00:00 Speaker A

Let’s welcome in here. JP Morgan Asset Management Global Market strategist, that will be Meera Pandit along with Schwab Center for Financial Research fixed income strategist, Colin Martin. Welcome to you both. Meera, I will start with you.

00:15 Speaker A

So you get the cut. They’re going to stop shrinking the balance sheet on December 1st. Myron dissents, he wanted that jumbo size cut, half a point. Uh, Schmidt dissents in favor of no rate change. Your immediate thoughts, Meera. What do you make of those headlines?

00:39 Meera Pandit

When you’re flying blind, you have to stay the course and stay in autopilot. So I think at this meeting they didn’t have a whole lot of choice, especially given what they had signaled in the last meeting in their summary of economic projections and in their dot plot as to where they were going.

00:54 Meera Pandit

Two rate cuts further for this year. We’re getting one now. But again, there’s a lot of question about what happens in the final meeting of the year, and certainly this additional dissent was a bit of a surprise. If you had said there were two dissents this meeting, I would have assumed it was Myron and perhaps one other perhaps favoring a larger cut as there was some idea that we could have seen that last time around. But instead, it’s very much underscoring the fact that we have two camps here.

01:21 Meera Pandit

A camp that is a little bit more concerned about hotter inflation, and a camp that is more concerned about weaker job growth. And they essentially appear to be split right down the middle if you looked at the dots from last month. So clearly that debate rages on within the Fed and that debate is less equipped with the tools and the data they need to think about decision making.

01:43 Meera Pandit

Didn’t stop them from the the pause or the the end to QT, which was clearly the other the the other thing that stood out here. And then the last thing that stood out to me is they they seem to want to emphasize the fact that the economy is still growing. They’ve added in the statement that first state uh that first line there that the economic activity is still expanding, but at a moderate pace as opposed to moderating. So it does seem like they’re trying to to strike a little bit more of an optimistic tone on the activity that they are seeing in the economy.