Well well, well, well. Well, hey everyone! Welcome back! Let's talk about what jerome powell said today and folks you got ta know the market is happy. We ended the meeting at a high nasdaq over three percent tests up over six percent. Let's talk about a why powell just said that the following quote: quote: we're not trying to induce a recession.

Now, let's be clear on that, my response to that found she has coveted okay, no seriously on to the facts. Let's get the facts up here, so we got a 75 basis point hike, drawing powell's papers when he came out looked very very rough. He looked kind of sad and scruffed up honestly. I think that was all an act.

I hate to say that, but i think it was sort of an act of empathy towards poor people who were suffering due to inflation, which obviously he says, is very important to make sure that we get that down. I think the ruffled papers was kind of like hey, let's roughly up a little bit before you go out there. Powell, let's make it seem, like you're, really stressed that's kind of what he felt like or seemed like to. But anyway he says policy is adapting and because policy adapts, they have to react to information that comes out.

Nobody was expecting a 75 basis, point hike until, of course, we had the cpi data that came out on friday and consumer expectations for inflation. Moving up one tenth of one percent, we know that consumer expectations for inflation are everything. If inflation expectations, whether market or consumer, break away, then we will end up having to get paul volcker to restore the federal reserve's credibility. Now, because the cpi data and the consumer sentiment information came out during the blackout period, jerome powell told us that it was unusual to get data this late during their blackout period, where they can't talk to the media and uh.

You know they had to adjust accordingly, nudge nudge, wink wink and i'm making this speculation, but i think i'm right so we texted someone at the wall street journal and told them we're going to go for 75, so that the way uh market would price that in On monday, which is why the market crashed on monday and we're sorry about that, but we couldn't say anything so the wall street journal had to be the messenger. Sorry, that's actually, honestly, i would. If i had to put money on it, i would bet money. That's literally exactly what happened but uh.

He mentions that. Well, he finally gave us a guide as to what we think restrictive will be for the terminal fed funds rate the market was in uh pricing in four percent. The uh uh fed is actually pricing. In three point percent as a terminal fed funds rate with a range between three to three point: five percent: this is substantially better than we were expecting on monday when everybody was pricing in the worst case scenario.

Three to three point: five percent is not a paul, volcker now, obviously uh. If things get worse with cpi, which would be a flattening of cpi for too long or a continued increase in cpi, then obviously the fed will have to volca, uh or or either uh or or hike more right. So drone powell believes that it is possible to get this done, but of course we're going to react appropriately. The current implication was that we were going to get 275 basis point hikes, one in june 1 july that changed because jerome powell said that a 75 basis point hike the first since 1994 is unusually large, and we do not expect this again in the future, though, We'll make that decision meeting by meeting markets immediately jumped on on this report.

The 10-year in fact fell from a high of 3.45 earlier to 3.34. The dollar was down about seven tenths of one percent and we're no longer pricing in that 75, bp hike for july. So this means we're probably pricing in 50 for july 50 for september 50 in november and then probably 25 or 50 in december kind of tbd on that. But it looks like we're going to go back to the 50s after this meeting, assuming of course that we get some kind of either flattening in inflation, followed by a decline in inflation, which the federal reserve is expecting.

If we look at the scp the summary of economic projections, we went down substantially from two point: eight percent to one point: seven percent. This is not as close to the zero percent line that i was expecting. I really based on everything that kind of we're. Looking at when it comes to earnings calls or whatever it felt like, the economy was doing a lot worse than the projection that we would have 1.7 growth in 2022-23 uh and then a little bit up there after in 2024.

But jerome powell told us the following quote: the consumer is in very good shape. There are no signs of a broader slowdown in the economy. Note that word. Okay, that says, quote no sign of a broader slowdown in the economy.

Obviously, there are microscience, but no broad sign. He says people are talking about it. People are fearful about it. Consumer confidence is low.

Stock prices being down has an impact to some extent, but quote we're not seeing a broad slowdown. Okay, really interesting. This is kind of uh, this kind of stands, in contrast to what a lot of us have been feeling and maybe jerome powell's right, maybe we're being a little bit sueded by uh. What's going on with uh, with with the stock market pricing in such bad news over and over and over again, but jerome powell says it's just not what we're seeing okay well they're, either lying to us or they're right and we're wrong: okay, fine! So, anyway, uh regarding the unemployment rate, we expect that to go up to 3.7 percent at the end of 2022 to 3.9 at the end of 2023 and 4.1 by 2024..

This actually shocked the market a little bit that we would see the unemployment rate go up. Basically, six tenths of one percent and uh. At the same time, the fed also removed the statement labor market remaining strong while getting down to two percent inflation. Now jerome powell responded this and said: look we took that line out because we don't think we can really control what's happening in the labor market.

We can control uh inflation to the best that we can and interest rates and even though our dual mandate is inflation and the labor market being strong, we don't think that right now, that's up to us. We think commodities are a bigger driving factor. Basically, oil and gas prices right uh and, as a result, they're taking that line out, but think about it. This way, 4.1 unemployment is still pretty damn good and historically, very, very low, so quit whining about.

It is basically what he said now when he was asked. Why not like a one percent hike versus 75 or 50 basis points or whatever? Why not just jump up and drone powell reiterated that we want to see compelling evidence of decline and when we saw inflation, numbers actually tick up a little bit rather than flatten. We went to 75.. If they keep going up, then we'll see larger numbers.

If they flatten, then we go 50s. If they start falling, then maybe we go from 50s to 25s. Basically what he was implying right. The goal, of course, is to see demand moderating in response to retail sales numbers down uh.

They are monitoring those shifts, but but again are not seeing a broad slowdown. Some people are wondering why the fed would lower their gdp forecasts while raising rates and i'm like dude. That's literally the point. The point is to slow down the economy and that's what the fed expects to accomplish now we're getting the housing sector.

The drone panel actually gave a very interesting warning. This is the first time he spoke directly to younger, first-time homebuyers and said, look if you're looking to buy a home, you need a bit of a reset. We need to get supply and demand together again, and this will be a process now. He said he's not really sure how residential real estate will be affected or how prices will be affected, but that was very interesting.

It was a warning to first-time homebuyers there and it's the first time. I've ever heard a fed chair basically go, don't buy your house right now, but this is literally what i've been talking about since january, but whatever labor market supply and demand expect it to come into balance. Median projections rose somewhat if we get inflation down and the unemployment goes up, don't worry, that's still something that could be deemed successful. Supply chain constraints, supply chain constraints.

I thought this was interesting. He says supply chain issues really are such that we're going to see. Probably more price decreases than would normally be anticipated after a supply shock, because right now supply is so short that when it actually comes online again, we'll probably see prices plummet much faster. However, we have had a very unique era of supply chain constraints.

Usually these supply shocks are transitory. He brought that word back transitory in nature. He said that supply shocks come and then they go, oil shocks come and then they go right. Supply gets limited and all of a sudden people bring more capacity online and the supply goes back into balance, or sometimes we have oversupply and prices come down, but he says: we've had an extraordinary number of supply shocks from a pandemic to the response to the pandemic.

Three waves of covid, the reopening the war in ukraine, which will have long lasting implications to shut down multiple shutdowns in china, and these supply issues are going to linger with us for quite a while, but hopefully over the long run. We'll have disinflation again just like we had in the past disinflation in the past, that is declining inflation was, of course, driven by an aging population, globalization, productivity, being low and technology, all driving inflation down over the last 40 years of a great moderation that we've seen. Whereas now we just have this massive confluence of these crazy supply shocks, he says the american economy is very strong, that their credibility is vastly important and that they need to keep expectations in check. We talk about the expectations almost every single day on this channel so subscribe.

If you have not yet make sure to check out our sponsor for today's video ftx go to metkevin.com ftx to make sure that you get up to 20 dollars totally for free. When you trade up to 150 using the ftx platform, crypto might be seeing a little bit of a bottom here, although every time bottom's been called in crypto, it keeps falling lately. Okay, but hey! You know what! If companies like even celsius, who are going through a lot of hot water or using ftx to trade, their crypto, it's good enough for you as well. Ftx is a phenomenal platform and they integrate their trading view.

Technical analysis, software and, what's phenomenal about that, is, if you use ftx on the desktop you're gon na get blown away by the ta capabilities, they're, also bringing their software to stocks and options. Soon, that's gon na be a game changer and, of course, if you download their app by going to medkin.com ftx and you use code, meet kev you'll get that free 20 and you get to use their beautiful app. Six million users are worldwide and in over 200 countries, so check them out, go to mckevin.com ftx, so some other things, and then i want to talk about my opinion, so jerome powell, again uh, tells us that a recession is not the goal. The goal is to get headline inflation down, but that core inflation also matters, but ultimately both have to be done and it's going to be tough or maybe it won't be.

Maybe it'll work out easily for us. He does not see any evidence of an inflationary spiral and continues to see no evidence of a wage price spiral and believes that our economy is actually doing quite well. He also believes - and i thought this was interesting - he says quote - the public generally sees us as very likely to be successful and that's critical. Now, i don't think many of you think that is going to be quite successful, but jerome powell believes that most people on average think he's going to be able to do the right thing now.

Uh drum powell does not believe that, with a 75 bp hike, we are getting pushed into a recession and uh. He believes that sure there is an entire possibility that supply cha shocks could just continue to last, and this was a danger, because, if supply shocks continue to last, we will have higher rates for a very long period of time and it'll take a very long period Of time for stocks to recover, this could go on and on and on. He does not believe that qt is going to have a substantial impact to the markets, and now i'm going to give you my response. I personally believe that they should have been more aggressive on the scp, because i think the market - or i should say the economy, is weaker than they think, but obviously we have a difference of opinion there.

The federal reserve does not think the market is, or the economy i should say, is as weak as i believe it is. Even though the real atlanta gdp forecast is like zero percent and we've got an inverted yield curve and inventories are building up substantially in retail stores. For some reason they actually think. No, no, don't worry the consumer's still doing just fine like we're good and that's why they have these higher gdp estimates as they do, and so i hope, they're right, because it's going to do well for my stocks, i'm not at all in a position where i'm Like that's it i'm going all in i'm, drawing all my margin down and i'm going to buy everything.

I can no, but i am doing everything i can to make as much money as possible so that i can throw it into the stock market in a way that i'm not exposed to margin or exposed to margin for any longer than a few weeks. Because, let's have a real estate deal, closing or whatever i buy some stocks on a dip and then i pay that margin off. I do not think that debt is a very good idea to have right now and i'm doing everything i can to raise money to continue to buy the dip, and i encourage you to do the same thing. In fact, if you want to learn exactly not only what my positioning is going to be in real estate or stocks and how that positioning is going to evolve when it comes time to diversify, again, remember right now, it's concentration time, in my opinion, not financial advice And then it becomes diversification time as we start going back into a bull run, which who knows? Maybe that starts tomorrow? I don't know.

Usually the stock market does pretty decently after the fed meetings are over and we got that fear behind us uh. But if you want to see all of that check out the programs on building your wealth, you have 50 off link down below we're. Gon na have another price increase at the end of next week, with some massive new lectures coming out. I just invested twenty thousand dollars in some new visual technology.

That's going to be freaking epic for our course member lectures it's gon na, be so amazing. So we're super excited for that uh and uh. I have to say, i think, uh jerome powell's performance today was uh reasonable and i say performance because quite frankly, i think the scruffled papers was a performance thanks. So much for watching.

I wish you all the best and uh comment down below. What do you think? Also, let me know what do you think about the live format seriously? Uh. You know i've been doing these condensed videos i haven't been going live much because i think i'm all a big fan of like value permitted and providing you as much value per minute and i think the condensed videos, with all the information i put together or can Put together quickly, for you is very useful, though some of you still seem to really like the lives. Let me know in the comments down below or leave a comment and tag me at me: kevin by going to mattkevin.com chat, metkevin.com chat, open up the discord and tag me there i'll be reading those later today, thanks so much check out the courses check out, ftx And folks we'll see the next one.

Thank you. Goodbye.