Yahoo Finance's Brian Sozzi, Myles Udland, Julie Hyman, and Brian Cheung discuss what to watch out for in today's Fed announcements.
JULIE HYMAN: What are you watching for, Brian?
BRIAN CHEUNG: Well, Julie, with the election, it seems like a lot of people forgot that there even is an FOMC Federal Reserve decision this afternoon. But that's the reason why I'm even wearing a jacket on this program right now. We do expect a statement at 2:00 PM followed by a press conference at 2:30. And [INAUDIBLE] is really going to be that press conference, no major announcements expected.
But I still have a top three takeaways to be watching for in that press conference. Call it the FOMC3, if you will. So starting things off with number three, the big question, can the economy go without fiscal stimulus through January? We've heard Mitch McConnell already expressing some interest in maybe getting something done. But if that isn't the case with the rising cases, can we really wait that long?
Coming in at number two, has the Fed's forecast of the economic recovery gotten better since September? So, unfortunately, this meeting in November, we won't necessarily get any sort of dot plot projections. We'll have to wait until December to get that. But regardless, has the Fed seen things get better since its last meeting?
Clocking in at number one, the biggest question here is, really, is the Fed prepared to ramp up or adjust quantitative easing? And as a bonus question, what would Jay Powell say if he were to get some sort of renomination as Fed Chair when his term does expire in February of 2022?
On the first point, it does seem like a lot of expectation on the Street is for the Fed to use this meeting to tee up a ramping up its $120 billion a month pace of asset purchases or maybe targeting on the longer end longer dated securities in that December meeting. But again, something worth watching and, obviously, the political undertones.
Could you imagine if we get the election results or some media outlet actually calling the election during this meeting? It could be interesting to see if the Fed chairman bites on whether or not he would take a second term, depending on what the outcome of the election ends up shaking out like.
MYLES UDLAND: Well, Brian, as you know, it's a tough dance. You know, you get one question for the Fed chair eight times a year. Do you want to waste it on, who do you think the next president is going to be, considering we know he's not going to answer the question.
So I guess if we go back to your point about the Fed's forecast of the economy, do you think Powell is going to change some of his tone with respect to the recovery, considering I think the more durable data we saw in September or October.
I mean, the economy, I think, outperformed expectations kind of any way you slice it because people saved a lot of the CARES Act, and they're kind of running that down. Do you think that's going to cause him to view things more positively, or is he going to be sort of as concerned as he's been for the last couple months?
BRIAN CHEUNG: Well, I think that the Fed chairman would be in line with what other Fed officials have said since that last September meeting, at least in public in March, which is that they've been surprised about the durability of this recovery so far, that data really does seem to confirm that, whether or not you're looking at [AUDIO OUT] as good as they look.
The question is really going to be whether or not the fiscal policy is going to be there and put in place. I think that's something that we've heard Fed officials hammer very hard in the past few months, which is that, really, the Federal Reserve could try to do more quantitative easing, but that doesn't put money into the pockets of those households and those businesses that really need it to bridge the gap, especially if we are headed for a cold winter.
We talked with the Chicago Fed president at the beginning of October. He was saying, yes, I've been surprised at how well the data has come in, but a pretty sobering reminder that he also added, which is that a lot of people have also died during that period of time. This is still primarily a health pandemic. And the fact of the matter is we have not controlled the virus here in the United States. And that will continue to weigh on the economy in some form.