00:00Uh, we got to go straight to Michael on this

00:01Thank you for being part of our extended desk on this very important day, final Fed day of the year

00:04What did you make of the Fed's moves? Yeah, I disagree with Steve

00:08I think it was dovish

00:10Despite the quote, "fog of having no data," the Fed cut

00:12What does that tell you? They want to cut some more

00:16I think probably not in January, maybe not in March, but the door is open

00:19So Powell could have said, "We're done," which is what the Reserve Bank of Australia did a couple days ago

00:23The Fed did not do that

00:25So the Fed said, "Hey, look, we might do this again," and buying T-bills

00:29That's a very dovish move

00:30Equities ripped

00:32You all saw that

00:33I will say the bond market didn't react as much as I would have expected given a fairly dovish response

00:37Two-year Treasury yields down seven, eight basis points, something like that

00:40I thought it could have been 15, but still, I would take it as a dovish sign

00:45Do you also disagree with Steve? I, I understand what Steve's saying

00:47I, I'm somewhere in the middle because there's a lot to decipher here, but I'll say this

00:50I think in terms, no, no

00:54I think in terms of the 40 billion, they're trying to put out a fire before it starts

00:57They see the potential for one and they're like, we're not going to let this get to that point, which I'm okay with

01:02But I think you can make an argument this is bond bearish, and I'm on the bearish side, but this is definitely precious metals bullish in my opinion

01:11And I think if you look at the price action in some of the miners, the initial reaction was to sell off on the back of what they interpreted

01:17And now, the knee-jerk reaction was, wait a second, if we're going down this QE route, like you said, I mean, gold should continue to move

01:25And I think that's my biggest takeaway

01:27We're going to break protocol here because while I said goodbye to Steve, we'll bring Steve back in because Michael so decisively said that he had disagreed with him

01:30Oh, the rebuttal

01:33Here we go

01:36Yes, the rebuttal

01:37You didn't know you had to do this either

01:38No, this is news to me

01:40I, I don't, uh, I, we did not say it wasn't dovish

01:43I hope, I don't know how you got that impression

01:44I said it was a hawkish cut in the sense that they Suggested using a variety of language that they were not going to cut in January, and maybe the next cut was further down the road

01:54But I don't think this was more hawkish, and I thought, I also thought the balance sheet stuff was pretty dovish

01:59So I just want to correct that if you misunderstood me

02:03I think when you lead with hawkish, the natural interpretation I would have is it was hawkish

02:07And I think versus market expectations, which were pretty bowled up on the hawkish side, they, the Fed didn't quite get there

02:12So Powell wasn't sufficiently hawkish to placate the hawks out there in market land

02:18When you look at the moves and yields over the last five, six days, I think they'd really gone a bit to one side, and he wasn't quite There

02:24So I'd still go

02:26It wasn't particularly hawkish, meaning I thought it was dovish

02:28Not screaming, but I think one thing that would be interesting would be if, if you're so, if you think it's that dovish that you're now saying they're going again in January, are you that dovish? No

02:39No, we're not, not saying that at all

02:42I think the door is open

02:45So the market, in terms of a hawkish cut, what I would have labeled a hawkish cut is Powell says, no, we're effectively done

02:48We're not going in January, not going in March

02:50I'm going to pass the baton to some other lucky soul in May, and that person can deal with it, but I'm not going to do anything else

02:55He didn't do that

02:56So that's how I

02:57Your hawkish bar is much higher

02:58I think it is

02:59That's probably the takeaway

03:00Um, Steve, we got to let you go this time for real

03:03I'm going, you can't fire me, I quit

03:06Thank you, Steve, as always

03:08Dan, what's your take? Let's bring it back to repos

03:10I'm just kidding

03:11Um, we're not supposed to talk about that on TV

03:13You know, I take issue with the fact that the market ripped

03:16I mean, we closed up 70 basis points

03:17If you look at the intraday S&P from 2:00, I mean, it was kind of muted, you know, and then you look at yields

03:23The small caps finished at all-time highs

03:25Yeah, your small caps did

03:27Um, but you know, maybe that's a little bit of the catch-up trade, Tim

03:29I know you've been on it for three years

03:30Um, but it's back, baby

03:31Um, no, I, I just think that, you know, yields didn't move

03:33The dollar was down a little bit, Bitcoin didn't really move, like stuff that I was looking for, like some macro reactions

03:36They just really didn't happen

03:40All that said, we are very near, you know, the all-time highs in the S&P 500

03:43It really feels like this is it

03:45We get through these earnings this week and have a ball

03:48What do you call it, guy? Like a Santa Claus rally or something like that

03:51Yeah, I use that term every year

03:52Ho ho

03:53Yeah

03:54Mistletoe

03:54One thing Pal said that I I thought was interesting, how he just said, you know, we are still committed to 2%

03:58Mhm

04:00And then moved on to something else

04:04We're nowhere near 2%

04:07Did he mean a two handle, two something percent? Because we are, if if that were the case, if they were still committed

04:12to 2%

04:16We would have seen a lot more hawkish rhetoric, unless he believes that the impact is solely because of tariffs and that there is a time at which that impact will roll off

04:21So, do you want to move monetary policy based on something exactly based on transitory inflation? That was my take

04:29I don't know

04:30I think the Fed was influenced by the freshest data it had, which was this morning's Employment Cost Index, which, uh, ECI at 3 and a half percent on wages is not that hot

04:39And, and, and the implication from this report also is that at a 2% target, you're not far off with all the productivity gains that the labor market can certainly be absorbed, and actually some of the tariffs can be absorbed

04:50And this gets you to a Fed that Really should be on hold, um, seemingly

04:53Um, I, it's funny, Michael, because you are, you know, you've definitely been very adamant that you thought it was, it was we're done

05:00Um, or but that yet they threw, I'm sorry, that we're not done

05:02We threw a lot of stuff out there

05:04Didn't he say three times, like, we're going to wait and see? Wait and see

05:09Is wait and see mean we're not done? Because, because when I heard that three times, and he said it maybe, maybe more than three times, anytime he had a chance to say we went today, but we're now going to wait to see how the economy responds

05:21And, and that to me sounds like a Fed that is on hold

05:26And it sounded more hawkish, but I would interpret that as being a Fed that's taken the right stance

05:30They've got tons of data

05:31Coming in just next week, as a matter of fact, so why prejudge it? But at least he didn't say we're definitively done, which other central banks have done

05:39So that was, that was my redone.