 It is Fed Day. I'm Scott Gamm for the street on the floor of the New York Stock Exchange and we have no right hike for the Fed's September meeting, but we did get a big announcement on the balance sheet here now is Kenny Palkari. Alright, so October is when those assets will start rolling off the Fed's balance sheet. Right, so it's a passive tightening, right, because what they're going to just allow those assets to do is mature and take them off. They're not actively selling them, they're just allowing them to mature and then take them off the balance sheet, so that's more passive. That's exactly what the market expected. It's exactly what they talked about. The $10 billion a month is exactly what they said, so no surprise there at all. No surprise, but still, the Fed has never done this before. We're seeing the S&P 500 down slightly, 0.1%. That's right. But still, this is a big adjustment for the market. Well, of course it is, because look, we've spent 10 years getting ourselves into this very extended position and so now this is the beginning of quote-unquote normalization, right? So no one really knows what it's going to feel like, what it's going to be like, and so Janet Yellen, as expected, is going to take it slow. $10 billion a month might sound like a lot, but in the scheme of things, $10 billion is not a lot. I think that's exactly right that she wants to take it slow to see how the markets react, how global investors react, how other central banks react, and so therefore, in that sense, the market is not surprised. I think what the market may be surprised about why we're seeing the market go from slightly positive to negative now is that there's still that indication that there's going to be a December rate hike, which would be a third one in 2017. I'm still on the side of the camp that says no rate hike. I don't think they're going to do it, yet from what I've seen so far, the headlines seem to suggest that they are maintaining that call. And I think the market's not so sure that that's actually the right thing to do. They're maintaining their forecast for 2017, 2018. They downgraded 2019 a little bit, but that's so far in advance. Right. It's two years out. I mean, listen, so much can change in six months. But here's the real problem for the Fed, of course, is weak inflation, although the Fed acknowledged that these storms that we've been seeing in Florida and Texas could bump up inflation for the remainder of the year. That would perhaps make it easier for the Fed to hike in December. Well, it might make it easier, but I think that's also, you have to understand where that's coming from. That bump up inflation is a result of those two events, not necessarily organic inflation, which is really what they want, right? They've wanted this organic inflation to 2% or a little bit better than 2% in order to justify that argument. If we see inflation jump as a result of these two hurricanes, that's not so organic, and therefore you could make the argument that the Fed shouldn't do anything, especially because, look, there's been a lot of damage done, right? And so the last thing you want to do is make money more expensive, especially at a time when all this reconstruction has to happen. Well, the Fed is very quickly to point out the reasons for weakening inflation as one-off factors, so they should at least acknowledge the one-off factors on the way up. Well, and they did, and that's fine. I think, though, in the bigger scheme of things, I don't think that's the right argument for a December rate increase, and I'm still in the camp, we're not going to get one. All right, let me ask you, though, about the markets. What is your outlook for the remainder of the year? I mean, is the Fed still in play here in terms of moving the markets either way? Yes, the Fed's going to always be in play just because of where we are in terms of the balance sheet. It's so big. So, absolutely investors, global investors, U.S. investors will continue to pay attention to what she says, how she says it, maybe read between the lines if she's a little bit more hawkish versus dovish, right? That being said, we're coming right into earnings season now in a week and a half or two weeks. We're going to start to see how those numbers are playing out, and that's going to be the next real driver of the markets, because ultimately what the Fed says and the policy they set will affect the markets, but profits and earnings and growth rates is really what's going to price stocks as we move out. So, does that push us higher beyond 2504 in the S&P 500 by year end? By year end. This is a kicker. I think we're going to run into a little bit of difficulty in the weeks ahead as we go through earnings season. And in December? And again, December because you get the debt ceiling again, although I think they're going to push that out again. But I do think that by the end of the year we'll be slightly higher. I don't think we're going to be too much higher, but I would imagine we're going to be somewhere in the 25-25 range. And a correction along the way or no? Yeah, I think in October we're going to see a pullback. I actually thought it was going to come in September. Right. What happened? Well, it's still May. It's only September 8th, 19th, right? We've got another week and a half for September to happen. If not October, I think as we move into earnings season and as we get another round of macro data and we really see how it's coming together, now in light of the Fed passive tightening as well as a potential interest rate increase, I think, then you're going to see some volatility. All right. Kenny Pocari, we'll leave it there again, everyone. No rate hike in September. And we did get news from the Fed that that balance sheet unwinding process will start in October. Kenny Pocari, thank you as always. You're very welcome.