Hey everyone welcome back. We are going to well talk about the fomc minutes which are coming out. I do have a quick announcement which i'm going to talk about and uh yeah. Then we're going to get into some expectations about multiple compression uh.

How much we could see based on fed drawdowns and we'll also talk about the minutes and so on and so forth. So, let's get into it first the quick little announcement uh. It probably will start this. I would say monday, but a lot of people have been asking for like a subscription way to be a part of the market.

Open live stream rather than like buying a program or whatever uh. The join button now has that uh? It's it's expensive! It's cheaper! If you buy a program rather than that, but i wanted to put that out there. I did throw that in there probably monday, we'll start having the links in there, but anyway uh, let's get into what we're here for, and that is talking about the federal reserve. So, first of all, we know that the balance sheet is at 8.9 trillion dollars uh.

The current best estimates that we have is for every one percent drawdown that we see of the balance sheet of about 90 billion dollars. We expect to compress multiples by about one third of one percent: uh, maybe slightly less like 27 basis points, so the balance sheet drawdown isn't likely to be the biggest issue of concern to the markets unless the federal reserve comes in with large drawdowns if they go With 90 billion dollars a month of drawdowns you're, really only seeing multiple compression of like three percent uh over the course of a year right, three: three and a bit uh. However, if they start blowing off this balance sheet uh, you could really see some substantial, multiple compression, which uh, if you're not familiar yet, which at this point you should be. If you watch the channel, you should be pretty familiar with multiple compression.

I will just give a an extremely quick example here, a very very quick example of multiple compression you've. Probably already seen me do this, but it's just the easiest way to do it. If you uh, if you make a hundred thousand dollars in rent on a building uh and it is selling for 20 times gross, this is very similar to your p e ratio. Right uh it.

Actually, it's probably more like price to sales. Quite frankly, but uh yeah we'll go with price of sales, similar uh, because cap rate would be more like p, but whatever uh 100k rent 20 times gross, then the building's worth 20 million dollars right. Let's say you raise the rent, you, you raise the rent to uh 120. yay, i've raised the rent, we're making more money and maybe we're running the building more efficiently or whatever.

Who cares right, uh? Well, the unfortunate problem about this is, if multiple's compressed to let's say 10, your building's only worth 1.2 right. I don't know i'm covering that up a little bit uh, but whatever you've seen this story before you've seen me talk about multiple compression before, and it's really important to know that multiple compression is why the stock market has been having a lot of heart palpitations, because We just don't know how quickly the federal reserve expects to draw down these um their balance sheet and, of course, we don't know exactly what to expect in terms of rate hikes. So those are the big things that we're looking for uh right now. In fact, we are expecting the market fed funds, futures they're pricing, in about a 50 percent chance of a 50 basis, point hike on the march 16th fomc meeting, which of course starts on the 15th ends on the 16th.

We are now looking for clues uh that could help us determine uh uh, you know, should we expect uh this 50 basis, point hike, or are we going to follow the doves and basically just end up doing a little 25 basis? Point hikes, which 25 basis points you might think. Oh, it would be a good thing if we did 25 basis point hikes, but the problem with that is. It reiterates the inflationary concerns that wait a minute if the fed is so far behind the curve and they're still refusing to get ahead of the curve. What's their problem right? What what like they're losing it uh, and so this is something that we have to be uh.

Cognizant of is that, to some degree, a 50 basis, point hike would actually be good again. The market right now, pricing in about a 50 50 chance uh, it's probably about 55 chance, uh 50 basis points and 50 uh 45 for a uh, 25 basis, point hike. We will know more, though maybe uh from today's minutes. Certainly we'll know when the meeting actually comes so uh, then we've got uh.

Let's see here, uh, okay, so then we've got we're looking for inflation clues. This is big, so we're looking for three big things: number one we're looking for inflation clues. What is the federal reserve seeing when it comes to inflation? Look if you read the earnings calls which i every single day i sit around the doomberg terminal and i read earnings. Call every single, freaking earnings call is the same thing.

We have pricing power. Not only do we have pricing power, but we're raising prices and if anything we are behind the curve on pricing power, which is absolutely insane uh. So companies are seeing the inflation like crazy. We talked about that this morning, uh, you know with heineken and kraft and advanced auto parts, and this comes after kimberly, clark and and all the other companies uh, so we're looking for inflation, clues we're looking for clues as to the 50 basis, point hike and we're Looking for the pace of drawdowns we're looking for those three things very, very important and remember that the uh balance sheet reduction, i would write this down.

If i were you, the market is expecting that every one percent drawdown is worth about one-third of a percent in uh valuation, multiple, okay. So now let me see here if uh, okay, well, this ipad's being stupid, hold on a sec, i'm gon na restart. This thing really quick uh. What we're gon na do uh now as well, is we're going to look at the december minutes just to get a little bit of a refresher here.

10-Year yields popping up a tiny little bit right now. We're at about 2.06 keep in mind, though these 10-year yields are being compressed a little bit thanks to a flight to safety because of the continuation of this drama that we have with ukraine and russia shout out by the way to topo, chico and not sponsored. But this video is brought to you by streamyard, which helps me not only put together these live streams and broadcast them to you, but also throw up comments, so we can respond to them uh or i can also multi-stream this on, like twitter or facebook or twitch. Everything all done through stream yard, so very, very great quality platform.

I've been using them for probably years now, uh, okay, good. So let's do a very brief little check here on the market. Shopify obviously hurting almost all of ecom, and this is a problem because shopify forecasting, a slowdown in the second half at the same time as inflation lags, is not good, because then you have a certain overlap period of stagflation, which is, which is you know. Worst case scenario, this is what we don't want.

We want to stay away from that uh. Okay, here we go stupid. Update's done all right, good, so now uh a quick look here at the markets, so you can see ecom getting hit here. Mad report does report.

After hours, we're off the bottoms for things like etsy shopify, uh cloudflare, getting hit about five percent today, probably, as you see, ecom fall, you might see some of the cyber securities fall as well. You do have upside here, uh over at upstar and uh corsair, as well as gold and airbnb uh. So you know a little bit of a of a mixed day, indices, obviously down ahead of the uh minutes and, of course a following. What was a very good rally yesterday, great rally yesterday markets, here's tesla sitting at about 904 off of some of those highs that we saw yesterday around 9 30..

Okay. So, let's look briefly at the sep which we are not going to get another sep, which is a summary of economic projections until unfortunately march and one of the things that's wild here. Okay, i want to point this out to you right here. This is very, very important because this is gon na, be something that we're looking for clues in.

Is you see this right here? How it says sept stupid pencil come on man what's going on with the ipad today: um geez man, whatever uh, so you see where it says september projection there. We go right here and then fed funds rate right. The september projection was that by the end of 2022, we would see rates at 0.3 percent, which is like laughable right. This was like.

Inflation is transitory right. Uh then they're like okay in december they're like okay, it's not as transitory anymore, as we thought. We think rates are going to get to 0.9 by the end of 2022.. Well, jerome powell told us in january at the meeting we're about to get the minutes, for he told us that if he had to go back and revise his summary of economic projections, he would revise up that's what he told us in january.

That means the notes. We're about to get probably not going to be pretty heads up, probably not going to be pretty now it's an issue i mean the consideration is how much of this is already priced in and obviously we'll see joe from miami folks price increases are not letting up. I'm part uh, i'm part owner of a plumbing supply and we are dealing with increases constantly severe lead times and availability. I foresee further impacts to housing in 2022 wow joe well.

Thank you for donating 20 to mention that that's wild uh appreciate that uh john. Thank you so much for the 50 donation. That's really nice of you! Okay! Follow me by the way on instagram and twitter. If you have not yet at meet kevin on instagram and outrealmeetkevin on twitter - and you get to see me post stuff, okay, so uh now, we need to look at quickly quickly quickly, because we only got five minutes left here.

We're going to quickly look at the last set of minutes that we got okay. This was a disaster uh. This came out on january 5th. It is from the this was from the december meeting right.

This was just a disaster. I filmed it, you could. You could look at this youtube. Video is live, uh worst report, yet from the fed right, and this was released january 5th - i covered it and it was horrible.

The worst i've ever seen it and i study the fed a lot. This was very, very, very bad. So uh uh, i'm gon na just do kind of like a look at some more of the um salient aspects here, but uh. Some of the things that we got from this are talking about the potential for a faster rate hike the potential for a faster runoff, because the balance sheet is not only larger, but they also have different durations of bonds that they want to run off quicker uh.

They they see inflation higher at the same time as they see the economy needing less support and uh. They mentioned uh words that were very critical, like significant pricing pressures for inflation right closer to liftoff, how they want to uh, reverse uh, the course of of this inflation and and by doing that, they have to use the tools on their tool belt right, but they've Also talked about financial stability risks in the last one, which is a fancy way of saying recession right. They talked about how economic activity has downside risks and inflation has upside risks. They talked about how inflation is broadening in categories.

I think, like every day, there's somebody who leaves a comment on my channel about how oh it's the inflation is just used: cars dude, that's what it was last year, not anymore right. Uh, take a look at this. Let me just read you a section of this. This was again from the last one here, we'll read a couple lines here.

Let's see here, federal reserve is better positioned for normalization than in the past. Uh balance sheet runoff commenced - or this is they're talking about the past. Okay, at some point after the first increase in the target fed funds rate is when they're going to start the runoff at some point after that implies that they're not planning on on or starting their runoff, probably until may or june. Since there's no meeting in april, however, participants judged that it would be appropriate that the timing of the balance sheet runoff would be closer to that of policy rate liftoff than the previous experiences they've had.

And that's because their current outlook is that we've got stronger economic outlook, higher inflation and a larger balance sheet, a warranting, a faster pace of of policy normalization. This was pretty bad and we're not going to go through all of this here. But a few of these participants raised concerns about a relatively flat yield curve and potentially adversely affecting interest margins for some financial intermediaries, which may raise financial stability risks right. This was their their sort of like hey.

We got to start looking like. Are there potential recessionary? Fears right: this is where they told us again. These are the december meetings minutes we're getting the other minutes in about two minutes. Uh a lot of minute talk here, but anyway, inflation readings remained high and various indicators suggested that inflationary pressures had broadened in recent months.

Uh this was all from december here: real pce uh growth appeared to be picking up inflation, despite an upturn in inflationary pressures, shipping, congestion and other bottlenecks continued to restrain overall uh. You know uh growth and trade, persistent bottlenecks right, so we're going to want to see differences. I want to see differences in tone like i'd. Ideally they come out in these minutes and they start saying things like hey we're.

Seeing inflation get better we're starting to see it, be less broad-based, we're starting to see the supply chain bottlenecks next get better. This was a summary that i made the last time a lot of notes: trailing default, still low defaults potential for less accommodative policy stance, blah blah blah blah, okay, good, so uh, let's briefly, listen to cnbc here. While i get the minutes ready, which come out in a minute main point to keep in mind with this proposal for the federal gas tax is primarily just to show voters that they're talking about things, they can do that. They're aware that it hurts people's pocketbooks, that they are at least trying to put things on the table, even though behind the scenes, what i'm hearing from a lot of aids is.

You know that there aren't that many pros to it. It's really hard to put something like this back in place once you roll it back yeah and if they were to, let it go for a while, would they so they're talking about this gas tax holiday or whatever, i'm occasionally going to throw up the spy? That's going to be the spy that's going to be above my head, uh all right! Here we go it's 11.. Here we go dude this website's going to crash man. Cnbc is probably going to beat me to it, but we'll go through it together.

Word by word. For word opposing any potential rollback of the gas tax, so certainly there are a lot of critics of doing this, even though the white house is trying to show voters, it cares kayla. Thank you, kayla tauschee, with the latest, all right that does it for the exchange. Everybody power, lunch picks things up right now come on man kelly.

Thank you very much and breaking this hour, the fed minutes details from the central bank's last meeting are being released. At this hour, investors will be looking for clues on the size of a potential rate hike in march, also about it. Okay uh looks like they are bloomberg has them. I don't have any summary of it.

Yet uh still waiting. Let's get a quick check on the markets: here's where we stand as we await the fed headline. No, i think they just released the title. They actually don't have them yet spy's, actually moving up right now before got him throughout 136.

Let's check on that ten years, look at the spy moving up right now. So maybe there's some good news in here. The latest the algorithms are gon na start trading. This right away.

Remember that al goes trade first, uh minutes released attached; okay, it's just taking a second to get this up and greg. Dimarzo is portfolio manager with rocklin trust, mike santoli with us uh, as is rick santelli. Who will help bring us the headlines as they cross and uh steve leesman will be joining us in just a few moments. Uh, let me go to uh.

Let me go to you let's. Let's hope that optimism stays i'm just waiting for them to download everybody's on this right now it gets a little bit tough tyler, because in a way the january 25th 26 meeting and the minutes they're in might be considered a bit old. Because since then, we've had a big jobs report, we've had updates on both inflation numbers, cpi and ppi. Both of those were hot.

Every release actually has had any pricing components has been rather on the hot side and especially got it all right. Let's go uh, let's, let's just start by searching a little bit, i'm just going to search inflation. Okay, we're going to oh, my gosh. Okay, lots of inflation here so uh employment, inflation, long run, interest rates fluctuate over time, uh duh uh inflation, inflation, inflationary pressures regarding monetary policy outlook.

Here we go uh with data showing continued tightening of labor market continues and elevate inflationary pressures. Policymaker communications were perceived as pointing to an earlier and faster removal of accommodation than market participants had previously expected. Against this backdrop, respondents to the open market desk surveys of primary dealers almost uniformly projected that the fed's net atchis purchases would end by fed by march 16th. We already know that expectations for the path of the fed funds rate shifted towards an earlier rate, increase interest rate futures priced in an increase.

Okay, i want a little more talk about inflation. Here. Inflation come on inflation rate over the long run is primarily determined by monetary policy uh trying to get to two percent. Okay, we're the big ones here, however, under the circumstances, the committee judges that objectives are not complementary takes into account employment shortfalls and inflation.

Deviations come on what are the big ones, all right, let's get forecast, please uh: okay, return of inflation. Okay, here we go here, we go inflation readings remained high. Various indicators suggested suggested that inflationary pressures had broadened over the second half of 2021, okay pc 5.7. That's already old news at this point: some of this data, the staff common inflation expectation index, which combines information from many indicators of of inflation expectations and inflation compensation.

This is good, had largely leveled off over the fall and was close to a 2014 average okay. So i'm not sure exactly what what they mean by this 2014 average, but that sounds good. However, shortages of construction, materials and building lots and other inputs continue to weigh on activity. Do we have good news here? Uh? Let's see this is going back to november sharp rise in covet cases.

Housing demand remains strong. Okay, no business, fixed investment appeared to post only small gain in the fourth quarter. Manufacturing manufacturing, manufacturing output moved down in december after advancing strongly in october november. Uh.

Let's see here, total real government purchases appear to have fallen. Trade deficit widened global inflationary pressures. Broad equity indices decreased markedly, so they're noticing that stock prices are going down global infra inflationary pressures, tensions between russia, ukraine, here we go, inflation abroad continued to rise. Okay.

What is this uh that said, input and output, price components of the purchase managers index provided some tentative signs. This is good of easing supply constraints have started to contribute to some led up in inflationary pressures in several foreign economies. We're seeing that in china too. That's actually good.

Okay, let's see more here upside to and okay, downside risk to activity and upside risk to inflation. This is the staff economic outlook. The staff's near term projected a projection for pce. Inflation was revised up relative to december okay.

We know that in particular, the staff continue to expect monthly inflation rates would move lower as supply constraints eased, but the projected step down was less pronounced than the december forecast. Even so, an improvement in supply chain conditions and a decline in consumer energy prices were expected to slow pce in uh 2022. Okay. So this is where they're saying hey.

We still think commodity prices are going to go down. Supply chains are going to get better. So you still see some of the fed talking about. Maybe some of this, this, like hey, think we still think things are going to get better okay, so either they've lost the plot or they're.

Seeing something the staff continued to judge that the risks of the baseline projection for economic activity were skewed to the downside and that the risks for inflation were skewed to the upside okay. That's not good, but we that's the same thing. They said last time: uh. Okay, let's see here, uh progress on vaccination easing us so that we're expected to continue to support gains in economic activity as well as reduce inflation.

Okay, but what's actually happening, participants remarked that recent inflation readings had continued to significantly exceed the committee's longer-run goal and elevated inflation was persisting longer than they had anticipated, reflecting supply and demand imbalances related to the pandemic. However, some participants noted that elevated inflation had brought it beyond sectors most directly affected by the pandemic. That's not good, mostly bolstered by strong consumer demand. In addition, participants cited other developments that had the potential to place additional upward pressure on inflation, including real wage growth.

This is where that wage price spiral comes in in uh, excess of productivity growth and increases in prices for housing services. This is another thing. That's concerning to folks is seeing services fomc, okay, fomc, i'm quickly, just cheating here. Looking at bloomberg notes, fomc sees tightening pace of inflation or tightening pace of faster tightening.

If inflation doesn't move down, many participants saw the chance of selling mortgage-backed securities in the future. Uh. Let's see here, they're still tbd here same note about balance sheet. Runoff will be quicker.

Participants noted that elevated inflation was a burden to u.s households, particularly those who were least able to pay higher prices. This is a big deal. Remember. The fed cares a lot about people uh who have uh the lowest incomes, because there's little they can do for them.

Participants generally expected inflation to moderate over the course of the year as supply and demand imbalances, ease and monetary policy accommodation is removed. Some participants remarked that longer-term inflation expectations appear to remain well anchored. This is good too right. We did see uh inflation expectations uh come down in in the last consumer sentiment surveys which supports inflation going to normal levels over time.

That's good. Definitely a lot less of a painful tone than they had in the last one. In the discussion of risks of the outlook, participants agreed that uncertainty regarding the path of inflation was elevated and that risks to inflation were weighted to the upside. This is the same thing.

They said over and over again, several risks, such as the zero tolerance policy in china supply chain disruptions, geopolitical turmoil, oil uh increases in global energy prices, worsening of the pandemic, persistent real wage growth in excess of uh productivity growth. We know this a few participants pointed to the possibility that structural factors had contributed to low inflation in previous decades, such as technological changes uh, and that those may re-emerge when the effect of the pandemics abate. This is the catholic kathy woodian argument right that, basically, like eventually, inflation is going to go down and that's not wrong. Like i'm on the same boat, eventually it'll go down, it's just.

Is it going to go down before a recession? Is the question uh? Okay? So inflation - let's see they also anticipated that it would be too soon to raise the target range uh. What is this here so in the consideration? The stance on molotov monetary policy? Oh okay, this is so this is referring back to the january meeting, where basically they're saying hey too soon for us to raise rates. Now they would begin removing apollo uh. Removing policy accommodation could soon be warranted participants that noted that inflation continued to run outside.

In light of inflationary pressures and a strong labor market participants continue to judge that the committee's net asset purchases should be concluded soon, most obviously referring to an end in early march. Right now, we are tentatively scheduled to see the end of this policy accommodation. The money printing, basically march 10th write that date down if you haven't yet uh. Okay implications for the future.

Okay, so the implications of economic outlook compared to conditions in 2015 - and this is another thing like everybody on youtube - keeps putting up these charts about how great the market was during rate hike cycles. But we don't have the inflation that we used to have, and we certainly didn't have the balance sheet that we used to have compared with conditions in 2015, when the committee last began a process of removing monetary policy, accommodation, participants, reviewed or viewed that there was a Much stronger outlook for growth in economic activity, substantial which is good but also leads to more inflation right substantially higher inflation and a notably tight labor market. The more tight the labor market is the more they can fight inflation. By the way, the market is slightly recovering right now the market actually isn't getting shocked to the negative like they did the last time these minutes came out so far.

This is all along expectations. Uh, let's see here no no real details here, but committee acknowledged that uh okay, i already read that i already beat them to that. Let's see. Consequently, most participants suggest that a faster pace of increases in the target range for the fed funds rate than in the past would likely be warranted.

Should the economy evolve in line with expectations, not a lot of insight so far in inflation, just kind of like we think it's going to go down, but not much right now in terms of new data. Here most participants noted that if inflation does not move down as they would expect, it would be appropriate for the committee to remove policy accommodation a faster pace than they currently anticipate. We know that some participants commented on the risk that financial conditions might tighten unduly uh, and this is the risk right. This is the the uh recession risk right here is that, if you tighten too hard, few participants remarked that this risk could be mitigated through clear and effective communication, and this is why they don't want to like shock the market by doing rash things.

They want to be very methodical with what they're doing now. I want to be very clear about that. That does not mean the fed wants stocks to go to the moon or cares if they go down. Ultimately, the fed's job is dealing with inflation and jobs.

That's it, but they don't want to like rug, pull to where all of a sudden banks freak out right. There's a lot of nuance here, but anyway, so far. Nothing like shockingly bad, which is good members, remarked that supply and demand imbalances related to pandemic and reopening. Had continued to contribute to elevated levels of inflation, this is pretty much the same thing that we've seen inflationary pressures, i'm just jumping to the word: inflation right now and then we'll look for other things too, like supply.

I want to see expectations. Okay, inflation pressure, strong labor market trying to get new info here. We've done those done these okay, that's the statement they released last time. So that's fine uh, not a lot of information on the balance sheet.

Honestly, i'm gon na look at supply here really quick business, fixed investment. We've talked about this supply bottlenecks and limited supply of construction activity. This by the way worsened this morning, construction activity, uh and supply issues. Somebody even donated money earlier in this live stream to say that they work for a plumbing supply company they're, seeing things get worse, a lot of companies, not a lot of forwarding forward-looking information in these minutes here perch, at least it's not worse, though.

It's not like a shocker like last time, pmis pointed to improved supply. This is good supplier delivery times that foreign vehicle production rose, notably suggesting that supply bottlenecks continue to ease somewhat. This is actually good right here, right incoming data, but this is all about the foreign economic growth. Is this easing right here so talk about that? Let me see other supply notes here: supply with sales running low okay.

What is this here? Financing conditions for consumer credit remained accommodated for most borrowers. Lending standards continued to ease lending standards. Easing is not ideal, but that's okay, uh sales running low, where uh this is a bang. Okay.

Here we go sales running low because of constrained supply. Auto loan growth continued to slow in october november. This is looking back. We just saw a banger for um car sales in january over five percent increase in car sales in january, which we were expecting a decline.

Household delinquency rates remained relatively low, that's good, while household borrowing rose but was mostly concentrated among prime borrowers. That's very, very important for financial stability right here very, very, very important. You don't want to see more subprime borrowing. You want to see, i hate to say it, but basically like wealthier people borrow money and poor people not borrow money, because it's obviously the risks associated with that to the economy.

Uh and that's that's a very rash and bad summary. But i think you know what i mean all right uh. So, let's see omicron varus supply chain. This is about maybes maybes supply chain issues continue contin this well.

Here we go hold on what is this? Although real gdp appeared to have posted a sizable gain in the fourth quarter, output growth was expected to slow noticeably in the first quarter before picking up later in the year as covet cases, declined and supply chain issues continue to resolve. Okay, hopefully we get more growth in the second quarter, but that's not what shopify told us. I feel like i'm looking a little bit into the past here, because we've got so many earnings reports telling us the opposite. The earnings reports are telling us things are getting worse with supply chains and worse with inflation.

Uh. The only ones that seem to have somewhat of a handle on supply chains were like companies like apple uh and amd, yet both of them suggested they were able to raise prices and that supply chain issues were still significant. Was apple's quote right so a little bit. I feel like this - i mean this.

This was done. This meeting did come before earnings season, but there's at least there's no shocker here to the downside. Uh supply chain continues conditions expected to normalize further, but labor market uh is still very tight. Okay, participants noticed supply chain bottlenecks and labor.

Uh shortages had continued to limit businesses, ability to meet strong demand right with these challenges, exacerbated by the emergence of omicron. Well, that's almost over now. What is this here? Most participants think that, if inflation, okay, this is an interesting note from bloomberg. Most participants think that if inflation doesn't decline as they expect, they'll have to raise rates faster and that's not surprising, but that this was interesting here, but thinks that some phrases, noting that some members of the fomc worry that rapid removal of policy accommodation may unduly tighten Financial uh conditions - maybe that's what's leading the market - to actually be happy right now.

This is that it's basically, no no bullard rug, pull right. That is good, see right here. That's this line, which we highlighted right here. This line right here might be why the market's actually happy about this.

This could be a big old bottom line. Right here is more of this, and these are people like mary daley who come out and they say: hey, hey, hey, let's communicate clearly, let's not rug. Pull like we did with the last minutes. Let's just give clear communication we're not going to go rug, pull and if anything that could actually be somewhat implying, like maybe they'll just come in with that little baby.

25 basis. Point hike, that's good, because it means less chance of a rug pull soon. It's potentially bad, though, because if inflation does not go down, then they might have to be more aggressive in the future. Treasury yields uh falling a little bit.

Let me see here because they were rising right before the meeting. I do think they're relaxing a little bit, which is also good and spy popped up a little bit, maybe about a quarter of a percent here, not not like a big rally, but let me get the 10-year yield quickly: yeah, okay, it's a 2.03 so still sitting Above two percent that makes sense. Okay, let's see what else we have here, uh a little more dovish here, i'd, say: yeah. This definitely a much more dovish tone these minutes, uh than than what we've been seeing.

What we saw in the last one, which is really really good yeah - this is sort of intro of their operations currency, holding additional matters. That's fine! This part isn't so important, longer run goals. We know what their longer run goals are open. Market operations talked about this uh okay principles for reducing the size of the balance sheet.

Participants continue to discuss topics associated with the potential adjustments here. Bloomberg already spoiled this for us and told us, they didn't really tell us anything, uh, let's see here. What is this participants discussion was preceded by staff presentation that reviewed key considerations raised by participants at the december meeting and examined how proposed sets of principles compared to basically they're, comparing the runoff that they started doing in 2014 and 15. With now, participants agreed that details on the timing and pace of balance sheet runoff would be determined at upcoming meetings and that they generally noted uh that they would likely warn a faster pace of balance sheet reduction.

Nothing no surprises in this no surprises here. If anything that reiterates their interest in not rug pulling us which is uh, definitely it's pushing. You could see the spy above my head right here likes this. You can see the spies been kind of tentative, though, because it's kind of like where is it where's the bad news, and we haven't really seen it here so uh.

Let's see here, if there's anything else, let me see what they say here about stocks, because this section could be very interesting. Okay, let me get rid of that for a second here, real government purchases fell in the fourth quarter. That makes sense. U.S international trade deficit widened that makes sense service exports jumped in november reflecting a sizable increase in uh exports of travel services after the reopening yeah travel's blowing up, i mean that's why airbnb is just killing it right now.

People are spending money like not. So, let's go over here: uh, let's see overnight, repurchase facility increased yeah this. This just means we have more cash in the market available right now, which is true, um expected path for the fed funds over the next few years, implied by a straight read of overnight index swap quotes rose, notably since the december meeting. This is what they want, though they want to pre-signal to markets, uh that uh, that that they're going to raise rates and they want the market to start pricing in those rate increases.

So that way they don't rug, pull in particular in the latter. Part of the interpret meeting period as shifts and expectations about the pace of monetary policy, tightening and global inflation and tensions of russia and the ukraine weighed on equity prices. So there they observed stock prices. We know that volatility increased substantially short-term, stable.

Okay, i mean i'm going to go back quickly here to the their notes. Fed saw supply chain bottlenecks in january, which have been contributing to higher inflationary pressures lasting longer. Staff's near-term projection for inflation was revised up relative to december in response to slower resolution of supply chain issues. We saw that they did boost their forecast to 2.6 percent from 2.1 percent.

Let's see some members wanted to stop asset purchases in the january meeting, which suggests to us that the runoff has uh runoff has support to begin very early, probably in may to start running off just so weird, because they're still they're still printing money right now. Okay, all right, let's quickly see how the market's reacting here so far, it seems like positive, which is very, very good. Yeah yeah, look at this tesla gained about a percent uh over this release, because no no talk of a rug pull here, that's very, very good. So tesla gained about a percent.

Oh look at this trade desk. Oh my gosh. Look at that trade desk recovery. Intraday here trade desk ran down the 91.

It was down like 8 on the shopify news and recovered really nicely shopify still down about 18 matterport reports. Later uh in the afternoon, a little bit of a recovery and i'm still getting hit on shop on shopify, still hurting a firm and etsy. Remember a firm. Does the uh shop pay for shopify still down about 3.3 here on uh arc and things that were running? Aren't necessarily running more, but you are seeing the indices recovering a little bit so yeah.

Look at that. Nice little run right here so that anxiety really pushing us over that 38.2 fibonacci here, because that anxiety is now lifting from the market that the fed would potentially rug pull us. This really then kicks the can down the road to uh march 16th. So hopefully we get relaxed markets between now and march 16th.

Unfortunately, what we're seeing from earnings is is that march 16th might not be pretty, but hopefully it relaxes. Hopefully, by march 16th, we start getting evidence that supply chains are are getting better, and i think that will continue to reiterate this that we're seeing here. So i would say, as a summary of this fomc set here, i would say good news: uh, no rug, pull fears of a rug, pull definitely getting reduced as a result. Uh, you are seeing indices, come back uh to at least zero to flat for the day, which is very, very good.

Uh wow somebody donated 250, i'm nearby in malibu. Let's meet up sometime, oh wow, that's awesome, john i'll check it out. Thank you! So much and uh wow very cool, but anyway wow uh. Thank you next! Thank you for that.

Okay, good! So uh, let's yes! Yes! This is very clear, uh, clear opsar. By the way, remember this video is brought to you by streamyard, so check out streamyard for the amazing live broadcasting software. They give us here, especially with throwing comments up on stream and being able to multi-stream. But this is not an inflection point to the downside.

That is correct. This is basically just a continuation of what jerome powell told us on january 26th. We did not get any skeletons out of this meeting. We didn't get bad news.

The market was pricing in the risk for some sort of downside shock. We did not get that that is very, very good s, p, 500, almost flat now, which is very, very good, so it's neither good nor bad. I would say this was a very neutral minute, uh release and uh, and i like that. But it is definitely not an inflection point that the the fed all of a sudden is going to be more accommodating if that is correct, absolutely sideways trading for the spy monthly jan is the range for the next uh a few months, probably probably uh.

So how do we play this report? You? Don't there there's there's, there's nothing uh. You know, but i agree with you. I do not think that we have the capacity for getting back to these all-time highs anytime soon, at least until we start getting through the uh. The taper uh process and and then the tightening process, it is possible that yeah a slow bleed continues.

Hopefully, not, though we just need good news already, uh, that's what we need is. We need good news that the inflation pressures are falling and so far they haven't been uh. You've got a lot of news about uh uh. You know i mean what was it we talked about this morning.

Craft heinz heineken wing stop kimberly clark. Almost all the companies reporting or complaining about this being worse, not better, but hopefully, hopefully before march 16th - that changes, because otherwise, if things get things continue on this pace, where uh you know pmi or the ppi, rather the purchase price index comes in double the expectation For inflation for manufacturing purchases or producer purchases, rather then j-pal is not going to be uh happy uh on march 16th. But again, hopefully we get good news between now and then uh tesla solid recovery. On the day, though, it was down two percent look at that rally coming off here.

So if maybe, if you're wondering how do you play this, maybe you play this by going a little bit uh temporarily. At least you go long on some of the tech trades that are selling down right now, who knows - maybe maybe shopify could get a little bit of boost here. Other things that sold off earlier in the day like that trade desk, sell down was just ridiculous. I mean the company triple beat and it was down eight percent that was just stupid, uh really really stupid, but anyway uh.

I did also by the way i am long on uh tesla about two and a half percent of my portfolio. Now i've got about 669 shares. I picked up a bunch uh last friday when the whole, like russia, ukraine drama, was going on. I picked up like 600 shares and uh.

If, if you want to see how i move back into the markets, you know it's, it's not it's just for perspective, it's not for you to copy, not financial advice. I have no way of knowing what your financial situation is, but do check out. The stocks and psychology of money group link down below that does include lifetime access to all the content in the courses and also includes my alerts, for as i buy back into the market and get back in. I am, of course, waiting for big inflection points for a more broader portion of my portfolio, but i'll probably be nibbling in on larger dips that we see like, for example, that tesla one that we saw on friday, but anyway, uh spy really likes this right now.

So i'm very very happy to see this. I do wonder if oil's moving on this, we do want to see oil come down. Okay, that's something else! That's very, very important, qqq same kind of euphoria here, very, very good. Let's quickly just look at oil because we need oil to come down: oil oil, oil, oil, uh oil, oil, uh, yeah oil still on on the upside here and then, of course on yields.

We are uh still stable over two percent here on the 10-year treasure, but uh wow, that's a lame summary cnbc anyway. Spy is just now trying to turn green. I think it's about to turn green, which is very, very good good. I, like it uh yeah and, of course the dollar would react to the downside.

The dollar would react to the downside, primarily because uh this, like there's, no rug, pull of like rates all of a sudden skyrocketing and if rates skyrocket, then the dollar gets stronger because more people can buy your bonds. Uh qqq is really liking. This here uh. It's only down about a third right now: somebody's asking 50 bucks.

Well, my thoughts on facebook. Multiple compression is probably going to continue throughout the year. I don't think it's a bad thing to nibble on some of your faves over time, especially since i mean look at the compression that we've already had in stock prices right, but unfortunately you jump on over to something like uh shopify. You think.

Oh it's down from 1700.. How much worse can it get and you still end up with a 17 downside? The reason for that is, if we do expect the economy to slow in the second half of the year. People are not going to be interested in paying these high multiples anymore for companies like etsy or or enphase, or affirm, and so you're going to get big compression in that price to sales, multiple uh anyway. So all right folks, thank you.

So much for being here really appreciate you.