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Fed Chair Powell set to speak today

Yahoo Finance’s Brian Sozzi, Alexis Christoforous, and Brian Cheung discuss what to expect from Fed Chair Jerome Powell’s speech today.

Video Transcript

ALEXIS CHRISTOFOROUS: Federal Reserve Chairman Jerome Powell is set to speak later today at Princeton University's Griswold Center for Economic Policy Studies, and our Fed correspondent Brian Cheung is joining us now for a preview. So, Brian, the Fed's coronavirus-era programs, I guess we can call them, are going to be coming to an end soon. So what do you expect this speech or this Q&A, really, to be about this morning?

BRIAN CHEUNG: Well, Alexis, actually the Federal Reserve still has a number of its facilities that it has yet to even set up-- so things like the municipal liquidity facility and the primary market corporate credit facility, things that address municipal debt, and then also corporate credit, respectively. But you also have the Main Street lending program, that major program that the Fed wanted to use to offer cheap loans to businesses that might even be larger than those that were targeted under the Paycheck Protection Program. The Boston Fed still has yet to stand that facility up, although it seems like they are getting a little bit more traction on as the Boston Fed did release documentation for potential applicants just this week.

But in focus for Powell will really be a few things. First of all, what other tools could he use on a monetary-policy front if there were to be more of a adverse effect on the US economy, things like forward guidance, things like yield-curve control, or things like more guidance on where it's going with its $7 trillion balance sheet as it did cross that landmark just last week. So any sort of clues from Jerome Powell's appearance today will be really critical as we head into that Fed meeting on June 9 and June 10.

Keep in mind that after Chairman Powell's presentation today with Princeton-- which, by the way, will not have prepared remarks-- the Federal Reserve officials will go into their normal blackout period, which actually leads up in the week to that FOMC meeting, and then we won't hear from them until they make that June 10 announcement.

Again, though, that appearance from Jerome Powell will be today at 11:00. We'll carry that here on Yahoo Finance.

BRIAN SOZZI: Brian, a lot of the folks I've talked to on the Street suggest that the next Fed meeting may be somewhat of a nonevent. If anything, the new projection materials might garner some headlines.

BRIAN CHEUNG: Yeah, absolutely. The projection materials are going to be a little bit of a tightrope for the Federal Reserve to walk when you consider that those projections-- usually they refer to the dot plots, right? It's a kind of graphical representation of where the various members of the Federal Open Market Committee see the possible federal funds rate being in the next few years. Right now, obviously, with all the uncertainty around the coronavirus and whether or not the Federal Reserve will be able to engineer a quick rebound out of this for the US economy, a lot of policymakers are saying I don't really know if my forecasts are going to be all that accurate.

So the Federal Reserve did say it will publish those SEPs, what they call the Summary of Economic Projections. But again, I think it might be expected that in the press conference that Jerome Powell will have [INAUDIBLE] that there could be some technical challenges in the way that they message that with a lot of Fed [INAUDIBLE] saying, hey, don't pay too much attention to those dot-plot projections.

ALEXIS CHRISTOFOROUS: All right, Brian Cheung, thanks as always for a little insight into what we might hear from Jerome Powell later.

And as Brian mentioned, we're going to be carrying that event live for you here beginning at 11:00 AM Eastern on Yahoo Finance. And also Jerome Powell is going to be speaking with the former vice chair of the Board of Governors of the Federal Reserve, Alan Blinder. So it should be a good conversation there.

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