Bloomberg. You mentioned housing and todays gdp data when you look at that, do you believe that you have achieved a soft landing or are achieving a soft landing in the sense that removing to trend growth the rest of the year and next year that is our outlook overall, is for moderate growth of around 2 , pretty close to trend. Thats our outlook could be better. Could be worse you know, you never say youve achieved it. But thats our outlook we feel like our current stance of policy is appropriate as long as that remains broadly our outloo outlook. Donna borak with cnn. Chair powell, setting aside expectations for todays rate cut, obviously 97 sort of expected this would happen today, can you tell us more about the rationale behind moving at this particular meeting as opposed to waiting six weeks and cutting in december and if there was any discussion about that around the table . Thanks. Yeah. I think this seems to be the right movement you can see we had our usual range of prospects, range of views but in the end we had a strong vote in this action i strongly believe its the right action i strongly believe that the alcohols weve taken over the course of this year have been the right things for this economy and will continue to support growth and will do so in the future. Thank you, greg raub from market watch chairman powell it seems the differences all across the country, that different regions are reacting differently to the china trade and some regions are much weaker than others. Theres this urban versus rural divide, the coast versus the middle of the country. How does that factor into your decisions . You know, with Monetary Policy its famously a blunt instrument so, obviously, we cant raise Interest Rates some place and lower them other places, but were very conscious the first thing to know is to understand that and we called that out, as im sure you know in one of our recent Monetary Policy reports to congress, the sort of rural urban disparities in employment, growth and all kinds of things, Health Outcomes its a big and growing difference, set of differences we dont really have, you know, the tools to address that. We call things out that are important to our economy that we may not be that we may not have the right tools to best address them we call them out because were spending all of our time with the economy. Those are issues that maybe have to be addressed by legislatures and at the National Level and at the state level. Could i follow up quickly sorry. So are you asking congress to do something now, or will you ask them to do something down the road im not asking congress to do anything right now i sometimes have noted that it would be appropriate put it this way. We do what we do, which were assigned a job, which is maximum employment and stable prices we do Financial Stability. We do bank regulation. The u. S. Economy faces significant longer term challenges around potential growth, around labor force participation, around disparities of income and wealth, around all kinds of things and those are issues for congress theyre not issues for us. If you really want the u. S. Economy to be all it can be and raise the potential growth rate in the United States, you need proper Monetary Policy but really it isnt Monetary Policy really its fiscal policy that supports inclusive growth. Specifically the prospects for phase one agreement with china, give the ups and downs of the trade dispute, several truces and tentative deals have fallen through, are you concerned about developing Monetary Policy . Thats not how i would characterize it. I noted there might be progress there toward away from bad outcomes it seems like theres the makings of a possible settlement there. What the ultimate result will be but i would say that the tail risk of nonnegotiated no deal brexit seems to have decreased just as i would say that the situation in our trade negotiations with china seems to have taken it a step closer to resolution thats all im saying. If it doesnt work out then will we be back at Monetary Policy that thats one factor among many, many factors that factor into our assessment of the outlook. And if we see if we if things happen that cause us to materially reassess the outlook, change our assessment of the outlook in a material way, then we would act accordingly. The fed has pointed out many times in the past the rising inequality over the past decades and how that could be a factor behind sluggish growth in light of the recent outcome of the strike at General Motors, do you see the union having a role to play, helping to raise or lower middle incomes and promoting more shared growth in the long run so not for us to say what the appropriate labor arrangements will be. I will just say on the General Motors strike, its likely to have taken away a couple of tenths of growth this quarter. Thats likely to come back maybe over the first half of next year i think its good to see it settled but im not going to comment on what the appropriate labor arrangements are thats a little bit far afield from our task here thank you. Thank you, chairman wondering if you would categorize the current stance of Monetary Policy as accommodative or if its just that neutral was lower than we thought this time last year. Secondly, you know, were now two years removed from the tax cuts and jobs act and the economy is growing at about the same pace as it was about, 2 . So given your mention of fiscal policy and the role it plays in longterm growth, is it fair to say that the tax cuts and jobs act worked the way it was supposed to . Thanks. Say again what your first question was. If you lock at where the federal funds raised trading, it should be the middle to lower half of the range from 150 to 175. That means the real rate is probably modestly below zero i think my own sense would be that thats somewhat accommodative policy i would say, though, that theres a range of plausible estimates of what the neutral rate of interest is. And i think many of those who make such estimates have moved their estimate down over the course of many years and that process continues. Nonetheless that seems to me to be very likely to be an accommodative stance in policy and appropriate stance, given the situation were in with continue i continuing Downside Risks and that i mentioned. Hi, gene young from market news i wanted to ask about Financial Stability risks. Recently the imf and some other global policymakers have been expressing concerns over the high level of debt so as rates get lower in the u. S. And around the world, are you more worried about Financial Stability to risk to yield we monitor Financial Stability risks all the time its what we do sns the financial crisis, as i mentioned before currently we dont see large imbalances this long expansion is notable for the lack of large financial imbalances, like the ones weve seen, certainly before the crisis happened. We have a fourpart framework. Ill quickly mention the first is leverage in the financial system, low by historical standards. The second is funding risk, risk of runable funding and that risk is also quite low for banks but also for the nonbanking Financial Sector if you look at asset prices, we see some high asset prices but not broadly across a range we dont see bubbles and that kind of thing. And that leaves the fourth, which is leverage in the nonFinancial Sector, and thats households and businesses. With households, again, we dont see leverage we see them actually getting in very good shape financially in the aggregate. Plenty of households are not in great shape financially. That leaves businesses, which is where the issue has been leverage among corporations and other forms of business, private businesses, is historically high weve been monetarying it carefully and taking appropriate steps. So thats what i would say but its corporate debt is one part of a larger part of our framework. And it is something that were paying quite a bit of attention to and its been part of the last couple of shared National Credit exams and weve been monitoring it carefully and taking appropriate action. Hi, Nancy Marshall again, sir, with marketplace. Have the problems in the repo market led you to whether the liquidity and Capital Requirements for banks are too high is that something that the fed might review i think, again, the most important basic thing is to get the level of reserves back up so that reserves move up and down with some volatility we dont want them to move below the level they were at in the beginning of september, which is, again, between 1. 45 and 1. 5 trillion thats the main thing. Thats the first thing were on a path to do that between our temporary open Market Operations and also our bill purchases in addition to that in addition to that, were looking at there its a big, complicated marketplace. And one of the surprises, as i mentioned, was that banks that had told us that their lowest comfortable level of reserves was here, they were well above that yet they didnt deploy that liquidity when there seemed to be great opportunities to do that that didnt happen why is that . Intraday liquidity which used to be a common thing. Used to be a common thing for banks to have intraday liquidity, daylight overdrafts also there are a few things that make liquidity which is ample in the financial system. Thank you very much, chairman powell given this sustained level of low inflation even in this country, do you think there seems to be a higher possibility that lower Inflation Expectation will remain going forward. Do you think a japanlike situation object japanification of krovengly low inflation and Interest Rates in the u. S. Is getting trumped by the japanification of this situation . Do you think so . So we, of course, have watched the situation in japan and now the situation in europe, and we note that there are significant disinflationary pressures around the world we dont think were exempt from those. Of course, if you look at our current inflation performance, it hasnt been anything like what weve seen in those other places, but we dont think again, we dont think were exempt from those pressures and we are, therefore, strongly committed to having Inflation Expectations anchored at the level that is consistent with a symmetric 2 projective. Thats what were committed to we take the risk very seriously. The risk isnt that inflation might run a couple tenths below 2 the risk is that what weve seen is other economies getting on a disinflationary path and its very hard for them to get off. Once inflation moves down, you have less Interest Rates move down as well because theres an inflation component in Interest Rates, and, you know, we think the right thing to do is to do what we can now to hold and really move Inflation Expectations up so theyre squarely and firmly anchored at a level thats consistent with 2 inflation. Hi. Yahoo finance another type of Balance Sheet question but not necessarily focused on the repo crunch theres discussion before that that maybe we should move rather that the fed should move to a neutral Balance Sheet, mortgagebacked securities and maybe replace them with shorter term treasuries. I havent really heard an update on the composure, the composition of the Balance Sheet for now. Im just wondering if the fed is actively thinking about that right now and, if so, when you might expect to hear something on that. Its an issue but its not an issue that were currently working on or reaching a decision or anything like that its a big one and its one well return to over time but not imminently. Chairman powell, this morning the president tweeted were seeing the greatest economy in American History i just wondered as the chair of Americas Central Bank what you made of that. Im going to maintain my longterm practice of not commenting on anything any elected official would say thank you. Thank you very much. Chair powell wrapping up his press conference, 25 basis point rate cut lets check in on the Market Reaction we are at session highs, as we speak, with the s p 500 set for another record alltime closing high if things close where we stand, up. 3 . Russell still lags lets have a look at the dollar index, which sort of plays out rather nicely, the effect of market interpretation of what the chair was saying there initially, the dollar spiked on the expectation that we wouldnt be having more rate cuts when the chair said, quote, risks to the outlook are moving in a positive direction we then saw the dollar move back again at the point when he was asked whether or not we would reverse rate kus if trade and overseas tensions clear up he implied that rate hikes wouldnt that saw the dollar fall and took equities to session highs. Similar situation to gold, too. Inverse move happening there it fell, session low, 1483, lowest level that, too, has turned higher, as well, as the dollar has moved lower. Here along with our mega fed panel. Joining us today is david eservos, jeff mcculley, sarah, diana amoa and, of course, Cnbcs Rick Santelli we have a big two hours little less than two hours now straight ahead for you rick, your thoughts first. Similar moves in the treasury market as well the twoyear actually turned positive on the day. Now were seeing rates fall again. What has been or how would you characterize the reaction in the bond market to the fed and to fed chair powell today it was a liquidation move i think so was the dollar. Consider this. Weve had a boatload of curves steepening since the last meeting. If youre looking for a curve steepener, youre long twoyear and short tenyear the walk back on the rate cut makes it so you are now selling your two years and youre going to be buying your ten years, which exactly explains why the twoyear shot up to 167, why the tenyear shot down maybe they didnt do it at the same time but anybody, you can ask paul there, who has been at many trading desks, traders like to lay out some of their spreads, maybe they can time it just right the dollar, if you thought there may be more of a dovish tone, of cour course, the dollar would be lower. The dollar did move up i think that was your liquidation trade. The markets are getting their gps back tomorrow morning, which side of 16 or 17 basis points, tens to twos lie on will give us a good clue about the next set of moves moving forward. Josh, in terms of the s p 500 at the moment will be a record alltime closing high. Was the theme there from the fed chair that hes not going to be the one to derail that rally at least . Yeah. I think its interesting that today looks like its going to go out pretty much how the whole year has gone. Ru russell 2000 is slightly down. Nasdaq is ahead of s p, which itself is ahead of the dow this just falls in line with the trends weve been living with now for almost 11 months so not much has changed. The most interesting thing that people are taking from powells remarks and the statement was almost word for word, with the september statement. Its just this idea that it is still a midcycle adjustment, if you will, in the last couple of decades. Weve seen this before 1998 was notable there was a financial crisis around the world we did what we had to do here. Couple of rate cuts and they left things alone for a while. Same thing earlier in the 90s when greenspan shocked everyone with a rate hike and took it back two years later if thats what this is and powell is to be taken at face value talking about there really is no rush there arent any inflationary pressures that would have us undo this, thats exactly what the market wants and thats what he delivered i think thats in line of what were seeing. Steve liesman is able to join us now, asking questions there in the room to the fed chair ive seen your tweets, hawkish on one side and dovish on the other. I dont think its balanced that way, though i initially thought that the chairman had talked way more hawkishly not way more but a bit more hawkishly than was in the statement. The statement said he would assess and he said no, were pretty much on hold here the interesting thing came later, wilf. He said the only reason we would raise rates is significant height in inflation. That means the effort to normalize rates is over. Theres no more effort in that to put it in the words of one strategist or fixed income person ive been talking to, theres now a oneway bed on rates. Its either going to stay the same or go down. Its almost like the chairman, in his comments, have removed the possibility of Interest Rate hikes in almost any scenario last year we raised Interest Rates not because of inflation, but because we were normalizing. We just lost the moon, as tom hanks said, on inflation so, yes, he was a little bit hawkish for rates not going down but massively dovish in the possibility that they wont be going up. Paul, i see youre reacting to steves comments right there. If this marks the end of normalization, does that mean that the bar has just gotten even higher for future cuts . I think i agree with steve, first and foremost. I think he nailed it exactly and it was a midcycle adjustment because they overshot neutral. The most interesting thing to me in the shortterm basis is chair powell said he thinks theyre a little bit below neutral right now. Theyre accommodative, which i think is solidifying the notion that neutral is effectively the policy rate equaling the inflation rate or zero real. But the point that steve was making, i think, is the real home run here, is that its a oneway bet until inflation is above 2 and materially above 2 hes not going to ease any more. When youre looking at it as a