SPECIAL REPORT: Chaos At The Fed? Record Dissents In Powell's Last Meeting | Axel Merk

**Adam Taggart** (0:01)
And we should be live. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Taggart. Welcoming you here for another one of our special reports, processing the recent Federal Reserve release, as well as the Jerome Powell subsequent press conference. Doing that for us as usual is Fed expert and watcher extraordinaire, Axel Merk of the Merk Family of Funds at Merk Investments. Axel, how are you doing?

**Axel Merk** (0:28)
Good, good, good, good. If I hesitate your moment, as we're talking here during market hours, a little bit after the FOMC meeting, Powell is in fact still talking, and I've just noticed some market moves that will dive into probably. But yes, already to talk about the Fed and just to take a step back. The reason we care about the Fed is not because we love what the nuances mean, but because they have the bazooka. They can move markets. It impacts what we do. So we are nerds for a reason.

**Adam Taggart** (1:04)
All right. Well, I get to preface today's conversation with both a big thanks and an apology to Axel. So folks, we normally do this at 2 PM Pacific, 5 PM Eastern. We're doing it a few hours early today, this time around, just because of constraints I have in my schedule. Axel was kind enough to agree to come on and do that, even though he still hasn't listened to the full Q&A of the Jerome Powell press conference. So there might even be some breaking developments as we talk here.
But actually, I appreciate you very much being willing to do that without having 100 percent of the information yet here. That being said, I think we've got the majority of it. Folks, I'm coming into this cold. I've had meetings all day, so I haven't really seen anything else except that, A, the Fed kept things flat, so rates are unchanged.
B, there I think were a record number of descents this time. I didn't even know what direction they were in, so hopefully, Axel, you know. And then third, right before I hopped on here, I saw the odds of a rate cut in 2026 start plummeting on polymarket. So that's all I know so far. What other gaps can you fill in here from what you've taken away?

**Axel Merk** (2:19)
Well, we have a 48.5% chance of a rate hike by April of next year right now. So to just take that conclusion, so to speak, up front.
Yes, we had the one expected descent to cut, and that was as in the past by Stephen Miran.
But then we had three descents, and they were okay with where the rates were, but they did not approve of the easing bias that's persistent. Indeed, the lead journalist of the Wall Street Journal, Nick Kimiros, that covers the Fed extensively, he wrote a long article earlier today. And he, I'm just thinking here for the words.
In the current statement and in the previous one, it says, in considering the extent and timing of additional adjustments. So the word additional adjustments suggest that there will be cuts. And Powell was asked, why is that language in there? And he said, good question. And then he gave a really poor answer, that he didn't feel like there was any rush. The problem, there are many problems with that statement. The first one is that it's forward guidance. And incoming Fed Chair, Warsh, thinks forward guidance is a bad idea. This is a form of forward guidance. The second one is, the world has changed, dramatically so. And so the longer you keep it there, the more you kind of are in a corner, and then you have to say, sorry, I didn't mean it. The reason why you don't want to take it out is that you don't want to shock the market, saying, oh yeah, let's keep everything as it is. But that's really the idea is why it's bad to put it in there in the first place. And so they shouldn't say stuff that they'll regret afterwards.

**Adam Taggart** (4:17)
I guess Powell doesn't really care, though, because it's not him that's going to regret it, right? It's going to be Warsh's problem.

**Axel Merk** (4:23)
So let's talk about it. So you said you haven't listened to it. So one piece of news that you may not have heard yet is, Powell is not resigning. He is staying on. And there are a few things. So he's going to resign, or his term as chair is going to come to an end. This was his last presence. You know, I'm getting censored here by my camera.
The question was whether he would give up his role as Fed governor, because that term continues.