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I I think what we have to do is focus on the reality what are they actually saying what are they actually doing and then make our investment conclusions based on that analysis and it seems to me that they are committed to raising the interest rate significantly at this meeting next week I do think they're going to come around and conclude that maybe just get it over with maybe a hundred basis points and sub instead of 75 basis points and then maybe one more hike after that I mean they know the monetary policy operates with a long lag on the economy but they've got a credibility problem and they're trying to get ahead of it so uh actually they're trying to catch up with the two-year treasury note which is saying that within the next 12 months or or a lot less will be at something like 3.8 percent Stephen I've got a couple of my colleagues here and santelli's a little older uh than Elise man but Rick can can you remember where both sides were so certain of and neither one is a good outcome a a an economy on the precipice of a of a recession and a Fed that needs to go one to two points at a time both of those they're so they're Polar Opposites I don't know if I need to say polar they're opposites if you remember the last time we had this sitch no it is a rather unique situation and what makes it even more unique is and I like what Ed said and he probably doesn't remember but in the 80s we saw a lot of this he was at Drexel I was at Drexel things have definitely come full circle but if you look at fed fund Futures right now the November 22 contract all the way to Feb 24 all of those are making new contract low prices as we speak 16 contracts okay so they're getting Paul's message loud and clear and his message is hard to argue with I I can't imagine he's going to go less than three quarters of a point but the problem is if Mr Sterling had it to some extent uh it's not housing he the FED certainly knows that they were gonna definitely throw grenades in the housing market I think about Eurozone inflation just released year-over-year CPI up 9.1 percent the pound at the lowest level since 85 the dollar very close to Fresh 20-year highs it's the global recession that somebody needs to pay attention to Joe because the United States is big enough that we're going to leverage the rest of the world down that used to say that's absolutely right I agree we've got to look at the global situation and Global situation and we have a developing Global recession I think the United States is not going to experience a bad result should I call it a rolling recession which means different sectors get hit at different times Steve um you're still in the I think at least recently you kind of think the the economy is yeah you know not great but but not ready to fall off a cliff so you're you're behind Jay Powell and and a couple more uh at least a couple more 75 basis point hikes could you change your mind in a data dependent way oh yeah totally I mean I think I think the 75 is okay here um you know I think I you know I followed the fed and try to communicate what I think they're thinking and what I think they're saying and I think they're saying they need to get to three and three quarters to four percent the market may be overdoing it just a touch here with the four and a half percent but look Joe this opposition to the FED is is perfectly fine as long as you come to the table with a different theory of inflation right so Barry yesterday talked about the idea that he thinks it's okay for the FED to stop at three to four percent of course we'd be great to have that conversation but we're not having that conversation yet we had core go up in the last one um and and and that different theory of inflation seems to take two parts one is that there's a lot to come down the pike here that has not been priced into the economy the other is that there's a lot of data out there already showing that inflation has come coming down I have some sympathy with that I also have a lot of sympathy with the idea that the FED may be the last to know what's going on in the economy given their uh uh you know uh adherence to the transitory idea they kind of miss the financial crisis while it was brewing it had to turn around and do an about face or a huge rate cut so I think there's some sympathy with that idea but you have to come to the table if you think the FED should not go up you've got to come with a different theory of inflation of what's happening right now and what's going to happen and I don't necessarily hear that from those who are opposing the Fed
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