (21:15):
You're not gonna want a quarter percent. You're going for
a half baby.
Speaker 4 (21:19):
And that's the hard part is you don't know who's
saying what from a job application standpoint, or you know,
their own sort of personal reasons. And again not to
say that the FED hasn't done that in the past,
but you know, it's starting to feel a little bit
more like that near term until we get to the
spring and we've got a new FED head and then
there you go.
Speaker 1 (21:39):
There you go, so exactly to your point. So this
was a good test in my opinion. Right, So, now
you have one of Trump's, you know, appointees confirmed by
the Senate, Steven Moran, now sitting on there, he goes
against the crowd, give me half a percent. I don't
want a quarter percent. We know that was you know,
he was told that by the President. There's no doubt
in my mind about that. Now, remember we had Lisa Cook,
(22:01):
which again that whole mortgage scandal situation. Remember yesterday the
court said nope, you get to keep your job for
a while. Okay, so she you know, she's well, I
won't go down that political path. But anyways, you get
my picture. The point is the more Trump, more people
that Trump can put on the Fed. And exactly to
your point. When May rolls around and Chairman Powell was
(22:22):
asked this, what are you gonna do? And May rolls around,
are you gonna stick around? He goes essentially no comment
because remember, folks, when Chairman Powell's term is up in May,
by law, he can move down to be one of
these voting members of the FED, just as a FED governor. Right,
he doesn't have to be the chairman. He is a
voting member now, but he can just when his term
is up. He'll just be like Stephn Moran or any
(22:44):
of these others that are out there now. Remember Steven Moran,
the one that was just confirmed, the one that wants
to have one and a half a percent cut. He's
only on the job till January. After January, they've got
to bring somebody else in, which you know is gonna
come from you know, obviously Trump ideas. So the point
is we could very quickly, Jay, by the time you know,
(23:04):
next year rolls around, we could see a lot of
Trump tentacles in the FED, which again many people don't want,
they want the FED to remain independent. So I think
this is something very interesting. We're going to have to
watch closely and see exactly, you know, what the Trump
influence is on the FED going forward. Because this was,
in my opinion, this was a really really good example
(23:24):
of it today.
Speaker 4 (23:25):
Yeah, and I mean again, it will like always with politics,
the opposite side always freaks out that everything is, you know,
the end of days, and so I tried it it.
You know, we've set ourselves up in a spot now
where this pendulum just continues to swing more and more
wildly from the left to the right, to the left
to the right, because they have such a narrow window
of time to get all these things implemented before midterms, right,
(23:48):
and so we're going to be hearing about midterms come
what January February, maybe much more that way. So it's
just like the same thing as always, just like Biden
did to like all these scared the snot out of conservatives, right,
like for the first year in change if I can't
believe they're doing this. And because they only have such
a narrow window of time, sometimes it would be nicer
(24:09):
to have it go across four years instead of what
feels like, you know, a year.
Speaker 2 (24:14):
So but it's that's the fun of politics.
Speaker 1 (24:17):
Indeed, all right, before we get to a Chirman Palace
highlights of his press conference, I told you we would
tell you what the odds are of our next interest
rate cut or cuts. So according to the CME Fedwatch tool,
right now, there's an eighty nine point nine percent probability
of at least a quarter percent rate cut at the
October twenty ninth meeting. That is an increase from seventy
(24:38):
eight point two percent just yesterday. Also, the odds of
even another rate cut of at least a quarter percent
at the December tenth meeting now standard eighty three point
nine percent, an increase from seventy two point eight percent yesterday.
So again, all the mathematics and everything behind assigning these
probabilities things are a little you know, key to use
(25:00):
your term right now, because you're just coming off of
all the comments and things from today's meeting. But those
are very strong odds, Jason, I mean to go out
that far and meaning December and already assigning a seventy
three percent probability, pretty good number there, And again things
are going to change either for the better or the
worse the closer we get. But I thought that was
really interesting that very strong odds have two more cats,
(25:22):
which is again what we've talked about that's kind of
baked into the cake by by investors at this point.
Speaker 2 (25:28):
Yeah, I mean, you know, fed's now what four and
a quarter four to foreign quarter to four and a quarter.
Speaker 4 (25:33):
Uh inflation is at what are we going to call it?
Two point six two point seven percent. Yeah. Part Bullard
was on this morning. He's a bit of a hot head,
but he was on. He said, you know, he thinks
terminal inflation sits somewhere around here, and that you know,
normally you're adding another seventy five basis points over that
(25:55):
to come to what the Fed typically views as its
neutral rate, which gets us to three in a quarter
three and a half. Right, So that sort of says
another two cuts maybe three over the next six to
nine months, and then we decide where the heck things
are from there.
Speaker 1 (26:11):
Absolutely, all right, let's real quickly before we go to break,
let's hit the highlights of the chairman's comments at the
press conference. Again, he reiterated what we touched on the
prior segment, which again there was not a lot of
a large consensus of wanting a half a percent, right,
you had one guy.
Speaker 3 (26:29):
Let's see.
Speaker 1 (26:29):
He pointed out that labor market again is showing signs
of weakening. The job gains have slowed, unemployments edged up downside,
risk to employment have risen. Touched on that. On inflation,
he says it's still elevated. Some of the recent price
pressures from tariffs and trade policies, which could either one
of those cause a one time shift in price levels
or prove more persistent. He starts to the Fed's commitment
to dual mandate, which is again maximum employment, stable prices.
Speaker 3 (26:52):
When asked about.
Speaker 1 (26:53):
Political pressure external influences, Pole reaffirmed the Fed's independence. He
also is note where the point is the FED is
cutting its workforce by ten percent, staffing down to roughly
what it was a decade ago.
Speaker 3 (27:06):
So I thought that was interesting. I needed to out.
Speaker 1 (27:08):
I didn't get a chance, but I want to see
how many people are employed by the FED. I'm gonna
guess probably between a thousand to two thousand. I think
last time that i'd look, so, you know, ten percent.
But I thought was interesting. Is and he wasn't too happy.
He wasn't too happy when that point was brought up.
He's like, yeah, we're going back to staffing levels we
were at ten years ago. So and I thought to myself,
(27:29):
is AI taking some of the FED positions, some of
those economists and PhDs that are there?
Speaker 4 (27:33):
So only time was Perplexity says as of twenty twenty five,
the Federal Reserve employees just under twenty four thousand people, A.
Speaker 3 (27:41):
Twenty four thousand. Yeah, you gotta be kidding me.
Speaker 4 (27:44):
Bored in Washington, DC twelve reserve banks up. Uh, they
want to bring it down by ten percent, which would
get you to twenty two thousand.
Speaker 3 (27:53):
So isn't that wow? Wow? From that one, that's a lot.
Maybe I'm thinking just a yeah. Directly the series, I
would have not guess that either.
Speaker 1 (28:00):
Yeah, yeah, twenty four Holy, no wonder, Chairman's palk. Can
you imagine if we had twenty four thousand people working
for you and I and feeding us dad and everything.
I mean, no wonder. The man's so smart, right, he's
got a lot of people behind him.
Speaker 3 (28:12):
My goodness.
Speaker 1 (28:14):
All right, we'll come back. We're not gonna have times
to get to what this means for you. We'll probably
touch on it on Friday's show, what this fed cup means,
because they'll give us a chance to kind of look
at things a little bit further, because I think it's
more important. I want to go through a couple comments
that the Chairman also made, and you get y'all thinking
a little bit about again, what's on the mind of
the chairman. So we'll wrap up the fed interest straight decision.
But first let's wrap it up in the right now
(28:35):
traffic center with a wonderful Kristen's no Hello, my dear,
Welcome back to the John Sanchez Show on News Talk
seven to eighty k which as reminder, if you missing
any of our shows, please pick up our podcast. Some
breaking news for you. For those of you that are
Jimmy Kimmel fans, listen closely. Jimmy Kimmel Live. ABC just
announced a few moments ago, it's hitting all the news
(28:55):
wires right now that they are pulling the Jimmy Kimmel
Live Show off the air in definitely after controversial comments
made by its host about the slain conservative activist Charlie Kirk.
ABC says the following Jimmy Kimmel Alive will be pre
empted indefinitely. I dig a little bit further. I was
doing that during the break. It looks like the Federal
Communication Commission the FCC, their chair, threatened to take action
(29:18):
against Disney and ABC over the comments. So yeah, for
those of you that are fans, it looks like he's
off the air. Another person, I don't know. I'm just amazed, Jason,
how many people have lost their jobs and so on
and so forth in that whole tragic situation. It's just
like every day you hear some major celebrity or podcast
(29:41):
or radio host or TV host or something losing their jobs.
Speaker 3 (29:44):
I've never seen something like this just yeah.
Speaker 4 (29:47):
I mean it goes to a lot of things, right,
you know, I think there's also a sense of just
in general, regardless of who it is, what it's about, politically,
et cetera, Like you need to be you need to
do your best to not things that are insensitive.
Speaker 2 (30:02):
I don't care what church you bow to.
Speaker 4 (30:05):
It's just a matter of you know, if you said
something that was you know, insensitive to a family of
someone who'd been killed. On either side of the spectrum,
I think it makes sense, like we can't just say
stupid stuff just in the air cover of freedom of speech. Right,
there's also what you're saying and how it affects other
(30:25):
people that you don't have the freedom to you know,
destroy someone else or make them feel terrible.
Speaker 2 (30:32):
Right in regardless, again, with whatever thing you bow to.
Speaker 4 (30:35):
Again, I don't know what Jimmy Kimil said, but I've
heard some crazy stuff on that, and you know, on
all kinds it unfortunately is surprising that people say this
stupid stuff they say under the air.
Speaker 1 (30:46):
I mean, yeah, but all right, very good, all right,
I just want to bring everybody up to date on that. Actually,
I'm going to reiterate what I or retract what I
said before the break. I want to get these seven
ways this quarter percent can affect all of you.
Speaker 3 (30:59):
That's really important.
Speaker 1 (31:00):
Go through them very quickly, and then time permitting, will
just hit some of the comments.
Speaker 3 (31:04):
By the chairman.
Speaker 1 (31:05):
So what Jason and I put together is this all right,
number one, how can this quarter percent kind of impact you?
As we discussed on the show yesterday, lower mortgage rates, right,
that's the hope, But we saw the opposite happen refinancing opportunities.
We discussed that yesterday. We saw a huge surge from
the Mortgage Bankers Association today and refi activity for the
previous week. So again, mortgage rates shot up. If they
(31:26):
go up, I'll scratched what I just said of these
last two points. But if they go down, yeah, that
could be a good thing for refinancing credit card and
loan cost Well maybe if you got a variable rate debt,
you're going to see a little a little bit of
reduction there. Obviously, historically, interest straight cuts are good for
the equity markets, saving accounts and CDs.
Speaker 3 (31:46):
We've been cautioning you on this one.
Speaker 1 (31:47):
Hopefully you locked in your one year CDs a month
or two ago, because most likely you're gonna see yields drop.
That's going to hurt your savings. Money, job marketing, business expansion,
that's right. Cheap capital means maybe people are going to
be higher. But again, Chairman touched on the kind of
stagnant jobs market at this point, and then inflation are
purchasing power right. Cut could reignite some inflationary pressures keep
(32:10):
cost higher for longer. I mean, the chairman, Jason, It's
just every time I hear this, like, oh, the consumer's
in great shape right now, I'm like, man, everybody I
talked to you just they're just making it hand to
fist right now or hand of mouth right. I can't
afford a grocery. I can't afford this. I can't afford that.
But the data says, oh, you are doing just fine.
So that one always gets me as far as you
(32:31):
know that comment goes. But but we will see any
final points.
Speaker 4 (32:36):
No, I just again, I think we're gonna see the
byproduct of the FED move and market will digest it
over the next couple of days exactly.
Speaker 1 (32:43):
Remember, folks, markets before looking indicator looking six to eight
months out. So if we get two more cuts, you're
already pricing it in. All right, Thank you all for
joining us. We'll do it again to more on The
John Sanchez Show. God Bless, have a great afternoon. John
Sanchez is a registered investment advisor, and the opinions expressed
by Sanchez Gone Capital Management, LLC on this show or
their own and do not reflect the opinions of News
(33:04):
Talks seven eighty or its pairing company, Cumulus Media. All
statements and opinions expressed are based upon information considered reliable,
although it should not be relied upon. As such, Any
statements or opinions are subject to change without notice. Information
presented is for educational purposes only and does not intend
to make an offer or solicitation for the sale or
(33:24):
purchase of any specific securities, investments, or investment strategies. Investments
involve risk, and, unless otherwise stated orre not guaranteed.
Speaker 3 (33:33):
Information expressed does not take into account your.
Speaker 1 (33:36):
Specific situation or objectives, and is not intended as recommendations
appropriate for any individual. Listeners are encouraged to seek advice
from a qualified tax, legal, or investment advisor to determine
whether any information presented may be suitable for their specific situation.
Past performance is not indicative of future performance.
All right, look around number two, welcome to the John
Sanchez Show on News Talk seven eighty k which that's
how pol leisure to be with you on this Fed
interest right day, and of course how paulasure to be
with my partner Jason KHT.
Speaker 3 (00:11):
That's kind of part for the day. Jason.
Speaker 2 (00:13):
We think the show was going to go fast before
wait till now?
Speaker 3 (00:16):
Yeah, no, kiddy, isn't that the truth? My goodness? How
are you? My friend?
Speaker 4 (00:19):
A good good I'll get the duct tape out next
time and we should be all.
Speaker 3 (00:24):
There you go, there you go, the bubble going with
the duct tape. I like it. I like it?
Speaker 1 (00:30):
All right, everybody, Well, we got the technical bugs behind us.
Let's get down to business because we have a lot
of things to talk to you about. Well, today we
receive the FED interest rate decision, which of course is
followed by the ever so important UH press conference by
Fed shair Jerome Powell. What are we going to do today, Well,
we're going to talk about, of course, with the Fed
decided to do with interest rates. What hints they may
(00:52):
have given us regarding the direction of interest rates? Do
we have more cuts ahead of us? Do we not
have more cuts?
Speaker 3 (00:58):
Ahead of us. What was the the vote?
Speaker 1 (01:00):
And remember, folks, as I said on the show yesterday,
this was the meeting that we have where we get
the Summary of Economic conditions, better known as the dot plot.
This is where all those FED members get to vote
on their own or not vote, but write down on
a piece of paper where they think interest rates are
going to going. And I think, Jason, we're going to
get to this, so don't let the cat out of
the bag.
Speaker 3 (01:20):
But I think this was.
Speaker 1 (01:21):
Probably one of the biggest, you know, market moving events
when when the news came out as far as how
all these different members voted, it was a bit of
a surprise to the street. I think, is again we're
going to go through the details on.
Speaker 4 (01:35):
Yeah, and the street was poised for some you know,
a couple folks that were you know, maybe in disagreement.
Speaker 3 (01:44):
And some dissentership.
Speaker 2 (01:46):
I would say.
Speaker 4 (01:46):
Dissenters and we'll call them, uh, you know Trump candidates
for FED.
Speaker 2 (01:53):
Board member president.
Speaker 4 (01:54):
Right, So people who there's definitely a lot of I
would say, uh, what's the term you applying for the job?
Going on constantly from the Rick readers or the David
Zervos or Waller or you know, sort of saying what
you think he wants to hear. Right as well, But
like you said in in the dot plot we'll get
(02:15):
into later, there's more than just two that are making
odd comments or things that you wouldn't normally expect at
this point in the cycle. And I think it highlights
again Up, I'm gonna say it. People will disagree with me.
I actually like Powell. I think that he's done a
good job for all of the madness he's been dealing
with politics aside.
Speaker 2 (02:35):
Right, But.
Speaker 4 (02:37):
You've got a point now that shows, especially with what
you'll get into later, everything is confusing. The tea leaves
couldn't be any more jumbled and smashed, and you're confused
to honestly, And that's part of it, right, And I
would say, much like anything when we do our portfolios, right,
the making a change for the sake of change is
(02:59):
not never a good idea. Like the number of times
I can remember in my past where I made a
decision on a trade merely because of I haven't made
a decision lately, tends to backfire. And so in this case,
if it's not broke, don't fix it. Not saying it's
not broken I'm not saying that they're not trying to
fix it, but sometimes waiting until you have some sort
(03:20):
of direction could be helpful.
Speaker 2 (03:23):
And that's part of what.
Speaker 4 (03:24):
We're seeing now is they're all really confused because there's
a confluence of different things going on that will probably
never have to deal with. Something is extreme again, like
are these job losses in the sake of companies that
are slowing down or is it maybe we have this
whole brand new thing called artificial intelligence that may take
over bazillions of jobs or change jobs. If you're the Fed,
(03:45):
you don't know, right, And they said that cut rates
because of X, Y and Z.
Speaker 1 (03:50):
It's and pal through in along those lines is we'll
get to immigration.
Speaker 3 (03:53):
He's saying, look at it. We've got this problem.
Speaker 1 (03:56):
There's a bunch of people getting kicked out of this
country and that's affecting the jobs market, which is impacting
the Fed's confusion.
Speaker 4 (04:02):
Yep, it is, and it's going to be tough for
a long time, right, because you don't know how much
of the job changes are economical, or more so just
companies that aren't sure same thing. They don't have much
clarity on what are tariff's going to do do we
need to hire more people? Are lower interest rates going
to help? Are they gonna hurt?
Speaker 2 (04:21):
It is?
Speaker 4 (04:21):
It is not a a and these are first world problems.
I'd say they're good things, right, lower interest rates. The
economy is doing fine, you know, it's not like we're
in a death spiral of terrible results. And yes the
jobs are decelerating, but we're not negative two hundred thousand
jobs or something.
Speaker 2 (04:38):
It's just less good.
Speaker 3 (04:40):
Twenty two months, right, right, But four.
Speaker 4 (04:42):
Point yeah, yeah again, but four point three percent unemployment
overall again, believe what you want, but that's historically not
a terrible number. And the economy is you know, GDP
is still very good.
Speaker 2 (04:54):
Like it's not.
Speaker 4 (04:56):
I'd rather be in this situation than the oh gosh,
things are really.
Speaker 2 (04:59):
Really really terrible in what do we do now? We
were analysis paralysis?
Speaker 3 (05:03):
So absolutely all right.
Speaker 1 (05:05):
So, as you can tell, there are a lot of
things that came out of the press conference as well
as the FED actual decision. So our goal tonight, of course,
or this afternoon, is to go through all of this
with you again.
Speaker 3 (05:15):
We're gonna we're gonna make it all make sense to you.
Speaker 1 (05:17):
I promise we're gonna be bopping around right now, but
we're gonna do We're gonna summarize what happened in the
FED interest rate decision for you, We'll summarize what happened
in the UH power press conference, and then hopefully time permitting.
I really want to get into the most important thing
is or which is how this can impact all of
your lives. Right, we got a twenty five basis point
cut today.
Speaker 3 (05:37):
Right, we all knew this.
Speaker 1 (05:38):
We've told you it was gonna happen. It did happen,
you got it. But most importantly, how is this going
to impact you? Both, you know, for the positive and
the negative. Yesterday on the show with Corey and Dewright,
we talked about how a quarter percent cut could affect
you as far as your real estate holdings and investments
and so on and so forth. Now we're gonna kind
of look at your overall life so you know you're
there again, You're our most important thing. This was not
(05:59):
a surprise, As I've said, I can't tell you how
many countless times on the show or on my stock
updates in the morning.
Speaker 3 (06:05):
Look at this is this was baked into the cake.
Speaker 1 (06:07):
And boy, I tell you, Jason, this would have been
a disaster had the FED not done anything, or a
disaster had they given us a half a percent cut.
So this was a good number, even though the market
was kind of disappointed. So let's start with the market
action today, and then we're gonna go into like I said,
the summary of the meeting, Summary of of Jerome Palace
(06:27):
Press conference, et cetera. Because this was the interesting side. Now,
we said leading up into this meeting, and we hit
it on the on the the mortgage side, that a
lot of times you can't get you can get a
negative reaction to the mortgages, you know when the FED
catch rates. And today you know, just exactly that. And
unfortunately Dwight just got a hold of me right before
(06:50):
the show and he's unfortunately tied up in a meeting,
but he can't join us. But he's like, John, we
got to talk about this, and he's right, Jason, the thirty.
Speaker 3 (06:57):
Year mortgage, you know, with a quarter percent, and this
is what we weren't about.
Speaker 1 (07:01):
With a quarter percent cut, thirty year mortgage, according to
Mortgage News Daily, shot up nine bases points right to
six point two two percent. So once again it's the
opposite of what YEP but everybody was talking about, so
that one came true as far as our prediction is concerned.
But let's get down to the market reaction today, because
we had a we had a really solid day to day.
(07:21):
We're up, you know, about three point fifty four hundred
right around there when the press cars or when the
interest right decision came out, and then we we began
to weaken a bit, and folks, we barely had a
gain on the Dow. I think at our worst level,
right in the middle of a Jerome Pal speech, we
were only up like eight nine points on the Dow.
The NASDAQA went negative, SMP went negative, clawed our way
(07:43):
back a little bit. It wasn't all that bad of
a day. We finished with a gain of two sixty
on the Dow point five to seven percent, but the
Nasdaq last seventy three.
Speaker 3 (07:50):
The SMP gave up six.
Speaker 1 (07:51):
So once again, the market did not get the reaction
or give the reaction like a lot of people thought
they would when we finally get this interest straight cut
that everybody's been talking about. Remember, folks, this is the
first intro straight cut going back to twenty twenty four.
So when we come back only to turn over to Jason.
He'll do his market recap as he does so eloquently.
Then we're going to get into again what was the
uh the chairman talking about in his press conference? What
(08:13):
did this statement say? And then again, how's this going
to impact your life? So a lot of things will
be bringing you sit back and relaxes. Turn it over
to Kristen snow in the right now traffic center. Hello,
my dear, welcome back to the John Sanchez Show on
Newstalk seven eighty koh al right, here's how we finished
up in this volatile session today, a two sixty gain
on the dial point five to seven percent to a
(08:35):
close of forty six thy eighteen. Nazek lost seventy three
point thirty three percent, closing at twenty two thousand and
two sixty one, and the SMP lowered by six points
a fraction loss there right at the sixty six hundred mark.
But where the action was, of course, the bond market.
But before that, let me tell you what oil did.
We had a fifty cent loss at sixty four h
three A barrel gold gave back seven dollars and thirty
(08:55):
cents three thy seven eighteen an ounce and Jason, back
to what we were saying with the thirty year mortgage,
the bond market obviously rose, as we are indicative by
what those mortgage rates did. Seven basis point increase on
the ten year treasury to a yield a three point
six y five. That was the biggest excuse me, five
basis point increase to yield a four h eight apartning
(09:16):
so five basis point increase four oh eight. But the
five year where my eyes were looking, seven basis point
increase there. The three year was up six basis points,
the two year was up four basis points, the thirty
year up three. So run across all the major maturities,
we have bond yields rise on a day or the
Fed cuts interest rates.
Speaker 4 (09:33):
Yeah, And I mean this is what we stressed folks
all the time, is the market is already pricing in expectations.
Speaker 2 (09:40):
Right.
Speaker 4 (09:40):
So anytime when someone says, oh, hey, the Fed's gonna
cut rates tomorrow, we should go do something. Unless you
think they're not going to do what's consensus, then don't
do anything. And the reason that the long end of
the curve rose today again we'll get into it a
little bit, is there's some confusion as far as the
members as to what forward rates look like from here.
(10:04):
And that is why even though the FED and I
was in a meeting with a client during the conversation
when the Fed cut rates, and I said, take a
look at this. Here's a perfect example. The FED just
cut interest rates by twenty five basis points today, and
you look up and down the curve, it's either down
a bit or two or up a bit of two.
You know, like, you're not going to see it drop
twenty five basis points today unless they cut by fifty,
(10:26):
because that would have been a shock. The market is
already priced and where the Fed is going, and so
by the long end of the curve steepening a little bit,
this is just implying the probability of lower rates in
the future, maybe less than what people had originally thought
coming into too the meeting today.
Speaker 2 (10:40):
And that's a lot of why you didn't.
Speaker 4 (10:43):
See what you thought you'd see, because a it's already
priced in and b the long end moving up a
bit just shows that maybe the market's a little too
excitable about the next couple months of where interest rates
are going.
Speaker 1 (10:55):
Absolutely mean, we'll get into with those what those odds
are here throughout the show. All right, So let's go
into some of the intricacies of the FED decision and
the press conference again. So a couple more things before
we start really rolling up our slaves and getting deep here.
So the other thing that happened, So, like I said earlier,
we had the dot plot meeting. Right, this is where
(11:16):
again the FED members get to, you know, on their
own opinion.
Speaker 3 (11:19):
Right.
Speaker 1 (11:19):
This isn't a consensus opinion of the nineteen members of
the FED. This is their own individual opinion where they
think things are going to go as far as interest
rates are concerned. But here's what's interesting, folks. Nine out
of the nineteen voting members of the FED, the policymakers,
they expect just one more rate cut this year. Okay,
so nine out of nineteen one more rate cut this year. Now, remember,
(11:42):
as I've been saying on the show leading up to today,
the Street was very confident that we are going to
get two more cuts this year October and December. So
now you've only got nine out of nineteen personally who
think that we're going to get you know, just one
more rate cut. Ten see more two or more rate
cuts this year? Ten out of the nineteen two or
more rate cuts. So very unclear at this point who's
(12:06):
going to win, right, the ten or the nine members.
So again, this doesn't mean how they're going to vote.
This is how they feel at this particular time, and
that's one of the reasons we got the confusion. Now,
the other side of it is we also had some
projections from the FED members in regards to twenty twenty
five GDP expectations the growth of the economy. They are
(12:27):
expecting the growth to be somewhere between one point four
percent and one point seven. That is up from previous
forecast of one point two and one point five. Okay,
so let's stop there, then we'll go to PC. What's
important about that? Well, once again, previous projection are now
new projection one point four to and one point seven
for the growth from one point two and one point five. Again,
(12:50):
the importance of that. Now you've got a lot of
the FED members saying, wait a minute, GDP is going
to grow, meaning the economy is going to grow, So
should we really be in an just straight cutting environment?
Speaker 3 (13:01):
Right? So may comments you want to make on that one.
Speaker 4 (13:04):
No, I mean again, it's just a lot of you
know concern you've got different member there's all these FED
members too, because remember they're in different places in the country,
that's right, and that is important as well. What someone's
seen in Boston could be different than what someone's seen
in San Francisco versus texts like. There's just difference of
opinions depending on regionally where you are as well too,
So that plays into some of it as well. Right
(13:27):
side of the political part is what they're actually seeing.
Boots on the ground, Bayse book will be important too
to see, yeah, a little bit.
Speaker 3 (13:34):
And that's the survey of the twelve ed districts.
Speaker 1 (13:37):
Now, another part of this confusing again, as we've been saying,
is the PCEE inflation, right, the personal consumption expenditures it's
called that's the Fed's favorite measure of inflation over CPI, PPI,
et cetera. So they got to kind of give their
opinions on this one also. Now pc inflation they're saying
(13:58):
consensus is to be between two point nine and three
percent for the year. Previous forecasts have called for two
point eight and three point two percent, so a little
bit of a of a downturn there again, nothing real major,
but the most important takeaway is, yeah, once again they're
looking for GDP to increase a little bit, which is
calls for you know, not cutting interest rates at that
(14:19):
point if that comes true. And most importantly again you
got the the members there talking about someone the cut
win cut this year and some saying, you know, we
want to so the bottom line and again back to
your point you set the opening of the show, Jason,
you know, we love Chairman Powell. He's done a hell
of a job. There is no doubt about that. And
(14:40):
he said over and over and over again throughout the
press conference, look at we don't know, right, we don't
know where things are going. We don't know where the
economy is going. We don't know what we're gonna do
as far as interest rates, because there's so many moving parts.
You've got the tariffs, you've got the immigration issue. You
have a lot of moving parts, and you know, essentially
he said, look, we don't really know better than any
nobody else, which I don't believe that, but they're.
Speaker 3 (15:02):
Still you know, very very concerned. You know.
Speaker 1 (15:05):
From that, we also had the Feds, the Atlanta Fed's
forecast for third quarter GDP.
Speaker 3 (15:09):
They lowered it from three point four down to three
point three percent. So you know what, who do you
believe on that? Right?
Speaker 2 (15:16):
It's impossible to tell.
Speaker 3 (15:18):
It really is it really is.
Speaker 1 (15:19):
So let's summarize the release of the Fed decision.
Speaker 3 (15:24):
So a couple things.
Speaker 1 (15:25):
Again, quarter percent cut that brings that target range down
to between four to four and a quarter percent. Remember, folks,
this is the FED funds rate. This is the rate
that banks charge one another. Okay, As I said earlier,
this is the first rate cut that we've received since
December of twenty twenty four. Lots of talk throughout the
(15:46):
press conference in regards to the labor market. The Committee
emphasized in their release the risk to employment have increased,
meaning the downside risk to employment have risen. Chairman Palace said,
look at we got a problem. You know, jobs numbers
are coming down. We know that exactly to Jason's point.
Is it due to AI, is it due to immigration
(16:06):
or is it a combination? But he said, we're not
seeing layoffs. Hence why as Jason said that unemployment rates
a holding steady, but we're not seeing new hires. And
he went on to talk a lot about what a
challenging an environment it is for new college graduates. And
you know, you and I have talked about this, Jason,
new college graduates in most cases and I'm talking bachelors,
(16:26):
not to advanced degrees, they're coming out, they take the
entry level jobs. Once again, these entry level jobs, many
of them are they're now no longer there because of AI.
AI is doing those jobs. So it is a challenging
market for these new graduates. And again the Chairman talked
about that inflations stile well above the fed's two percent target,
still a concern. And then again the Fed this was interesting.
(16:49):
The FED continue to reduce their holdings of the treasury securities,
the agency debt, the agency mortgage backed securities, et cetera
under the balance sheet policy. So y'all remember from when
the financial crisis and so on and so forth, they
Fed balance sheet.
Speaker 3 (17:02):
You know, they own a bunch of treasuries mortgage backed securities.
Speaker 1 (17:05):
So they're going to continue to reduce those holdings, which
is not favorable for mortgage rates overall.
Speaker 3 (17:11):
And then we won't get into that.
Speaker 1 (17:12):
So and then finally deciding a further rate adjustments, they're
going to watch the incoming data. As we knew they
were going to say, they're going to look at the outlooks, monitor,
the balance of risk and full employment, and you know
they're dual mandate, et cetera. So those are the key
takeaways from the Fed decision. Now when we come back,
we'll talk about some of the highlights from Chairman Powell's
press conference and then try to get in real quickly
(17:35):
how this is going to affect your life.
Speaker 3 (17:36):
Anything you want to wrap up on that.
Speaker 2 (17:37):
No, I think that's spot on lot right, beautiful coming.
Speaker 1 (17:41):
You got it all right, turned over to Jack Saban,
He's got news, traffic, and weather.
Speaker 3 (17:45):
Hey, Jack, welcome back to.
Speaker 1 (17:48):
The John Sanchez Show on Newstalk seven eighty kh Alright,
Fed interest right decision day. We're making our way through
some of the highlights of the session. Let's once again
recap you on what the market did. Two sixty gain
on the Dow, last seventy three on the Nasdaq, in
lower by just six on the S and ps. Just
check the futures looking pretty good though up roughlyer around
seventy or so on the dout side of things. So
Nasac's up about sixty five, So things look like they're
(18:11):
calming down, which is very typical. Gives the street a
chance to digest everything the chairman had to say in
the committee, et cetera. All right, let me, Jason take
a second here. This wasn't kind of on our agenda,
but I want to do this real quick. Let me
read the press release from the Federal Reserve telling us
what they did. So recent indicators suggests the growth of
economic activity moderated in the first half of this year.
(18:34):
Job gains have slowed, and the unemployment rate has edged
up but remains low. Inflation has moved up and remains
somewhat elevated. But you stop right there, Jason, you're going, huh,
I don't know about a FED cut or not. Y.
Speaker 3 (18:47):
Not the most rosy way to.
Speaker 1 (18:48):
Start a press release, but anyways, again, the Committee seeks
to achieve maximum employment and inflation. Uncertainty about the economic
outlook remains elevated. The Committee is a tentative to the
to both sides of its dual mandate, and judges that
downside risk to employment have risen. In support of its goals,
and in light of the shift in the balance of risk,
(19:09):
the Committee decided to lower the target FED funds rate
by a quarter point to between four to four and
a quarter percent 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 risk.
The Committee will continue to reduce its holdings of treasury
securities and agency debt and agency mortgage backed securities. The
(19:31):
Committee is strongly committed to supporting maximum employment and returning
inflation to its two percent objective and assessing the appropriate
stance of monetary policy. The Committee will continue to monitor
the implications of incoming information for the economic outloo. The
Committee would be prepared to adjust the stance of monetary
policy as appropriate if risk emerged that could impede the
(19:53):
attainment of the Committee's goals. The Committee's assessment will take
into account a wide range of information, including reading on
labor market conditions, inflation pressures and inflation expectations, and financial
and international develops developments. Okay, so begging nothing earth shattering there. Now,
I want to go to the next earth shattering part
of it. So many of you are aware that just
(20:15):
coincidentally yesterday, Stephen Moran, the former chairman of Council of
Economic Advisors under the Trump administration, got sworn in as
our new FED governor, a voting member of the Federal
Open Market Committee, And Jason, why don't you tell the
audience what mister Moran decided to do today against the
cohorts of the rest of the FED.
Speaker 2 (20:37):
I don't know. You tell me, I will. I'll stay
out of it.
Speaker 1 (20:40):
Yeah, okay, smart move. He wanted he dissented, that's the
bottom line. He dissented. He wanted a half a percent cut.
All the other eighteen members of the FED, no quarter percent.
He was the only one out of the entire group
that said I want a half a percent cut.
Speaker 2 (20:59):
Now that's what we talked.
Speaker 4 (21:00):
About, right, is you've got some politici size and again
it could be his opinion.
Speaker 2 (21:05):
Maybe it is. You've got some politicizing.
Speaker 3 (21:08):
The phone with him.
Speaker 1 (21:09):
I get right, Okay, this is what you're gonna do
when that vote comes around.
Speaker 3 (21:15):
You're not gonna want a quarter percent. You're going for
a half baby.
Speaker 4 (21:19):
And that's the hard part is you don't know who's
saying what from a job application standpoint, or you know,
their own sort of personal reasons. And again not to
say that the FED hasn't done that in the past,
but you know, it's starting to feel a little bit
more like that near term until we get to the
spring and we've got a new FED head and then
there you go.
Speaker 1 (21:39):
There you go, so exactly to your point. So this
was a good test in my opinion. Right, So, now
you have one of Trump's, you know, appointees confirmed by
the Senate, Steven Moran, now sitting on there, he goes
against the crowd, give me half a percent. I don't
want a quarter percent. We know that was you know,
he was told that by the President. There's no doubt
in my mind about that. Now, remember we had Lisa Cook,
(22:01):
which again that whole mortgage scandal situation. Remember yesterday the
court said nope, you get to keep your job for
a while. Okay, so she you know, she's well, I
won't go down that political path. But anyways, you get
my picture. The point is the more Trump, more people
that Trump can put on the Fed. And exactly to
your point. When May rolls around and Chairman Powell was
(22:22):
asked this, what are you gonna do? And May rolls around,
are you gonna stick around? He goes essentially no comment
because remember, folks, when Chairman Powell's term is up in May,
by law, he can move down to be one of
these voting members of the FED, just as a FED governor. Right,
he doesn't have to be the chairman. He is a
voting member now, but he can just when his term
is up. He'll just be like Stephn Moran or any
(22:44):
of these others that are out there now. Remember Steven Moran,
the one that was just confirmed, the one that wants
to have one and a half a percent cut. He's
only on the job till January. After January, they've got
to bring somebody else in, which you know is gonna
come from you know, obviously Trump ideas. So the point
is we could very quickly, Jay, by the time you know,
(23:04):
next year rolls around, we could see a lot of
Trump tentacles in the FED, which again many people don't want,
they want the FED to remain independent. So I think
this is something very interesting. We're going to have to
watch closely and see exactly, you know, what the Trump
influence is on the FED going forward. Because this was,
in my opinion, this was a really really good example
(23:24):
of it today.
Speaker 4 (23:25):
Yeah, and I mean again, it will like always with politics,
the opposite side always freaks out that everything is, you know,
the end of days, and so I tried it it.
You know, we've set ourselves up in a spot now
where this pendulum just continues to swing more and more
wildly from the left to the right, to the left
to the right, because they have such a narrow window
of time to get all these things implemented before midterms, right,
(23:48):
and so we're going to be hearing about midterms come
what January February, maybe much more that way. So it's
just like the same thing as always, just like Biden
did to like all these scared the snot out of conservatives, right,
like for the first year in change if I can't
believe they're doing this. And because they only have such
a narrow window of time, sometimes it would be nicer
(24:09):
to have it go across four years instead of what
feels like, you know, a year.
Speaker 2 (24:14):
So but it's that's the fun of politics.
Speaker 1 (24:17):
Indeed, all right, before we get to a Chirman Palace
highlights of his press conference, I told you we would
tell you what the odds are of our next interest
rate cut or cuts. So according to the CME Fedwatch tool,
right now, there's an eighty nine point nine percent probability
of at least a quarter percent rate cut at the
October twenty ninth meeting. That is an increase from seventy
(24:38):
eight point two percent just yesterday. Also, the odds of
even another rate cut of at least a quarter percent
at the December tenth meeting now standard eighty three point
nine percent, an increase from seventy two point eight percent yesterday.
So again, all the mathematics and everything behind assigning these
probabilities things are a little you know, key to use
(25:00):
your term right now, because you're just coming off of
all the comments and things from today's meeting. But those
are very strong odds, Jason, I mean to go out
that far and meaning December and already assigning a seventy
three percent probability, pretty good number there, And again things
are going to change either for the better or the
worse the closer we get. But I thought that was
really interesting that very strong odds have two more cats,
(25:22):
which is again what we've talked about that's kind of
baked into the cake by by investors at this point.
Speaker 2 (25:28):
Yeah, I mean, you know, fed's now what four and
a quarter four to foreign quarter to four and a quarter.
Speaker 4 (25:33):
Uh inflation is at what are we going to call it?
Two point six two point seven percent. Yeah. Part Bullard
was on this morning. He's a bit of a hot head,
but he was on. He said, you know, he thinks
terminal inflation sits somewhere around here, and that you know,
normally you're adding another seventy five basis points over that
(25:55):
to come to what the Fed typically views as its
neutral rate, which gets us to three in a quarter
three and a half. Right, So that sort of says
another two cuts maybe three over the next six to
nine months, and then we decide where the heck things
are from there.
Speaker 1 (26:11):
Absolutely, all right, let's real quickly before we go to break,
let's hit the highlights of the chairman's comments at the
press conference. Again, he reiterated what we touched on the
prior segment, which again there was not a lot of
a large consensus of wanting a half a percent, right,
you had one guy.
Speaker 3 (26:29):
Let's see.
Speaker 1 (26:29):
He pointed out that labor market again is showing signs
of weakening. The job gains have slowed, unemployments edged up downside,
risk to employment have risen. Touched on that. On inflation,
he says it's still elevated. Some of the recent price
pressures from tariffs and trade policies, which could either one
of those cause a one time shift in price levels
or prove more persistent. He starts to the Fed's commitment
to dual mandate, which is again maximum employment, stable prices.
Speaker 3 (26:52):
When asked about.
Speaker 1 (26:53):
Political pressure external influences, Pole reaffirmed the Fed's independence. He
also is note where the point is the FED is
cutting its workforce by ten percent, staffing down to roughly
what it was a decade ago.
Speaker 3 (27:06):
So I thought that was interesting. I needed to out.
Speaker 1 (27:08):
I didn't get a chance, but I want to see
how many people are employed by the FED. I'm gonna
guess probably between a thousand to two thousand. I think
last time that i'd look, so, you know, ten percent.
But I thought was interesting. Is and he wasn't too happy.
He wasn't too happy when that point was brought up.
He's like, yeah, we're going back to staffing levels we
were at ten years ago. So and I thought to myself,
(27:29):
is AI taking some of the FED positions, some of
those economists and PhDs that are there?
Speaker 4 (27:33):
So only time was Perplexity says as of twenty twenty five,
the Federal Reserve employees just under twenty four thousand people, A.
Speaker 3 (27:41):
Twenty four thousand. Yeah, you gotta be kidding me.
Speaker 4 (27:44):
Bored in Washington, DC twelve reserve banks up. Uh, they
want to bring it down by ten percent, which would
get you to twenty two thousand.
Speaker 3 (27:53):
So isn't that wow? Wow? From that one, that's a lot.
Maybe I'm thinking just a yeah. Directly the series, I
would have not guess that either.
Speaker 1 (28:00):
Yeah, yeah, twenty four Holy, no wonder, Chairman's palk. Can
you imagine if we had twenty four thousand people working
for you and I and feeding us dad and everything.
I mean, no wonder. The man's so smart, right, he's
got a lot of people behind him.
Speaker 3 (28:12):
My goodness.
Speaker 1 (28:14):
All right, we'll come back. We're not gonna have times
to get to what this means for you. We'll probably
touch on it on Friday's show, what this fed cup means,
because they'll give us a chance to kind of look
at things a little bit further, because I think it's
more important. I want to go through a couple comments
that the Chairman also made, and you get y'all thinking
a little bit about again, what's on the mind of
the chairman. So we'll wrap up the fed interest straight decision.
But first let's wrap it up in the right now
(28:35):
traffic center with a wonderful Kristen's no Hello, my dear,
Welcome back to the John Sanchez Show on News Talk
seven to eighty k which as reminder, if you missing
any of our shows, please pick up our podcast. Some
breaking news for you. For those of you that are
Jimmy Kimmel fans, listen closely. Jimmy Kimmel Live. ABC just
announced a few moments ago, it's hitting all the news
(28:55):
wires right now that they are pulling the Jimmy Kimmel
Live Show off the air in definitely after controversial comments
made by its host about the slain conservative activist Charlie Kirk.
ABC says the following Jimmy Kimmel Alive will be pre
empted indefinitely. I dig a little bit further. I was
doing that during the break. It looks like the Federal
Communication Commission the FCC, their chair, threatened to take action
(29:18):
against Disney and ABC over the comments. So yeah, for
those of you that are fans, it looks like he's
off the air. Another person, I don't know. I'm just amazed, Jason,
how many people have lost their jobs and so on
and so forth in that whole tragic situation. It's just
like every day you hear some major celebrity or podcast
(29:41):
or radio host or TV host or something losing their jobs.
Speaker 3 (29:44):
I've never seen something like this just yeah.
Speaker 4 (29:47):
I mean it goes to a lot of things, right,
you know, I think there's also a sense of just
in general, regardless of who it is, what it's about, politically,
et cetera, Like you need to be you need to
do your best to not things that are insensitive.
Speaker 2 (30:02):
I don't care what church you bow to.
Speaker 4 (30:05):
It's just a matter of you know, if you said
something that was you know, insensitive to a family of
someone who'd been killed. On either side of the spectrum,
I think it makes sense, like we can't just say
stupid stuff just in the air cover of freedom of speech. Right,
there's also what you're saying and how it affects other
(30:25):
people that you don't have the freedom to you know,
destroy someone else or make them feel terrible.
Speaker 2 (30:32):
Right in regardless, again, with whatever thing you bow to.
Speaker 4 (30:35):
Again, I don't know what Jimmy Kimil said, but I've
heard some crazy stuff on that, and you know, on
all kinds it unfortunately is surprising that people say this
stupid stuff they say under the air.
Speaker 1 (30:46):
I mean, yeah, but all right, very good, all right,
I just want to bring everybody up to date on that. Actually,
I'm going to reiterate what I or retract what I
said before the break. I want to get these seven
ways this quarter percent can affect all of you.
Speaker 3 (30:59):
That's really important.
Speaker 1 (31:00):
Go through them very quickly, and then time permitting, will
just hit some of the comments.
Speaker 3 (31:04):
By the chairman.
Speaker 1 (31:05):
So what Jason and I put together is this all right,
number one, how can this quarter percent kind of impact you?
As we discussed on the show yesterday, lower mortgage rates, right,
that's the hope, But we saw the opposite happen refinancing opportunities.
We discussed that yesterday. We saw a huge surge from
the Mortgage Bankers Association today and refi activity for the
previous week. So again, mortgage rates shot up. If they
(31:26):
go up, I'll scratched what I just said of these
last two points. But if they go down, yeah, that
could be a good thing for refinancing credit card and
loan cost Well maybe if you got a variable rate debt,
you're going to see a little a little bit of
reduction there. Obviously, historically, interest straight cuts are good for
the equity markets, saving accounts and CDs.
Speaker 3 (31:46):
We've been cautioning you on this one.
Speaker 1 (31:47):
Hopefully you locked in your one year CDs a month
or two ago, because most likely you're gonna see yields drop.
That's going to hurt your savings. Money, job marketing, business expansion,
that's right. Cheap capital means maybe people are going to
be higher. But again, Chairman touched on the kind of
stagnant jobs market at this point, and then inflation are
purchasing power right. Cut could reignite some inflationary pressures keep
(32:10):
cost higher for longer. I mean, the chairman, Jason, It's
just every time I hear this, like, oh, the consumer's
in great shape right now, I'm like, man, everybody I
talked to you just they're just making it hand to
fist right now or hand of mouth right. I can't
afford a grocery. I can't afford this. I can't afford that.
But the data says, oh, you are doing just fine.
So that one always gets me as far as you
(32:31):
know that comment goes. But but we will see any
final points.
Speaker 4 (32:36):
No, I just again, I think we're gonna see the
byproduct of the FED move and market will digest it
over the next couple of days exactly.
Speaker 1 (32:43):
Remember, folks, markets before looking indicator looking six to eight
months out. So if we get two more cuts, you're
already pricing it in. All right, Thank you all for
joining us. We'll do it again to more on The
John Sanchez Show. God Bless, have a great afternoon. John
Sanchez is a registered investment advisor, and the opinions expressed
by Sanchez Gone Capital Management, LLC on this show or
their own and do not reflect the opinions of News
(33:04):
Talks seven eighty or its pairing company, Cumulus Media. All
statements and opinions expressed are based upon information considered reliable,
although it should not be relied upon. As such, Any
statements or opinions are subject to change without notice. Information
presented is for educational purposes only and does not intend
to make an offer or solicitation for the sale or
(33:24):
purchase of any specific securities, investments, or investment strategies. Investments
involve risk, and, unless otherwise stated orre not guaranteed.
Speaker 3 (33:33):
Information expressed does not take into account your.
Speaker 1 (33:36):
Specific situation or objectives, and is not intended as recommendations
appropriate for any individual. Listeners are encouraged to seek advice
from a qualified tax, legal, or investment advisor to determine
whether any information presented may be suitable for their specific situation.
Past performance is not indicative of future performance.
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