Charles Payne Show July 30, 2024

So tomorrow is a huge day for Jay Powell and the Fed. And part because of their own dot plot, right? What they put out there is sort of to guide their own sort of decision making suggests maybe they're already too late when it comes to cutting rates. I'm going to bring in now monetarymacro.com, CIO, Joseph Wong and Joseph. You know, you kind of put this out there, right? And this is the dot plot. So PCE 2.8 for the end of the year, we're already at 2.8, and it's 6, unemployment rate 4.0 or 4.1. I think the question now, when you look at this is why wouldn't they be cutting tomorrow? Hey, Charles, thanks for having me and you're exactly right. So looking at inflation, Fed is way ahead of schedule, core PCE 2.6% year over year ahead of schedule, they were thinking 2.8. The unemployment rate is worryingly rising. It keeps rising. It's at 4.1%. And the Fed seems to be definitely behind. Like, why are rates at multi-decade highs if inflation is only a little bit above target and unemployment is rising? They definitely should cut rates tomorrow, but they're not going to because that's just not the Fed style. There are three reasons for this. So the modern Fed, they never, never want to surprise the markets.

明天对于杰伊·鲍威尔和美联储来说是个重要的日子。部分原因是他们自己的点阵图，对吧？他们发布的东西某种程度上指导了他们自己的决策，可能表明他们在降息问题上已经太晚了。我现在邀请了monetarymacro.com的首席投资官Joseph Wong。Joseph，你之前也谈到过这一点，对吧？这是点阵图。年末核心个人消费支出（PCE）目标是2.8%，我们已经达到了2.8%。失业率目标是4.0%或4.1%。现在的问题是，为什么他们明天不会降息呢？ 嘿，Charles，谢谢你的邀请，你说得很对。看一下通胀，美联储的进度已经超前，核心PCE同比增长2.6%，比预期的2.8%还快。失业率令人担忧地上升，已经达到4.1%。美联储显然落后了。如果通胀率只是略高于目标，而失业率正在上升，为什么利率还处于几十年的高位？他们明天绝对应该降息，但他们不会这么做，因为这不是美联储的风格。这里有三个原因。现代美联储绝对不想给市场带来意外。

The Swiss National Bank, they could just cut rates and say, forget, I forgot to tell you guys. Surprise, but the Fed is not like that. So they're very cautious. What they'll do tomorrow is to carefully set up rate cuts for September. Another reason they're not going to cut is this Fed has had egg on its face for two years. Now remember, they were all insistent on transitory inflation, but that was not the case at all. Then again, last December, they were thinking mission accomplished only to see inflation roar back up at the first quarter of this year. Now, they don't want that to happen again, so they've been extra conservative. And one last reason they just won't move tomorrow is that Chair Powell has noted that this shift towards the rate cutting cycle is a big deal. Now recall in January, the market was pricing in as many as seven cuts this year. So the market is really sensitive to this and they don't want risk assets to go crazy. So last week, Bill Dudley, who's of course in charge of the New York Fed at one point, said he changed his mind. It was last week of the week before, right? And said, you know, that July shipping on the table, here's the thing. You gave us three reasons why they wouldn't do it. Let's not forget that in 2019, Dudley also urged the Fed not to cooperate with Donald Trump. Like, I mean, this guy hates Trump so much and that brings in a political aspect, right? I mean, if they were to cut tomorrow, maybe even September, they could get some pushback from the Republican Party, no? You know, absolutely.

瑞士国家银行可以突然降息，然后才告诉大家“抱歉，忘了告诉你们，惊喜！”。但美联储不是这样，他们非常谨慎。明天他们会小心翼翼地为九月的降息做好铺垫。另外一个原因是，美联储在过去两年里一直处于尴尬境地。记得他们曾坚信通胀只是暂时的，但事实并非如此。然后，去年十二月他们认为任务完成了，结果今年第一季度通胀又飙升。他们不想再犯同样的错误，所以格外保守。还有一个原因是，鲍威尔主席指出进入降息周期是个大事。回想一下，今年一月市场预计今年将有多达七次降息，所以市场对此非常敏感，他们不想因此让风险资产疯涨。上周，曾经负责纽约联邦储备银行的比尔·达德利也改变了看法，他说“七月降息还在讨论中”。要记得，2019年达德利也曾敦促美联储不要配合唐纳德·特朗普，这个问题还牵涉到政治。如果他们明天甚至九月降息，可能会遭到共和党的反对，对吗？当然会。

Now, as he rightly mentioned, Bill Dudley used to be the third most important person in the Federal Reserve. And he seems to really not like Trump so much so that he wrote that op-ed, which I think was very inappropriate. Now, I think these political considerations could play into how the Fed thinks. But the truth is, if you look at donation data, basically everyone who works at the Fed is a member of the Democratic Party. And a lot of people there in my personal experience really don't like a Trump. So, you know, they probably don't want to appear to be motivated by politics, but I really do think that that plays a role, and that actually makes them more likely to want to cut rates, even if it looks inappropriate. Of course, Powell is a registered Republican, but you have to really be concerned about the next administration. If they have a chance to, let's say, point at a lay-off-brainer, but we'll talk about that at a different time. I want to get your comments or your thought on this. Yesterday, we have Stephanie Pomboy on. It's sort of cost a real stir. She offered up a short-term, what she calls sort of an elegant solution, to at least to help create some demand for the insatiable treasury relationship of securities. Think of, listen, then let me get your thoughts. We still have this massive problem where we're issuing $2 trillion plus in Treasuries a year. There is a solution, and we'll see if anyone buys into it, and that is if we make treasury securities tax-free the same way that it's going to be. You would generate a huge new source of demand for Treasuries as people took advantage of the tax exempt status.

现在，就像他正确提到的那样，比尔·杜德利曾是美联储中第三重要的人物。而他似乎非常不喜欢特朗普，以至于他写了一篇我认为非常不合适的评论文章。我认为这些政治因素可能会影响美联储的决策。但事实是，如果你看捐款数据，几乎所有在美联储工作的人都是民主党党员。而我个人的经验是，很多人真的不喜欢特朗普。所以，他们可能不希望被认为是受政治驱使，但我真的认为这确实起到了作用，这实际上使他们更有可能想要降息，即使这看起来不合适。当然，鲍威尔是注册共和党员，但你必须真正关心下届政府。假设他们有机会，新政府可能会指控任用布雷纳德之类的人不过我们稍后再讨论这个。我想听听你的意见或看法。昨天我们邀请了Stephanie Pomboy，她提出了一个短期的，她称之为优雅的解决方案，至少可以帮助创造对国债关系证券的需求。先听听，然后告诉我你的想法。我们还面临一个重大问题，就是每年发行超过2万亿美元的国债。这里有一个解决方案，我们看看是否有人会接受，那就是如果我们让国债像市政债券一样免税。这样的话，你会为国债创造一个巨大的新需求来源，因为人们会利用免税的优势。

To create domestic demand for Treasuries rather than relying on foreign central banks and the Federal Reserve to finance these deficits. All right, Joe, what do you think? I think that's brilliant, really. Now, if we were to make Treasuries tax exempt on their interest, there would be tremendous demand. What we would see is interest rates would come down a lot, and that would be really risk positive. Now, I know some people will say that if you don't tax interest, that means we'll have fewer tax revenue. But Stephanie also points out that because of lower interest rates, we're actually going to be saving more money on the interest expense, so it makes a lot of sense. Now, in addition to that, I think that the huge market rally that would cause would also increase capital gains tax receipts for the following year.

为了创造国内对国债的需求，而不是依赖外国央行和美联储来融资这些赤字。好吧，乔，你怎么看？我觉得这真是太聪明了。如果我们对国债的利息免税，将会有巨大的需求。到时候利率将大幅下降，这将非常有利于风险资产。我知道一些人会说，如果不对利息征税，我们的税收收入会减少。但是斯蒂芬妮也指出，由于利率下降，我们实际上会在利息支出上节省更多资金，所以这非常有道理。除此之外，我认为这种大规模的市场涨势也会增加下一年的资本利得税收入。

So I think that's a really good idea, but one thing I'll note, though, is that this really just buys time at the end of the day. We have to cut down on fiscal spending. This is a great idea, but unless we stop the problem at the source, fewer fiscal spending, we're just buying time, taking the can down the road as we've been doing for decades at the end of the day. That there's no free lunch there. And my worry would be even if it was the most elegant solution that the federal government would just raise more money. They're going to push it to the level. Anyway, hey Joe, great talking to you, my man. It's always a pleasure.

所以我认为这是个非常好的主意，但我想指出，这其实只是暂时缓解问题。我们必须减少财政支出。这确实是个好主意，但除非我们在源头上解决问题，也就是减少财政支出，否则我们只是拖延时间，把问题往后推，就像我们几十年来一直做的那样。天下没有免费的午餐。我担心的是，即使这是最优雅的解决方案，联邦政府还是会筹集更多的钱，并把问题推到更严重的地步。总之，嘿，乔，和你聊天真愉快，一如既往地高兴。