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The Fed moves closer to tapering asset purchases - YouTube
Channel: Fox Business
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time for the word on wall street top
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investors watching your money as the
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major indices are in uncharted territory
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once again this morning joining me right
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now is capital markets chief
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strategist catherine rooney vera brig
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mcadam limited founding partner greg
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swenson and michael lee strategy founder
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michael lee great to see everybody this
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morning thank you so much for being here
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catherine kicking things off with you on
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this first day of november uh for
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markets we've got a strong performance
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underway the federal reserve will kick
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off its two-day policy meeting tomorrow
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chairman jay powell is expected to
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announce a tapered timeline
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as we say as we go into that meeting
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what are you thinking in terms of the
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fed scaling back the purchases as early
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as this month with the dow industrials
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right now showing a triple digit move
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opening at a record high this morning
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likely
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right yeah the fed is going to do
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exactly maria what the market expects it
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to do this the fed is a market pleaser i
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can't imagine a scenario where they
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surprise either to the up or the
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downside with regard to the quantity of
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asset purchases that they plan to taper
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starting this week
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what i think is happening though murray
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is the market is losing confidence in
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the capacity of the fed to remain as
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lenient as it has
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intended to do so so the market is
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pricing and of course rate hikes coming
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as soon as july of next year and what
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we've seen maria last week is a
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flattening of the yield curve in the
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twos and tens region unlike anything
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we've seen since the middle of the
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pandemic of last year so that tells you
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that the market is expecting a slowdown
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in economic growth and higher inflation
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forcing the fed to hike sooner rather
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than later and i think that's right
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so you so do you think they'll start
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hiking rates in 2022 then catherine
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yes they're going to have to well at
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least they should um and if they do and
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i think we're going to get two rate
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hikes then then that's the right course
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for the fed to take
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and and then there's all of the spending
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in washington greg house speaker nancy
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pelosi is now pushing for a vote on the
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president's uh social spending bill
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as well as the infrastructure bill as
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soon as tomorrow treasury secretary
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janet yellen said that these bills will
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be anti-inflationary
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and she said that they would actually
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help to lower costs uh i i don't know
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how she gets there obviously all of this
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free money whether it be from the
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federal government or the federal
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reserve has stoked inflation so you're
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talking about another four or five
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trillion dollars
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expected to stoke inflation again she
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says no it's going to lower costs what
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do you think
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that's hysterical maria and and
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catherine brought up some great points
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about what the fed is able to do but but
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you also have to look at this reckless
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fiscal policy and so if any of this
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social spending plan is actually
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actually passes i hope it doesn't and
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there's a good chance that it won't and
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and they have you know taken some of the
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more destructive items out of it but
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there's still a lot of economic
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destruction in there and as far as
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inflation goes it's it's amusing to hear
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uh janet yellen say that when in fact
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you know welfare and entitlements
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will basically deter work it's it's a
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you know it's it's surely not an
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incentive to work and the tax and
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regulatory burden also reduces
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incentives to invest so you know whether
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you believe that that this inflation is
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transitory which is a bit of a stretch
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given that you know the pc index is the
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highest since 91 employment cost index
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is the worst since 2001 um you know the
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university of michigan
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numbers came out friday that that's you
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know down from 101 in february of 2020.
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it's now at 71.7
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and then you know consumer inflation
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expectations at 4.8 so inflation is real
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and the last thing you should do
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given those numbers and
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and future food price increases coming
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from the natural gas prices the last
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thing you should do is tax and regulate
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the supply side even more and then
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overstimulate or continue to
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overstimulate the demand side with these
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uh massive transfer payments
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yeah it's uh it's pretty incredible that
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they want to push this through even as
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we're living this inflationary scenario
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right now mike i got to ask you about
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some of that inflation as it relates to
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oil i've got a goldman sachs report here
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and goldman sees oil market deficit
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running at two and a half million
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barrels per day goldman see's oil bull
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remains intact affirms brent at ninety
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dollars a barrel target the journal is
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out with a story this morning saying
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that investors are buying oil as well uh
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the cost right now in terms of crude oil
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just below 84 dollars a barrel what's
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the impact
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look this pass costs on to everything we
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do across the entire country
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particularly those uh at the lower uh
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spectrum of income
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people that have to drive a long way to
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go to work the truckers driving across
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the country of which there's a shortage
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of so look we are in a crux of major
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problems going on right now
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uh with with a lot of logistical
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problems causing price spikes across
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everything that we see and do and at the
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helm you have uh mayor pete who who has
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no real accomplishments is basically
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sitting in his position uh for political
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favors um and you have obama
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administration waging uh waging war on
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fossil fuels they could easily fix this
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by releasing the strategic petroleum
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reserves re-uh reopening the keystone
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pipeline and there's a lot of other ways
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they could tackle this but they're
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choosing not to
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yeah and that collectively is pushing
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prices up
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and you're talking about gasoline being
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up 40 or so over the last year
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there's a buying opportunity there for
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somebody in terms of buying oil and
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that's what the journal is saying people
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are doing uh great word on wall street
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catherine rooney vera great to see you
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greg swenson thank you so much michael
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lee you're sticking with us all morning
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we're happy about that have a great
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monday you guys thank you
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