Transcript

For more about what this could mean for the markets for the potential decision, CNBC contributor Peter Boockvar joins us now. He is also the CIO at one point, BFG Wealth Partners CIO. So, Peter, we were talking a little bit about this with the Fed and how John Williams sort of opened up the door to like, look, yeah, maybe, maybe we're gonna have another cut. We're not. We don't have the door open. We don't have the door shut. What do you think about where the Fed is thinking and what data they're going to be using to make this decision? Well, what stood out about what William said is being the New York Fed president, having a vote at every meeting. What he says usually very much matters. And I have to believe that he did not write this speech and give it without Jay Powell knowing. Now, if he was just a regional Fed president giving his opinion, OK, we got it. But because of his position at the New York Fed, to me that was the signal that they're more likely than not cutting interest rates. And of course. We had that big move in the Fed funds futures today, I think with respect to data. I know we wanna see the hard data from the government, but there's still so much information out there. Even just the Feds Beige Book provides a ton of information at all different levels of the economy. So they still have a pretty good sense of things. So they're not flying blind in this meeting. I think if they feel like that the labor market is weakening, they're less worried about inflation, they'll cut. But there's going to be dissension we are going to have over the upcoming meetings until we have a next Fed chair, more dissents. Than we've ever had at each meeting. Yeah, it is very interesting to see where the Fed is sitting right now. It feels like something we haven't seen in at least a very long time. What do you make about the job picture? It seems like every day we get a new announcement from a pretty decent sized company laying off workers. And it's not necessarily the lowest tier workers, but maybe some of these mid level workers and engineers at Amazon. Are you starting to worry more about the labor market? Have we flipped the conversation of the mandate where inflation is less of an issue? It's still elevated, but sort of. Staying where it is around 3. But now we need to really be careful about jobs. Well, we do, but one of the reasons why the economy has pockets of weakness is because of that inflation. It's because inflation is a 3% or more for other people that are are living it every day. It's it's that depressing on consumer behavior, particularly lower middle income consumers that is causing these pockets of weakness in the economy. So I know we try to look at it one or the other, but it's the inflation that's causing the worries about the economy which is causing worries about the labor market. Now with respect to large businesses, yes, those are the high profile ones when the companies announced these big layoffs, but there are some netting out of that. The the the jobless claim numbers is still relatively low. Most of the job reduction and hiring started in April with small medium sized businesses. So what's happening with bigger companies now we have to pay attention to, but this is a really delicate balance. But I do want to make an important point here is that what we've seen so far in the yield curve is that while the Fed is cutting short term interest rates. Long term interest rates are not going down. We're seeing that in Europe as well. So yeah, maybe we get that extra rate cut, but if the 10 year yield is not falling, somebody who's looking to buy a house is still not getting any relief. Peter, it's Karen. Thanks for being on. I have a technical question I'm just curious about. Let's say you had five members who wanted to cut, 5 members who wanted to keep steady and all the rest had other opinions. What happens in that scenario? I think Jay Powell would be the decider, but that would be an interesting scenario, Karen, for sure. But I, I, I think Powell's tenure and the tenure of his predecessors is very much trying to get to a consensus. So I think he already has the votes to get what he wants. For certainly cutting with other governors being Bowman, Waller and now the New York Fed president John Williams. So if he wants to cut, he's got the votes. If he wants to push back against them, well then he'll have to rely on some Fed presidents. But he's got 4 meetings left. I think he will be the end decider if that scenario came about.