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The Larry Kudlow Show Covering: Fed, Joe, woods, Larry, Ray, Yellen [Dec 19 2015]

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Chip Somodevilla
Automatic TRANSCRIPT This transcript was automatically generated by AudioBurst technologies

I'm gonna argue that in an traditional Fed watching terms IT interest rates as Wall Street does what the Fed really sad and I think people took a second look at this and said whoa wait a minute the fact that she was tight it was a tight announced Joe because what they say they're going to be for rate hikes in twenty sixteen another four in twenty seventeen and another four in twenty-eight to know woods once a quarter they're gonna raze their target rate whether it's fad funs rate worthy excess bank reserves right and you know that's gonna get sheets about three and a half percent next react set so Joe I mean I think right there is an issue i think the markets' completely missed interpreted what the Fed is the Fed has a lot more hawkish right now then folks originally thought about it yeah maybe Larry and that certainly possible I mean they I've been writing and talking a clients about the fact that if you look at what the Fed's projections were in September some likely they were changing much at all in December meaning growth inflation unemployment in their for their interest rate trajectory would look a little different an effectively that CK they they kept three two thousand sixteen median forecast on change they lowered seventeen a little bit eighteen even lasting longer term they didn't change so you're description roughly of once a quarter for the next three years is it is it is exactly correct but more simple terms the market right now is telling you that the Fed is going to stop the funds rates somewhere around two percent maybe even slightly last the Fed Italian that's gonna take race to at least three and a half percent right so perhaps what happened over the past few days is free the market sort of had a catharsis and saying wait a second where we expect the funds Ray could be in where the fed is is wildly different and her out an an guess what happen the mark and toll-free I've so everyone in so I off right so the feds but another would say Larry is the market fuel gradual is a lot different right now I'm like Yellen let me just I just got thirty seconds on one of those are all I could say as with two percent are last economic growth at zero inflation i don't know why the Fed has the raze their target rates have one supporter for the next three years real quick lecture tape i don't think I am whatever they want and we did have about group working on Friday i wouldn't take.