March 2025 FOMC Debrief

Hello my friends, today is March 19th and this is my FOMC debrief. Now today I'm in the city for a conference with block works and I just got off the set with Charles Payne, so I'll post that video later. But before we go into what actually happened today, let's level set a little bit. Now today is one of those special quarterly meetings where we got a dot plot. Now the last time we got a dot plot was in December and at that time the Fed was penciling in two cuts this year. But between then and now of course a lot of things have happened. We have all sorts of policy changes, the stock market tanked and of course the data has come in a little bit softer than expected. So how was the Fed going to treat all of that? Well the dot plot today again penciled in just two cuts this year.

你好，我的朋友们，今天是3月19日，这是我对FOMC会议的简要回顾。今天我在城市参加一个与Block Works有关的会议，我刚刚和查尔斯·佩恩一起录制了节目，所以我稍后会发布那个视频。但在我们深入探讨今天发生的事情之前，先来做个背景介绍。今天是季度中的特殊会议之一，我们得到了一个利率预测图。上次我们得到这个图的时候是在12月，当时美联储计划今年会有两次降息。但从那时到现在，发生了很多事情。政策发生了一些变化，股市大跌，经济数据也比预期稍差。那么美联储会如何应对这些情况呢？今天的预测图上再次预示今年仅有两次降息。

Now there was some debate as to whether it be three or one and so forth but they're keeping their forecast from December. But at the same time the median FOMC member marginally revised lower their GDP forecast, marginally revised higher their unemployment forecast and marginally raised their inflation forecast for the year. Now later on in the press conference which your pal will say is that well they were really concerned about growth and really concerned about inflation and so that just kind of canceled each other out so they just kept their medium to cut forecast for the year.

现在，有一些争论关于是否是三个或者一个之类的问题，但他们还是保持了12月的预测。同时，美联储决策者的中位数预测略微下调了他们对GDP的预期，略微上调了他们对失业率和通胀率的预期。在随后的新闻发布会上，您的朋友会说，他们实际上对经济增长和通胀都非常关注，所以它们之间的影响基本互相抵消了，因此他们保持了对今年中期的削减预测。

But what was really interesting about this meeting though was surprisingly the Fed decided to do something with their balance sheet policy. Now we've discussed in the past before that the Fed was thinking based on the minutes of potentially pausing QT due to the debt ceiling issue. So when the government is under a debt ceiling it can no longer issue debt. So what does it do to finance itself? Well when that happens it starts spending down the money it holds in its checking account. Now right now the TJ is around 700 billion dollars. Historically speaking when we have a debt ceiling issue then the Fed's then the government starts spending that down to maybe 50, 20 billion.

在这次会议中，真正有趣的是，美联储决定对其资产负债表政策采取一些行动，这一点令人惊讶。我们过去讨论过，根据会议记录，美联储可能考虑由于债务上限问题暂停量化紧缩。当政府达到债务上限时，它无法再发行债务。那么，它如何为自身融资呢？当这种情况发生时，政府会开始动用其支票账户中的资金。现在，财政部大约有7000亿美元。历史上，每当出现债务上限问题时，政府会将这笔资金消耗到可能50亿或20亿美元。

So that is a big amount of money that goes out of the TJ account and into the banking sector. That's not a problem of course you know I mean money is lashing around from the TJ to the banking sector. The problem arises when the finally the debt ceiling is resolved then what happens is that the government suddenly issues a whole bunch of debt in a short window to try to rebuild the TJ. Now the government wants to have a certain amount in the TJ 700 billion something like that and so once the ceiling gets resolved it's going to flood the market with a whole bunch of bills and the money that they raise through the bills will go to the TJ to go back to top it off again.

所以，有一大笔资金从TJ账户流出，流入银行业。当然，这没什么问题，我的意思是，资金在TJ和银行业之间流动。问题出在债务上限最终解决的时候，政府会在短时间内突然发行大量债务，试图重建TJ。政府希望在TJ中拥有大约7000亿的资金，因此，一旦债务上限得到解决，他们就会向市场大量发行短期国库券，通过这些国库券筹集的资金将用于补充TJ账户。

That movement is going to represent a huge sucking sound of liquidity out of the banking sector into the TJ. Now Fed officials have been worried that with reserve levels you know relatively low maybe that huge movement of a few hundred billion out of the commercial banks commercial bank accounts into the TJ might cause some friction in the financial system and because of that they've been a bit more sensitive to the impact of QT. We talked about pausing it or stopping it at their meeting but this time I guess what they decided was just significantly tapered.

这次的资金流动将会把大量的流动性从银行业抽走，转入财政部账户（TJ）。美联储官员担心，由于银行准备金水平相对较低，这数千亿资金从商业银行账户转入财政部的巨大流动可能会引发金融体系的某些摩擦。因此，他们对量化紧缩（QT）的影响比较敏感。在会议上，我们讨论了暂停或停止QT，但这一次看来他们决定大幅度减缓QT。

So QT has been tapered for treasuries from 25 billion a month to 5 billion a month and that's a huge huge cut and you might as well say QT ended. Now they're going to leave their MBS continue to let it run off but MBS hasn't been running off that much because a lot of the people have very low mortgage rates and there are not only prepayments. No one is trying to refi out of a 3% mortgage rate to 7% mortgage rate. So basically for intents and purposes I'd say QT basically ended and the bond market seemed to like that we saw rates rally a little bit.

QT（量化紧缩）已经从每月削减250亿美元的国债缩减到50亿美元，这是一个非常大的削减，可以说QT基本上已经结束了。现在，他们将继续让MBS（抵押贷款支持证券）自然减少，但由于很多人享有非常低的按揭利率，因此MBS的减少并不多，而且几乎没有提前还款。没有人会愿意把3%的按揭利率转换为7%的利率。因此，基本上可以说QT已经结束，债券市场对此似乎比较满意，我们看到了利率小幅上涨。

Now the second thing that I thought was pretty interesting about the conference was how was Chair Powell and the committee thinking about the massive surge in inflation expectations. So again one of the more, so if you want to economist school you are trained to say that inflation expectations is really important in determining actual inflation because if you expect inflation to be high then you go out and you buy stuff now because it's cheaper to buy now than say next year and that burst into demand will actually raise actual inflation.

现在，我认为这次会议中另一个相当有趣的事情是鲍威尔主席和委员会如何看待通胀预期的大幅上升。经济学教育强调通胀预期对实际通胀的重要性，因为如果大家预期通胀会很高，他们就会倾向于现在购买东西，因为相比于明年，现在购买更便宜。这种增加的需求实际上会推动实际通胀上升。

So these classically trained guys all care a lot about inflation expectations. As we know from surveys inflation expectations for consumers have been rising a lot especially for those who are Democrats. The University of Michigan is serving Democrats and they're like they have inflation expectations when you're forward of like 6.5% for Republicans. That's like the surveys returning like 0.1, 0.2, very low readings. So there's a high degree of polarization when it comes to inflation expectations but overall on the short term they've been rising.

这些受过经典经济学训练的人都非常关注通胀预期。正如我们从调查中了解到的，消费者的通胀预期一直在显著上升，尤其是在民主党人中。密歇根大学的一项调查显示，民主党人的通胀预期一年后大约是6.5%，而共和党人的调查结果显示非常低，仅为0.1或0.2左右。因此，在通胀预期方面存在严重的分化，但总体来看，在短期内通胀预期上升。

So does this mean that the Fed is hamstrung they can't cut anymore because inflation expectations are getting unanchored? Well Chair Powell actually pushed back against this pretty, pretty determinedly and noted that whereas short term inflation expectations are getting a bit unanchored the longer term expectations are well anchored. So he's looking at surveys of and market based measures of inflation. He thinks that longer term expectations are anchored so he's really not concerned about the short term inflation expectations volatility.

这是否意味着美联储受到限制，无法再降息，因为通胀预期正在失控？事实上，主席鲍威尔对此进行了相当坚定的反驳，并指出虽然短期通胀预期有些失控，但长期预期仍然很稳定。他查看了通胀的调查数据和基于市场的指标，认为长期的通胀预期是稳定的，因此他并不太担心短期通胀预期的波动。

Any things that you know it kind of makes sense for short term inflation expectations rise a bit because we have tariffs and that's kind of like a change in the price level. Now related to that Chair Powell was asked about whether or not he's still thinking about looking through tariff price shocks as transitory because you know that's what you do if you are a classical trade economist. Raise the price level, a discrete rise in price level but it doesn't change the rate of change of prices so it doesn't change inflation basically it's transitory.

翻译：有些事情让人觉得短期通胀预期上升是有道理的，因为我们有关税，这是对价格水平的一种改变。对此，美联储主席鲍威尔被问到他是否仍然认为可以将关税导致的价格冲击视为暂时性的，因为如果你是一个传统的贸易经济学家，这就是你会做的。也就是说，虽然价格水平上升了，但只是一次性的上升，并没有改变价格变化的速度，所以基本上不会影响通胀，它是暂时的。

In the past people have talked about this as you know because tariffs are a one time shock to the price level it's transitory we don't really need to do anything. Now Chair Powell seemed to be a little bit less committed to that you know basically let's look and see so he wasn't really sure what to do about that. So he did explicitly note that we got these four big policy changes happening in the world fiscal policy, immigration policy, regulatory policy and of course trade policy so he does seem to be wanting to do a wait and see attitude.

过去，人们谈论这个问题时，认为关税对价格水平的影响是一种暂时性的冲击，因此我们不需要特地采取行动。然而，鲍威尔主席现在似乎对这一观点不再那么坚决，而是采取了一种观望的态度。他明确指出，全球范围内有四大政策变化正在发生，包括财政政策、移民政策、监管政策以及贸易政策。因此，他似乎倾向于等待观察形势的发展。

Now he was also asked about you know we have these enormously downbeat consumer sentiment consumers are concerned about their jobs and their personal financial conditions. Chair Powell is very dismisses about that he was suggesting that you know a lot of people say these are pretty downbeat in the surveys and then they turn around and they go buy a new car. So he's saying and what we've noticed in the past is that the soft data, the survey data really has not been very accurate in predicting the hard data and the Fed strongly prefers the hard data which Chair Powell referred to as real data.

现在他也被问到了这个问题：我们有非常低迷的消费者情绪，消费者对他们的工作和个人财务状况感到担忧。鲍威尔主席对此表示不以为然。他暗示，很多人在调查里说这些情况非常低迷，但他们转过身来就去买一辆新车。他的意思是，我们在过去注意到，软数据，也就是调查数据，在预测硬数据方面实际上并不准确，美联储更倾向于硬数据，也就是鲍威尔主席所称的“真实数据”。

So at the moment it just seems like he's not really concerned about the upward shift in consumer expectations, inflation expectations or the downbeat consumer surveys. Really he is just going to just sit and wait, see what the policy is going to do and then he's going to react to it. So that's what happened today and you know my best guess of course the market is rallying today. Again I think it's perceived that if you have a you know stopping of QT that's easing policy on the margins, bond market is lacking as well.

所以目前看来，他似乎并不太关心消费者期望的上升、通胀预期的变化或悲观的消费者调查。他的策略就是先观望，看看政策会带来什么影响，然后再采取行动。这就是今天发生的事情，而且显然，今天市场在反弹。我认为市场的反应是因为他们觉得如果停止量化紧缩（QT），在某种程度上就相当于在放松政策，债券市场的表现也在支持这一点。

Some of it is also options hedging again. People put on hedges and heading into an FOMC meeting, nothing big happens to take those hedges off and that's usually a big boost for the market in the short term. But really it's all out of the White House now. The Fed is going to be very very reactive. So for what happens in the next kind of markets, you've got to pay attention to what President Trump says. All right that's all I prepared. Talk to you guys this weekend.

其中一部分原因是期权对冲。人们在准备对冲然后参加美联储会议时，如果没有重大事件发生来解除这些对冲行为，通常会在短期内对市场产生很大推动力。但实际上，现在所有的焦点都在白宫。美联储会非常非常被动反应。所以，想知道下一步市场如何走，你需要关注特朗普总统的言论。好了，这就是我今天准备的内容。周末再和大家交流。