Significantly in this statement here, in unanimous decision, the fed will maintain the target rate of near zero, between zero and quarter of a point until the fed is certain, it says that the economy has weathered this storm. Now the fed also approved establishment after primary credit rate of. 25 . The basic credit rate it lends to banks going back and forth no mention other Credit Facilities being related or created for this. Of the almost 5 trillion in stimulus. The Federal Reserve has yet to go forward. I talked with treasury secretary Steve Mnuchin and he said [inaudible] cheryl weve just lost edward. I want to give you a recap. Well look at the dow right now. Stocks are actually maintaining their position right now. The dow is up 570. All of the headlines were seeing cross from the Federal Reserve right now, again just to recap here, near zero, unanimous decision. It was 100 from the fed a unanimous decision and they are pledging aggressive action as the economic distress worsens. That is coming from the fed, again, 100 unanimous decision. Also talking about oil prices. I think aggressive action, that is a key line out of this. Also the flow of credit impaired. I want to bring in our illustrious panel right now to talk about all of this. First dallas fed advisor Danielle Dimartino booth. Kaltbaum Capital ManagementGary Kaltbaum is here with me. Vision four Fund Vice President , heather zumarriaga, and Fitzgerald Group chief investment strategist, keith fitzgerald. Hello to all of you. They didnt do anything we didnt expect, the language in particular their focus on oil prices, i found that very interesting and lack of inflation that were seeing in the u. S. Economy right now . Well oil, here in texas especially, all the way up, you know, through the middle of the country oil prices are having devastating effect on the labor market, in addition to the fact so much of the countrys Services Sector has been ravaged. You have kind of a doublebarrel, very heavy, bad, macroEconomic Data that the fed is nodding to. I think they rightly should be. The importantly the credit has been so impaired whether youre talking about commercial real estate or mortgage lending standards that seized up very quickly or anything from a car loan to credit card lines coming down. These are very real type of factors that the fed should address. Maybe i will leave to gary talking about about the big bazooka of facilities that the fed has committed to keep going. Cheryl you need a spreadsheet, danielle, to actually go through to look at those facilities you mentioned. Its insane. Yeah. Cheryl main Street Lending facility. You have got the commercial paper facility but, gary k. , one thing im still blown away with, i cant believe im saying this out loud, they have nearly seven trillion dollar Balance Sheet at the fed. I never thought i would see that in my lifetime, gary k. , there is a lot of concern now about that number . Oh, i thought it would get there and i think it will go to 16 to 20. Lets talk about there is this pandemic. Something needed to be done. They have gone to 0 Interest Rates, so savers are basically screwed. They will stay at zero percent, probably years. Theyre just going to go keep printing money, every time markets get in trouble or anytime the pipes get clogged going forward. What the ultimate out come of all of this . Beats the heck out of me t cant be good when youre conjuring up money out of thin air to do your bidding. I get something has to be done but i think they have gone, i call it run amok and theyre making markets used to everything theyre doing and good news, markets reacting, worst areas of the markets turned the corner including autos and cruise lines and airlines and things like that. Lets hope it continues because markets going up are a good thing. Cheryl you know what, keith, what concerns me in all of this, is what theyre buying. Before, if you go back to qe back in 2010 and 2014, they were very specific, went for highlevel securities they were buying. Now seems like theyre going for, well junk bonds to be honest with you and maybe theyre giving support to states and counties that were not necessarily fiscally responsible. Now they have the Federal Reserve behind them and that is riskier than what we did in 2010 . I share that opinion because people forget the success by its very definition, cheryl, includes failure and the financial graveyard is littered with the bones of institutions that didnt make it. This is a process that has to happen. So this idea of all gain and no pain, fundamentally is to garys. Going to comeback get us some day. I dont know when that is but now the financial out come is [inaudible] cheryl obviously all the Economic News were getting. Well get initial claims tomorrow. After the this point, 27 million in anything claims filed. Im curious to hear at 2 30 what he says about the unemployment issue, that is one of the feds mandates full employment. Were way off that right now. Also Monetary Policy, in general, heather. Those are some of the first questions he might be getting, heather. Absolutely. Were already at 26 million americans unemployed and another 3 plus million americans expected to join that number tomorrow when we get the claims data. Look, the fed is having to walk a very you think tight line right now between being way ahead of the curve and not doing enough because they dont want to be in a situation in 2008 where they were accused not doing enough early on. Even people in congress such as senator pat toomey who accused the fed going too fast, too far, in 2008, expanding their Balance Sheet are not criticizing them now, calling covid19 somewhat of a freakish black swan event. That is what we have to grapple with. I think stimulus is needed, necessary, right now. How they unwind the Balance Sheet in the future has to be addressed at some point in time. One thing . Cheryl go ahead, gary. The fed is telling safe who dont want to risk their money, you get nothing on your money. They tell the risktakers took ridiculous amount of risk with a lot of leverage, dont worry, well backstop you, save you from your losses. Bingo. Im sorry that is not what markets are supposed to be made of. I worry about the long termness of this. The fed is supposed to be the place where they lower Interest Rates, get things moving again. If there is a big issue, do the things here and there. I dont think there is in anything their charter says i will buy up junk bonds, which by the way make people pay up for the bonds because no longer you have real price discovery. Youre competing with jay powell on how much he is investing. So it is screwy all the way around for me. I just worry again, what the ultimate out come of this is going to be . Cheryl you know what im worried about, danielle, to you, is negative Interest Rates. That is not part of the discussion yet but that is the fear that well have negative Interest Rates in this country. They have left themselves no room. Well you know, i will have to push back because in all due deference to minneapoliss neel kashkari, he is the lone ranger on federal open Market Committee advocating for negative Interest Rates. Jay powell held a pretty firm line saying he will not go there but what he is doing instead is blowing up the Balance Sheet as he just spoke about. I dont think negative Interest Rates in the card for the fed because it would really slam banking in america to a screeching halt and that is the last thing we want to have lending stop. I think he recognizes it has not worked and it has not worked in japan. To your point about the idea, of the whole exit, the fed had a failed attempt at quantitative tightening. They couldnt normalize Interest Rates. The biggest challenge i think to them is theyre never going to be able to unwind the biggest experiment in all of Monetary Policy history and theyre going to stick taxpayers with potential losses because liquidity cannot resolve a solvency problem. Cheryl dangerous game that theyre playing. I think a lot of us on this panel actually agree with that. Danielle, gary, heather, keith. Want you to stay right there. I want to bring in Lauren Simonetti to look at markets. We didnt see stocks react to that lauren. At the same time i look at treasurys they actually stayed stable. I know youre looking at oil as well . Lauren right, right. Lets talk, cheryl about the major rally that sustained itself, even after the fed announcement. Stocks came back a little bit. The dow is still up 500 points. The s p 500, that is back above 2900. Big tech leading the way, nasdaq up about 3 . Speaking of risk out there, the russell 2000, that is the small cap stocks, up almost 5 today, up the past couple days. What lit a fire under the market happened very early this morning. It was gilead sciences. They make remdesivir. That is a treatment for coronavirus. Well the nih director, dr. Anthony fauci says that drug has proven to reduce Recovery Time in patients but he did add data of course needs further analysis. But were expecting to get more details from a government study of remdesivir. That could be announced later today. Meanwhile another study by gilead saw at least half of patients given fiveday dosage got better, discharged from the hospital within two weeks. The hope is that regulators green light this drug and americans can get back to work. It is not a vaccine. It is not a cure, but might be our best hope right now that the coronavirus doesnt have to be a death sentence. You can make people, as the economy starts to reopen, you can make people feel comfortable going out again in public. That hope has overshadowed another round of dismal Economic Data. Well get another round of it tomorrow with jobless claims. Were expecting to see in six weeks time 30 Million People out of work. Cheryl yes,. Filing for these benefits. Cheryl i know. People unemployed so were looking into the future and hope that we can restart the economy. Cheryl you look, gdp, coming in at contraction of 4. 8 was certainly not a great number. I mean, i shudder to think about the Second Quarter and the Economic News were going to get out of q2. That was just for q1, lauren. Lauren simonetti live for us. Just when you think youre getting a piece of bad news, you realize im going to be giving folks more bad news in the morning coming up for next quarter. I want to bring back the panel. Gary, i want to talk about Edward Lawrence. We lost his shot earlier. He said he spoke with treasury secretary Steve Mnuchin this morning and basically mnuchin said if we have to increase the size of the main Street Lending facility well add more money to it. The bazooka is out, the bazooka is going on the line, gary. It is more than than a bazooka. Let me state emphatically they will have to add more money. I speak to ton of Small Businesses have not gotten a dime and getting nothing back from their banks. In my little locality, bunch of restaurants are out of business for good. A lot of people out of jobs, on unemployment and dont know if they will get jobs, times that by all places around the country. I suspect we have not heard the last from mnuchin, the president around the rest. I suspect there will be more big bucks. The necessity is a bridge to get past the pandemic. Not necessarily what powells doing but we need the bridge or else, it will be very tough toe come back for many people. Cheryl keith a lot of this, this is the being pointed out as well supplements the ppp people i think in their mind separate the ppp from what treasury is doing but theyre working hand in hand. Mnuchin and powell are working hand in hand and also, heather, im curious to see what he says about Consumer Behavior and spending, to the point we made on the show, 70 of the economy is Consumer Spending and they will not want to go out and spend this summer, maybe not this fall, they will not want to get on a plane, they will not want to go to a restaurant what does powell say about that . Go ahead. This is the challenge, this is where main street has got to meet wall street has got to meet the fed. So far we have not seen the integration of this. You still have millions of people hurting, really hurts, out of work, unable to get a job, Companies Gone forever. That part, that loop has not been closed yet. Until that loop gets closed wellnot have any hard answers. This really is, never mind the coronavirus this, is all about the psychology of america. This more than anything, in my opinion plays into the recovery. Cheryl heather, i mean, you know, we have to talk about the federal deficit. Were talking about the feds Balance Sheet pushing 7 trillion. I have seen estimates it will hit 10 trillion next year. Gary k. Is looking 16 trillion. That is astonishing number, heather. Also the federal debt being taken on this country, that affects the Credit Rating of the United States. It absolutely does but even people in this dire Health Crisis we have, larry kudlow as well as treasury secretary Steve Mnuchin and a republican administration, republicanled administration are saying now is not the time to worry about debt and deficits. I get it. There is a lot of pushback, im expecting from someone like you, gary, especially. I do not believe the time is worry about it, fiscal an monetary stimulus both combined in tandem is way to approach the crisis. Call it a big bazooka or whatever you want but they are doing the right thing. Cheryl we have to come up with a new word besides bazooka to your point, but danielle, i go back to the issue, this happened on monday, theyre talking about helping states, cities, municipalities, a lot are struggling. They have no tax revenue coming in. Now the treasury will backstop them as well as the etf market as well as buying mortgagebacked securities and treasurys. What else can they do . Is there anything else they can buy . I will try my best to get away from from the bazooka analogy but right now they are shooting blanks. Somebody at the press conference needs to ask powell. They have laundry list of facilities, but only two are deployed and put into action, the Money Market Fund facility and commercial paper facility. What i want to know when i dont need to know the main Street Lending facility will get bigger. I need to know when it will get deployed and when the fed will stop shooting blanks when it comes to what theyre supposed to be doing for what we know is unmet need . When it comes to the stock market and the credit market and junk bonds, that all rebounded just from the feds lip service but Small Businesses cant rebound via lip service, they cant. So what a reporter in that rooms needs to ask, not how big the main Street Lending facility is going to be but when theyre going to deploy it. Cheryl gary, i think that depend on the length of the virus. We dont know. The virus is the economy and the economy is the virus and i can tell you all bets are off if we go three, six, months down the road and were still not open up a decent amount on the business front. It is good to see some of it is going on right now but i can tell you what is going on right now will not be enough to save the day. Were going to need a good 25, 50 minimum. I have to fly up to new york city in the next couple of weeks. They only have one flight a day up there. They used have 20 or 30 flights a day, and there is 20 full. That cannot continue or else. So much debt on books of these corporations. I had to do a little thing on ford yesterday, and i looked to see what they have on debt. They have 155 billion in debt. There is no way they can go too long, too far without selling a lot of trucks, without that debt coming home to roost. I think there is a lot more out there. So time is quite valuable as we move forward. Cheryl i remember my mother always told me, dont rack up the debt, cheryl but oh, well. Here we go as a nation racking up debt. Like there is no tomorrow. Danielle, gary, heather, keith, guys, thank you so much for all of you for breaking news coverage. Also to Lauren Simonetti, Edward Lawrence for the decision. Thanks, guys. We are watching markets as Jerome Powell is about to hold the news conference. He will be speaking in about 12 minutes from now. Now they did hold rates steady a month after they slashed rates near zero in unprecedented move was not even a meeting move, remember that. Well be talking about, leading you up to Jerome Powells comments when we come back. Stay with us. This is an athlete, twenty reps deep, sprinting past every leak in our softest, smoothest fabric. Shes confident, protected, her strength respected. Depend. The only thing stronger than us, is you. Shes confident, protected, her strength respected. I have always wanted to be a teacher. Ive been teaching for over 20 years. With everything going on, weve had to alter our classroom settings. We have