Fed Policy and the Outlook for Interest Rates

0:00 Speaker 1 The markets. What the heck is going on? With us today is John Terrett, a longtime TV reporter, especially about the news and especially about the finance industry. John, give us a report. How is this week? How is next week going to be? And give us a prediction of the future.

0:20 Speaker 2 Good morning, John. Well, there were two key events in this past week. One was Kevin Walsh, the new chairman of the Central Bank. appearing at the Jackson Hole Symposium in Wyoming and giving a speech. And he did exactly what Walt Free wanted him to do. He said exactly what they wanted him to say, which was to acknowledge

0:38 that inflation is a real problem and also to set a target. Once again, he said the target for inflation is a firm and fixed 2% of PCE. And he hinted that the Fed would use all the tools it has at its disposal if that doesn’t get achieved. very very soon without actually saying the words rate hikes that’s

1:00 the key thing you see so as a result of that we now have wall street betting a 50 chance for rate hike coming up when the fed next meets on the 15th and 16th of september and this speech was quite long actually in 2022 chairman powell jerome powell gave just 1300 words in his speech it lasted only

1:18 eight minutes So this was really quite a different sort of event. The other big story of the week was NVIDIA, the chipmaker, with a blowout, a blowout second quarter of earnings. You know, John, they made $ 92 billion on chips for data centers alone. They reignited excitement over AI investing. And their stock value, their market value, went up in the

1:39 space of about 24 hours by $ 400 billion. These are figures that’s very hard to imagine. Extraordinary.

1:46 Speaker 2 Bitcoin’s having a good time, or it certainly was up until Friday, with the token now around 77,000, 78,000, something like that, as the Clarity Act moves closer to the Senate floor on the 15th of September. And, John, in the week ahead, we hear from the chipmaker Broadcom, we hear from Michael Dell’s Dell Technology, which is a very

2:03 interesting company, the athletic apparel maker Lululemon, And then right at the end of the week, we get the August government non-farms jobs report for the month of August. That’s on Friday, the 4th of September at 8.30 in the morning.

2:14 And you know who will be watching that very closely. One Kevin Walsh on Constitution Avenue there in Washington, D.C. at the Central Bank.

2:22 Speaker 1 John. I thought you were going to say Donald Trump. Thank you so much, John Territon. We’ll catch up with you again real soon. Thanks, John.

2:31 Speaker 2 See you next Sunday. Thank you.