Are We at the Point Where Central Bankers Can Do No Right?

Real Vision: Finance & Investing

Real Vision

Business News, News, Investing, Business

4.1 • 1.1K Ratings

🗓️ 16 March 2022

⏱️ 42 minutes

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Summary

The Federal Open Market Committee (FOMC) made it official this afternoon, raising the fed funds target range by 25 basis points to 0.25% to 0.50%. The FOMC also boosted the interest on reserves rate and the reverse repo rate. In its statement announcing the decision, the FOMC noted with regard to the Russia-Ukraine war that “in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.” The Fed forecast year-end inflation of 4.3%, with a total of seven rate hikes through year's end. U.S equity indexes were mixed in the immediate aftermath of the FOMC announcement, as bond yields surged. Chinese stocks notched their biggest rally in 14 years, as President Xi Jinping’s government offered wide-ranging support for capital markets. Darius Dale, founder and CEO of 42 Macro, joins Real Vision’s Ash Bennington to discuss the FOMC’s decision, the complex set of circumstances central bankers face, and China’s accommodative moves. Want to submit questions? Drop them right here on The Exchange: https://rvtv.io/3iauaz6 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	Welcome to the Real Vision Daily Briefing. It's Wednesday, March 16, 2022. I'm Ash Bennington.
0:11.0	It's Fed Day. The FOMC has pulled the trigger, hiking the Fed funds rate, 25 basis points.
0:16.4	We're joined by someone who follows all of this very closely. Darius Dale, founder and CEO
0:22.3	of 42 macro. But first, let's take a quick look at what's happening in U.S. equity markets
0:27.3	on this Fed Day. Dow Jones industrial average up, one spot five five percent up to 34,063 here
0:34.4	at the end of the day. S&P 500 settling at the close of the session at around 4,358. That's up
0:41.7	approximately two and one quarter percent. Nasdaq big winner on the day up, 3.77 percent
0:49.8	closing out today is trading at 13,436. Russell 2000 also up on the day about two and a half
0:57.7	percentage points closing out the day at 2019. And we could not have a better guest here on Fed Day
1:05.4	than Darius Dale. We know you're watching it closely. Darius, welcome. Ash what's up, man. It's
1:10.4	great to be back. How you doing? It's great to have you back. By the way, Darius, you don't know
1:13.7	this yet. But you are on the two-year anniversary show for Real Vision Daily Briefing. So not just
1:18.4	Fed Day, an exciting day to have you here. I'm blessed to be here. Man, thanks for having me. It's
1:22.5	awesome. Let's get right into it. Let's do it, man. What's happening? What's going on? What's your take
1:27.1	on this Fed Day? Yeah, so Powell did a really remarkable job in my opinion of walking the tight
1:33.5	rope that is appeasing the sort of faction of the political spectrum, the factor of the investor
1:38.8	spectrum that wants them to do get really serious on inflation and doing what it takes to restore
1:44.8	a price ability to borrow their phrase. But they also said enough about in terms of talking
1:49.4	up the economy and really sort of kind of swaging some of the concerns around growth in a near-term
1:56.0	recession in order to sort of remove what I would consider to be at least temporarily a hawkish
2:02.0	right tail from policy. And so as you can see, obviously, asset markets are generally behaving
2:07.3	positively if it's a response. If you look at where, for instance, the S&P was prior to the
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