Hey everyone me kevin here in this video we've got to talk about what's going on in the markets this morning, specifically what james bullard said on cnbc give a brief review of this. This emergency meeting this morning at the fed, we'll talk about that. We'll talk briefly about btc, but mostly we need to talk about a couple very, very important things, especially as they relate to oil, commodities, ukraine and, of course, what's safe during a recession. And how long could you really spend talking about a recession to where it finally makes sense to say you know what recession's not coming? That's what we're going to talk about in this video we're going to go deep, so, let's go first, we've got to understand the federal reserve, the federal reserve, no matter if you are a hawk or a bull, does not want to upset markets.

One thing that the federal reserve does: is they look at what the market is pricing in to determine whether or not they are going too far with their policy action? And this is really important because we know that on march 16th the federal reserve is expected to raise rates. So it's coming up in just about a month now. But what you could do to monitor this to see what's most likely is you can actually look at the fed rate monitoring tool if you, google, that you'll get an investing.com link, hashtag, not sponsored this video is sponsored by ftx via the link down below which we'll Talk about in a moment, but now by investing.com, but anyway, investing.com has the fed rate monitor tool and if you haven't done this yet you should really know this resource, because it shows us that right now, markets are pricing in a 64 probability of a 50 basis. Point hike in march, which is substantially higher than the previous week's probability of 29, so we're seeing this increasing probability of that 50 basis.

Point height. This right here is like giving permission to the federal reserve to do a 50 basis, point hike. Now there are sometimes times where i've seen this number go to 99 and when this number goes to 99, the fed comes out and they're like oh well, we don't want to shock markets. You know we want the market to price in too much certainty in higher rate hikes, because if inflation comes in low on march 10th, then then maybe they'll go for the 25 basis point one.

So what they ultimately want is the numbers here to align with their policies and sometimes if their policies change markets are going to react. So, for example, in i'm sorry in december, the federal reserve told us we think we'll get to a point. Nine percent interest rate by the end of 2022.. Well, look at this folks, less than three percent.

I'm sorry point: three percent of the market is pricing in point nine percent, uh from from the rate hikes expected from the federal reserve this year. This means the market has moved substantially away from the federal reserve's forecast that interest rates will be 0.9 percent at the end of the year. In fact, basically, 99 percent of the market thinks rates will be over one percent by the end of the year with one third of the market thinking that rates will be around two percent uh or slightly above or slightly below, actually probably more, like. Seventy percent thinking rates are going to be right around two percent, since this almost looks like a little bit of a median here median point somewhere around here.

This one point: seven, five, two percent range anyway. This is a tool that the federal reserve uses to evaluate. Okay, what do markets think and does that align with the action we want to take and if the market is being too, let's say if the market's not pricing in enough rate hikes, the federal reserve could just send somebody out like bullard, which they did last week. This is all coordinated, it's all coordinated to play you, okay, they send out bullard going.

You know what i could see one percent by june, and then you know, uh jerome powell and all the other folks at the fed are just like this hmm studying to see how the market responds. What they don't want is bullard to come and say one percent by june, and then s p 500 to drop five to ten percent right then they're like whoa, whoa, okay, we got ta dial back so in a weird way. They play the market before actually acting. So that way, ideally, when they do act, it's not so much of a shock and then they can't be blamed as much it's kind of wild, but anyway, these are important tools to monitor and the fluctuations here now, a big thing that is also affecting all of This is oil, but before we talk about oil, i do quickly want to just mention that btc has been really a lot less volatile than tech stocks lately, in fact, if we jump over to ftx sponsor link in the description down below where you can get yourself, Some free cryptocurrency, if you sign up by that link, check it out anyway, if you take a look at uh at ftx here we continue to bounce off of our 42 000 level, and bloomberg did a piece this morning talking about how uh bitcoin has only moved.

One standard deviation this year once whereas tech stocks have moved in a range of one standard, deviation more than eight times this year. So far, so in a weird way, you're actually seeing more relaxation at bitcoin than you are in tech stocks, which is also kind of wild to think about okay. But what we've got to talk about is the oil trade, because the oil trade has everything to do with what the federal reserve might end up acting on uh and uh. It has to do with our tax stocks or any of the stocks that we're investing in.

Why, well, as we were talking about in the course member live stream this morning with which, of course, if you're not part of the course member live streams, yet consider checking out the links in the description down below to join them, you get lifetime access, so you Buy once and if you want to check out with paypal, you could pay in four if you wanted a payment plan, there's no payment plan outside of the courses for the actual live streams. It's probably my most common question that i get and the reason for that is, we thought you know. Even if we charge 50 a month or even less per month, you would hit this breakeven point and then the live streams would cut off or or you'd have to keep paying more money right. The beautiful thing about just buying one of those programs is you pay once and you get lifetime access so forever.

However long i decide to do live streams, you get access that entire time, whether that's one year, five years, ten years, i have no idea. I have no plans to stop the course member live streams. I've been doing these for almost four years now to some degree, so anyway, check that out via the link down below there is a valentine's day, coupon code as well today's valentine's day so check this out. Okay, folks uh - and i tell you this - is not sponsored by investing.com; maybe it should be, but anyway, investing.com has has an app that gives you real-time data on commodities.

Here, for example, you can see gold's up about 1.3 right now, but what you really want to pay attention to is right. There, wti and brent crude oil - these two here and what we saw in the pre-market, was actually some price increases in these here. In fact, if we go out, let's see if we go out to the week over here, we saw wti approach 95. Here we saw a similar price.

Action on on brent brent tends to be a little bit pricier, though they've been getting pretty close together and one of the things that's interesting about oil is oil, goes up the more we have drama with ukraine, or not necessarily us, but europe, ukraine and russia. The more there's drama there, the more oil seems to pump oil seems to dump when things sound like they're getting better, and today we actually got news that things might be slightly better, and that is because the foreign minister, sergey lavrov, mentioned a plan, a diplomatic plan To putin outlined his plan detailed his plan, detailed that hey once we complete some military operations, we can remove some troops from the border and guess what putin said he said all right. It was probably more like all right. I can't do great russian right now, uh or probably ever but anyway, uh this.

This helped oil settle down a little bit and, in my opinion, it's actually giving rise to why we're seeing uh a lot of tech stocks actually move in the green today, for example, if you look at tesla tesla no surprise look at it bounce off of our 880 line over and over and over again so good little moves here on the tech trade. If the tech trade does continue today, it could create some opportunities for some individuals to start shorting or selling some of these tech trades again and then buying potentially safe haven assets, either shorts or going into something like gold. Remember and we've got to talk about recessions. Here, which we'll do that in just a moment, but remember folks in a recession, there's there's really very little.

That is safe and we don't want to constantly be talking about. Oh, my gosh recession coming session coming home because a recession may never come and the worst type of investor, in my opinion, is the person who always sits on the sidelines who's just never in because it's 2012 and they think we're gon na have a double dip. Recession, it's 2016 we're gon na have a recession. It's 2018 we're gon na have recession.

You know it's there's always talk of a recession right, so we do have to moderate uh that in our evaluation of what's happening in the markets, now a lot of individuals and - and this is the problem, in my opinion - with youtube - is there's just so much oversimplification Of youtube because other youtubers they want to treat their audience like their their children, uh and, and so sometimes uh. You know it takes. It - takes a little bit more deep, diving to understand, what's actually happening in the market. I i like to provide that deep information in the best way possible in the most neutral way possible that i can, but one of the most important things to remember uh is that a recession can be predicted, uh not always well, maybe it has been always, but The last one was a little bit of a fluke with covet, but the recession has kind of always been, i should say, led by an inversion of the yield curve and uh.

Here's a quick chart here from bloomberg, just showing us our yield curve continuing to flatten. This is on the one month basis here, and this is on the one year basis here, so when this number here gets to zero. This is the spread between the ten year and the two year tend to head a little bit more towards recessionary concerns. But again you don't want to have your head uh in the sand.

Thinking that oh we're definitely going to recession - and it doesn't come because you're going to miss out on a lot of potential gains and the the chart that a lot of youtubers oversimplify and that they keep showing is, is not what's happening in yield curves. It's not what the bond market is. Pricing in. It's not what's happening in with inflation and actually going deep on, what's happening with the wage price spiral that we just saw starting decoupling from supply chain issues within the last month, which is not good.

A lot of folks are putting up this chart about what has happened in the market as uh interest rates have been hiked in the past, so we could see market during interest rate, uh hikes, and i'm going to show you something here - that's actually quite problematic. In my opinion, so if you just google, that you tend to get a multitude of results like this one here from marketwatch - and it says here's what the market says about stock market returns during fed rate hike periods right and i've. I've put up some of these charts before uh, but there's there's something that i i should have been a lot more clear about uh er and that's what we're going to be right now, uh, but anyway, you see this right here. You see these these charts and these implications that hey rate, uh rate, cut cycle, start rate, cut cycle, end uh, so so and then over here you've got the rate, hike cycle, start rate hike cycle end, and so here it seems like oh wow, it seems like Things are mostly green and only occasionally are things red.

Well, there are a few things with this. First of all, some of these dates are relatively cherry picked, so you have to be a little careful with some of these states, but the other thing, that's very important to know - is look at these decades when where's the 70s. Here right, the 70s is entirely missing and so are the early 80s or other inflationary periods of the past see remember. We currently have the highest inflation that we've seen in the last 40 years, and so when uh publishers or other youtubers or whatever, put together information about here's.

What the stock market or here's. What history says about the stock market during the fed rate hike period? And we look at this chart without considering inflation, then we're really just misleading ourselves and again i don't want to suggest that oh recession's definitely coming, i hope, not recessions. Coming are very, very terrible, very terrible, best case scenario. We get really good positive unemployment or employment data on the fourth great cpi data, and we finally get a rotation on cpi data on the 10th and we're off to the races again and i'll be investing again right away.

I do not want to be out of the market but uh, but we can't put our head in the sand with some of this overly simplified information in it. We always think it's kind of comical that uh folks justify oversimplifying the content they're, providing because they're almost trying to call their audience stupid. It's like, don't worry, don't worry. The ultimate answer to everything is just be a long-term investor.

All right. Fine, that's fine, and i recommend that too, for probably a 90 plus percent of individuals, but for those who who are worried about cyclical changes in markets and how we could go from a higher point in either a an equity cycle or a real estate cycle to A lower point: well, that's what we're tracking and watching so anyway, thanks so much for watching, check out ftx by the link down below and also check out the programs for that v-day coupon code via the link down below thanks so much for being here and we'll See in the next one goodbye.