AWAY, BUT ONE OF THESE BIG
DISTRIBUTORS OF THE BRAND TIER
OF THE ON ME DECIDING TO MAYBE
A COUSIN OF THE TIES MAY BE
TEMPORARILY BUT AGAIN WE'LL GET
INTO THAT A LITTLE BIT LATER ON
THEY TEASE OUT OK WELL
THE FEDERAL RESERVE AS WE'VE
BEEN TALKING ABOUT HERE SINCE
02:00PM EASTERN TIME CUTTING
RATES AGAIN NOW THIS IS THE
SECOND TIME FOR 2019 IS ACTOR
FITZ'S RATE STRATEGIST OVER AT
WELLS FARGO SECURITIES HERE
WITH US
ON SET ALWAYS GREAT TO HAVE YOU
WITH THE ZAC OF THE CUTS
MARKETS, EXPECTING IT YOU'RE
EXPECTING IT ANY SURPRISE IS TO
THEY DID THE COMMENTS
FROM THE.
>> BUT YES WE THINK FED
CHAIRMAN PAUL DID A PRETTY GOOD
JOB MAINTAINING A NEUTRAL TONE
THROUGHOUT THE PRESS
CONFERENCE. BUT THE ONE THING
THAT STRUCK US IS WHAT THE DOT
PLOT. THE AND IT DID SHIFT
LOWER, BUT NOT ENOUGH TO MOVE
THE MEDIAN FOR 2019 2020'S.
SO THAT'S CALLING FOR
NO MORE RATE CUTS THIS YEAR OR
NEXT YEAR WHICH IS PRETTY
DISLOCATED WITH WHAT THE MARKET
IS SHOWING US RIGHT
NOW SO THAT TO US IS A LITTLE
BIT OF A HAWKISH TONE. THE
MARKET IS STILL KIND OF PARSING
THROUGH ALL THE INFORMATION WE
GOT TODAY BUT THAT'S WAS SEEMS
A BIT MORE HAWKISH THAN WE
WOULD ANTICIPATE.
>> FOR THOSE NOT AS INTELLIGENT
AS YOU ARE WHAT IS THE
DOT PLOT.
>> SO THAT'S THE FED
POLICYMAKERS EXPECTED POLICY
RATE FOR THE END OF THE VARIOUS
YEARS
2019 2020. THE LONGER RUN SO
THE MEDIAN DOES A WAY TO GAUGE
WHERE POLICY MAKERS THINK
THINGS ARE GOING
IN ACT.
>> WE'RE TALKING ABOUT THIS
LATE DAY RALLY AS WELL AND
REALLY JUST ROLLING OUT A DEEP
THE KINDS THAT WE'VE SEEN AFTER
THE
INITIAL ANNOUNCEMENT. WHAT DO
YOU MAKE OF THAT WHAT REALLY
DROVE IT.
>> YES, SO I GUESS THAT PLAYS
INTO OUR STORY, OUR EQUITY
STRATEGISTS ARE LOOKING FOR THE
S AND P TO ENDURE AT
3088.
>> SO THAT KIND OF FITS WELL
YOU KNOW THE US ECONOMY IS
DOING WELL AND THE FED TO
DELIVER THE RATE
CUT THEIRS STILL STILL ROOM TO
RUN HERE SO I THINK PERHAPS THE
EQUITY MARKET IS RESPONDING
WELL TO THE RATE CUT IN A MORE
NEUTRAL TONE IN THE PRESS
CONFERENCE THAT KIND
MEDIATED ANY FEARS AT THE PRESS
CONFERENCE COULD BRING MORE
VOLATILITY IN AND I THINK THAT
MIGHT BE HELPING OUT.
>> I WANT TO GO TO WHAT
HAPPENED OVERNIGHT HERE THIS
EMERGENCY INJECTION, THE FED
HAS DONE TAKE A 53 BILLION I
THINK IT WAS TO HELP BANKS
REALLY LEND TO EACH OTHER
WHAT'S GOING
ON THERE.
>> YES, SO WE HAVE A COUPLE
FACTORS EARLY IN THIS WEEK, ONE
OF THEM BEING CORPORATE TAX
PAYMENTS WHICH WERE DUE ON THE
15 AS WELL AS A LARGE
SETTLEMENT OF MID MONTH
TREASURIES THE
0.54 BILLION AND THAT ISSUE AND
SO YOU KIND OF HAD MONEY COMING
OUT OF THE SYSTEM AND THE FORM
OF TAX PAYMENTS AND TREASURIES
COMING ON AS FAR AS
LARGE SCOOP ON SUPPLY AND THOSE
2 FACTORS SEEM TO DISRUPT THE
REPO MARKETS AND THE FED HAD TO
STEP IN. I MEAN AND PROVIDE
SOME LIQUIDITY.
>> THE FROM THE BANKS
PERSPECTIVE IS THIS A GOOD
THING OR BAD THING FOR YOU.
>> WELL IT'S A GOOD THING THAT
THE FED A NEW AND DECIDE TO
STEP IN THE FACT THAT THEY CAN
KIND OF COUNT ON THE FED GOING
FORWARD TO.
TAMP DOWN MARKETS WHEN THINGS
GET A LITTLE BIT OUT OF CONTROL
IS DEFINITELY ENCOURAGING GOING
FOR THE FACT THAT IT HAPPENED
IN THE
FIRST PLACE THERE'S A LITTLE
BIT UNSETTLING AND WILL BE
LOOKING UNTIL 2 QUARTERS AND TO
SEE IF WE HAVE ANOTHER SIMILAR.
SOMEWHERE ACTION IN REPO
RATES AS THERE'S ANOTHER
SETTLEMENT OF LARGE LARGE
SETTLEMENT OF TREASURY AND AND
TYPICALLY BALANCE SHEETS BECOME
A LITTLE BIT MORE SCARCE
4TH QUARTER AND SO THAT WILL BE
A GOOD LITMUS TEST TO SEE WHERE
THINGS ARE GOING YOU THINK IT'S
SOMETHING TO BE CONCERNED I
>> BANK OF AMERICA CAME OUT
WITH
THE A A NOTE SAYING THAT IT'S
SORT OF UNPRECEDENTED WE
HAVEN'T SEEN IT SINCE 2008.
>> THAT'S A LITTLE BIT
CONCERNING AGAIN THERE, SOMEONE
OFF ACTORS THERE SO I THINK THE
BIG TAKE AWAY IS
THE FED MIGHT NEED TO GO BACK
TO THE DRAWING BOARD AND LOOK
AT WHAT THE APPROPRIATE AMOUNT
OF BANK RESERVES ARE IN LOOK AT
SOME OF THESE MORE STRUCTURAL
THINGS THAT ARE A LITTLE
DIFFICULT
TO QUANTIFY AND SEE KIND OF IF
THEY NEED TO CHANGE THEIR
ASSUMPTIONS AND HOW THAT
FACTORS
INTO THEIR POLICY TOOL SET
POINT FORWARD.
>> PERHAPS A LITTLE BIT EASIER
TO QUALIFY THOUGH
IS HOW THE FED CUTTING RATES
ACTUALLY WORKS AND TO YOUR
LENDING BUSINESS OR THE BANKING
SECTOR'S LENDING BUSINESSES
THAT
WE SEE ACROSS THE BOARD WHAT
HAVE YOU BEEN WATCHING THEIR
FROM CONSUMERS AND HAVE THEY
BEEN FLOCKING INTO
OPPORTUNITIES OR IS THIS
SOMETHING WHERE THEY'VE BEEN
WAITING
KNOWING ANTICIPATING. AND
HEARING MURMURS THAT THERE WAS
GOING TO BE ANOTHER CUT AND
THEY WERE JUST WAITING FOR
>> YEAH THAT'S INTERESTING IT'S
HARD TO REALLY DRILL DOWN INTO
SOME OF THE MICRO DATA BUT IF
YOU TAKE A STEP BACK AND LOOK
AT THE MACRO DATA CONSUMER HAS
BEEN VERY STRONG SPENDING HAS
BEEN STRONG RETAIL SALES EVEN
SEEN INFLATION PICK UP THESE
ARE ALL THINGS THAT INDICATE
THE US ECONOMY IS IN
A BAND, PRETTY GOOD SHAPE AT
THIS POINT WE HAVE SEEN SOME
WEAKNESS IN INDICATORS SUCH AS
THE I S M MANUFACTURING INDEX
WHICH FELL INTO
CONTRACTION TERRITORY. SO WHILE
THERE ARE SOME SOFT SPOTS WE
SEE THAT IS LARGELY DRIVEN BY
UNCERTAINTY IS FROM
TRADE POLICY. BUT THE
UNDERLYING PACE OF THE ECONOMY.
THE CONSUMER IS PRETTY STRONG I
GUESS THERE'S THIS THIS.
>> THE QUESTION THOUGH IS IS
THE ECONOMY ONLY GOOD IF THE
VENUE IF THE FED
CONTINUES TO TRY TO SUSTAIN THE
EXPANSION AND IF THEY WERE TO
GO IN YOU KNOW YEARS OUT FROM
NOW. EFFORT AGAIN TO RAISE
RATES. HOW CONSUMERS REACT HOW
WOULD THE MARKETS AND THE
ECONOMY.
>> YEAH, IT'S TOUGH TO SAY AND
I THINK YOU MAKE A GOOD POINT
THAT PERHAPS SOME OF THIS IS
ALL RESPONSE TO ALL OF THIS
EXPECTED EASING AND AND THE FED
IS DELIVERING ON THE EVENING.
GOING FORWARD I THINK IT'S
GOING TO COME DOWN TO WHAT'S
GOING ON WITH GEOPOLITICAL
UNCERTAINTIES IN OF SOME OF
THAT IS REMOVED THE FED TO
REMOVE
THEIR ACCOMMODATED STANCE AND
THAT NET PERHAPS YOU'RE ABLE TO
KEEP THINGS PRETTY STATUS QUO
AND THAT THE US WOULD INDICATE.
THANKS TO KEEP GOING
FROM HERE.
>> OK AND I DO ARE YOU KNOW
WANT TO GO BACK TO SOME OF THE
COMMENTS OF BECAUSE TO YOUR
POINT IT SAID IN ITS IMMEDIATE
REFERRED TO THE LABOR MARKET
AS STRONG TALKING ABOUT THE
ECONOMIC ACTIVITY STILL RISING
AT A MODERATE RATE AND ALSO
TALKING ABOUT HOUSEHOLD
SPENDING THE CONSUMER THAT
SPENDING RISING AT A STRONG
PACE IS ARE ALL VERY
POSITIVE WORDS AGREED TO
STREAMLINE POSITIVE SORT OF
WORDS ARE THERE SOME MIXED
SIGNALS THAT THE FED IS SENDING
OR AT LEAST, YOU KNOW MAYBE
INTERPRET THOUGH WAY THAT THE
FED HAS COME OUT THIS DECISION
GIVEN THIS
CONSUMER SIDE.
>> THINGS YEAH I THINK AS FAR
AS WHAT THEY'RE DOING WITH THE
POLICY RATE AT THIS POINT IT'S
REALLY COMING DOWN TO CONCERNS
ABOUT GLOBAL GROWTH WHICH
HAVE SHOWN SIGNS OF WEAKNESS
SPECIFICALLY IN THE EURO ZONE
IN CHINA AND WE DO EXPECT SOME
OF THAT WEAKNESS TO PERSIST
AND THEN THE OTHER SIDE OF THE
COIN IS THE THE GEOPOLITICAL
UNCERTAINTY WHICH WE'VE SEEN
THINGS MOVE A LITTLE BIT IN THE
QUOTE UNQUOTE RIGHT DIRECTION
RECENTLY, BUT ALL OF THESE
UNCERTAINTIES WHETHER IT BE
TRADE EXIT PROTESTS IN HONG
KONG THERE'S STILL A LOT OF
UNREST OUT THERE AND THAT'S
REALLY WHAT THEY'RE POINTING TO
WHEN IT COMES TO.
>> BUT IT'S PARTICULARLY
INTERESTING BECAUSE THEY SAID
THAT WE CAN.
>> QUANTIFY THE IMPACT OF
GLOBAL
TRADE POLICY AND THE IMPACT OF
THAT ON THE ECONOMY RIGHT NOW
WHAT DO YOU MAKE OF THAT.
>> ALMOST
FURTHER SUPPORT.
>> THEY'RE EASY STANCE BECAUSE
THEY DON'T KNOW HOW TO QUANTIFY
THESE THINGS THEY WANT
TO PROVIDE SUPPORT TO THE
ECONOMY AT A TIME THEY THEY
THINK IT NEEDS IT WHILE THEY
MIGHT NOT HAVE A
PRECISE ESTIMATE OF HOW MUCH
SUPPORT IT MEANS IT'S BETTER TO
ACTS PRESENT REALLY AND HAVE AN
EASING BIAS WHILE ALL THIS