49.80 49.80 AND EARLIER TOM LEE SAID WHEN WE SEE THE VIX PEAK COMING DOWN A LITTLE, THAT COULD INDICATE SOME KIND OF -- >> JOINING US IS CHIEF ECONOMIST AT WISDOM TREE, AND JEREMY, I HATE -- YOU PROBABLY AREN'T HAPPY TO SAY I TOLD YOU SO EITHER GIVEN, YOU KNOW, WHAT WE'RE WITNESSING, BUT YOU THOUGHT THE FED WAS STAYING -- ONCE AGAIN FOR THE SECOND TIME STAYING AT THE PARTY TOO LONG AND TOO RESTRICTIVE. >> ABSOLUTELY. THIS MAY SURPRISE PEOPLE, I'M CALLING FOR 75 BASIS POINT EMERGENCY CUT IN THE FED FUNDS RATE WITH ANOTHER 75 BASIS POINT CUT INDICATED FOR NEXT MONTH AT THE SEPTEMBER MEETING, AND THAT'S MINIMUM. THE FED FUNDS RATE RIGHT NOW SHOULD BE SOMEWHERE BETWEEN, YOU KNOW, 3.5 AND 4%. LET ME GIVE YOU VERY SIMPLE LOGIC OF MY POSITION HERE. AT THE JUNE MEETING, THE FED HAS SAID THAT THE LONG RUN FED FUNDS RATE WHEN INFLATION REACHED 2%, AND UNEMPLOYMENT HAS COME UP TO 4.2%, SHOULD BE 2.8. THAT'S THE NORMAL. 2.8 IS THE NORMAL FED FUNDS RATE. WELL, ON FRIDAY WE BLEW ACROSS THE EMPLOYMENT NUMBER. WE'RE AT 4.3. THAT EVEN ARGUES FOR A LOWER ONE. AS FAR AS INFLATION, WE'RE AT 2.5%. WE'VE GONE DOWN 90% TOWARDS THE TARGET ON THE INFLATION RATE. WE'VE OVER SHOT THE TARGET ON THE EMPLOYMENT. THOSE ARE THE TWO TARGETS EXPLICITLY MENTIONED BY THE FEDERAL RESERVE. ALL RIGHT, AND HOW MUCH HAVE WE MOVED THE FED FUNDS RATE? ZERO. THAT MAKES ABSOLUTELY NO SENSE WHATSOEVER. >> IF WE D-- JEREMY, YOU KNOW THERE'S NO WAY WE'RE GETTING 75 AND THEN ANOTHER 75. IF WE DO, I DON'T WANT TO SEE WHAT'S HAPPENING IN THE STOCK MARKET IF THE FED IS COMPELLED TO DO 75 TWICE. SO YOU KNOW IT'S NOT GOING TO HAPPEN. YOU'RE SAYING THAT THEY SHOULD. WHAT DO YOU REALLY THINK WILL -- DO YOU THINK THEY'LL DO AN -- >> THEY'RE NOT GOING TO DO 375. LISTEN, I REMEMBER 2000 WHEN GREEN SPAN DID 50. THE MARKET WASN'T SCARED. THE MARKET RALLIED SHARPLY. IT WAS THE SAME THING, DECEMBER THEY SHOULD HAVE CUT. THEY DIDN'T CUT IN THE MARKETS. YOU SHOULD HAVE, AND THEY DID AN EMERGENCY CUT A FEW WEEKS LATER, THE MARKET MADE A STRONG RALLY FROM THAT POSITION. LISTEN, JOE, DON'T THINK THAT THE FED KNOWS SOMETHING, LIKE, OH, WE'RE AFRAID THE FED KNOWS SOMETHING. SINCE WHEN HAS THE FED KNOWN ANYTHING ABOUT THE ECONOMY? >> WE DON'T NEED ANYONE -- WE DON'T NEED TO WORRY ABOUT ANYONE THINKING THAT THAT THE FED -- >> NO, NOT AT ALL. LOOK WHAT HAPPENED THREE YEARS AGO. >> IN GENERAL. THE MARKET KNOWS SO MUCH BETTER THAN THE FED. SO I MEAN, THEY'VE GOT TO RESPOND. LISTEN, THEIR OWN STATED NORMAL FED FUNDS RATE WHEN WE HIT TARGETS IS 2.8. THEY'RE BASICALLY AT THE TARGET, AND THERE'S A LAG IN MONETARY. >> JEREMY, LET'S SAY THEY DO THAT -- >> TAKE A LOOK AT ANY OF THE RULES RIGHT NOW, THEY'RE ALL OOH 150 BASIS POINTS LOWER. >> LET'S SAY THAT JAY POWELL CAME OUT AND BEFORE SEPTEMBER, AN MEMERGENCY MEETING, COMES OU AND HE LOWERS THE RATE DOES THE MARKET RIP OR DOES THE MARKET SAY OH, MY GOODNESS IT'S WORSE THAN WE EVEN THOUGHT? >> IT RIPS. IT WELCOMES IT, ABSOLUTELY BECAUSE IT'S SO FAR BEHIND THE CURVE RITE NOW. THE FED IS UP IN THE WLBLEACHER >> MAYBE PEOPLE SAY OH GOODNESS, IF THEY'RE WILLING TO MAKE AN EMERGENCY CUT TODAY, BOY THERE'S G GOT TO BE SOMETHING AROUND THE CORNER. >> IT'S NOT GOING TO HAPPEN. >> THE NEXT COUPLE OF WEEKS. >> I THINK IT SHOULD. IC I THINK THEY SHOULD SAY, LISTENING, YOU TAKE A LOOK AT THE DATA, IT IS NOT AT ALL COMFORTING. THE HIRING, EMPLOYMENT PART OF THE ISM THAT WE GOT WAS JUST ABSOLUTELY HORRIBLE. I MEAN, FORGET ABOUT THE SAM RULES AND ALL THAT THAT ARE PREDICTING RECESSION, I'M LOOKING AT THE FED'S OWN DATA ASK AND THE FED'S OWN WRITTEN POLICY. 28 WHEN WE ARE AT AND NEAR THE TARGET, THEY OVERBLEW ONE TARGET, AND THEY'RE 90% TOWARDS THE OTHER TARGET. PERIOD. >> JEREMY, THERE'S NO REASON TO THINK GIVEN HOW LONG IT TOOK TO MOVE OFF OF ZERO, THERE'S NO REASON TO THINK THAT THEY'RE GOING TO TAKE YOUR ADVICE ON THIS. MAYBE THEY DO, BUT MAYBE NOT. WHAT IF THEY DON'T, THEN THE S&P RIGHT NOW IS ONLY DOWN 6% FROM THE HIGHS. THE DOW IS ONLY DOWN 4 P%. NASDAQ IS DOWN 10. HOW DO YOU THINK THE MARKET WILL REACT IF IT DOESN'T LOOK LIKE THE FED'S GOING TO DO ANYTHING BEFORE SEPTEMBER? >> I THINK THE MARKET WILL REACT BADLY, VERY HONESTLY. I MEAN, YOU KNOW, IF THEY'RE GOING TO BE AS SLOW ON THE WAY DOWN AS THEY WERE ON THE WAY UP, WHICH BY THE WAY WAS THE WORST POLICY ERROR IN 50 YEARS, THEN WE'RE NOT IN FOR A GOOD TIME WITH THIS ECONOMY. AND THE FED HAS TO RECOGNIZE, I MEAN, I'M JUST RESTATING THEIR OWN WRITTEN POLICY, 2.8 NORMAL FED FUNDS. THEY HAVEN'T MOVED