SPECIAL REPORT: Reaction To Today's Fed Announcement | Axel Merk + Live Q&A

**Adam Taggart** (0:02)
All right, and we should be live. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Taggart, welcoming you here after another FOMC release and Jerome Powell Presser. I am joined as usual by Fed Watcher and head of Merck Family of Funds, Axel Merk. Axel, how are you doing today, my friend?

**Axel Merk** (0:22)
I do great. Great to see you in Nevada. Really want to hear everything about the Reno.

**Adam Taggart** (0:32)
Okay, folks, I will spill all the tea on that soon, but not today because we have a lot to get through. I am traveling, as you can tell by the different background. Well, actually, lots to talk about the whole Reno move, but yes, different location today. About to catch a flight in the next 36 hours or so to Ireland for all of next week. So lots going on here. Bear with us. We started a minute late because we were trying to troubleshoot an echo issue on Axel's end. I think we've got it more or less under control. If you're hearing an echo on your folks' side, just let us know. We'll do our best to deal with it. I am hearing folks are saying you are echoing a little bit, Axel. You know, we had this issue with Stephanie Pomboy a little while ago. I'm not sure why this is going on. Well, we're going to try to soldier through this as best we can, folks, especially because I have been traveling, not only traveling, but getting interviewed today and doing interviews, Axel. So I didn't get a chance to watch the Jerome Powell press conference. Folks, as you know, I normally do my write up afterwards of that, and I go back and forth with Axel on my interpretations versus his. I'm going to have to rely heavily on his expertise today because I'm coming at this with seeing almost no news, Axel, except I know they kept the Fed funds rate steady, which everybody expected them to do.
Presumably, they didn't touch QT. I'm not sure if I saw anything on that, but presumably they didn't touch the pace of QT. You're shaking your head. Okay. And then I started reading your ex feed on this, and you posted a picture of deer in the headlights. So I guess let's start with this question. Is the Fed being prudent and patient here or is the Fed too late?

**Axel Merk** (2:19)
Well, the Fed, as we have discussed many times, does not have a profit. And that's really the problem right now, that the Fed sees that inflation might be going up because of the tariffs, but at the same time, the service inflation is going down because the economy is going down with the higher rates. And they don't have a deal with it. I will refer to it as a fly shock, as a reminder, as a fly shock, And they make weird illustrations. And so they want to go away from the table more. And when he was asked specifically what he's looking for, he didn't give a straight answer. He talked about the quote unquote totality of data and other things. And so he basically didn't give a good answer. And so that's why the market interpreted to be hawkish, because they are like, there's an headline. They are worried about doing anything, because they're worried they might be doing the wrong thing. And the reason I don't answer your question is because I question their framework. If within a given framework, you kind of, yes, you could be early or late. Ultimately, the problem is they don't want to be seen as flip-flopping.
And so they want to state a course, a good way of phrasing it is they want to be patient. But of course, the economy is moving on. And by definition, they'll be late if they wait for all the beans to be spilled before doing anything.

**Adam Taggart** (3:59)
Okay. And Axel, just real quick, I think I found a triage to our echo issue. So I muted myself while you were speaking. That seemed to end the echo on folks' part. What we might want to do here is a little back and forth, which is when I'm talking, you might want to mute yourself and hopefully that fixes the echo, at least band-aid-wise, here for folks. I see you've done that. Okay, thanks. All right.
So where to start? Let me address the red line of the FOMC decision. Because the thing that caught my eye there, separate from just sort of the short-term drama of the two dissenting governors, and that's the first time I think there's been two people dissenting on the FOMC committee since like 1993 or something like that. But they changed the text.