Can the federal reserve raise interest rates by one percentage point. What's going on on team. It's ricky with tackled solutions. This is a question that a lot.

Beginner traders have been asking me. And this is a question that a lot of people um have after the report that was released in july. And it was the june cpi data. Report so inflation was at a 40.

Year high at. 86. Percent we had expectation at. 88.

Percent for the month of. June and it came in at 91. Percent. Now the reason that there is such a concern is that the federal reserve already raised interest rates by three quarters of a percent so 075.

This was one of the largest interest rate hikes that we've been able to see since 1994. If i'm not mistaken with that being said being able to see that the. June. Inflation surpassed the.

Previous month inflation from. 86 to now 91. Again. The concern is does the federal reserve have to take a more aggressive approach in raising interest rates.

I want you to understand the context of the concern. So i began to do a little bit more of to do due diligence uh. When it came down to this and one of these articles that i found um. I think put things into perspective uh pretty nicely.

Where uh. They first talk about well right away as we receive that june uh or the cpi data report that we was released in july. Obviously the concern right away is oh my god inflation has not peaked. The federal reserve is going to have to take a more aggressive approach they already raised interest rates three quarters of a percent.

It makes sense on why people naturally react and think that okay well now from three quarters of a percent. We're gonna have to raise interest rates a full percentage point and although that's my what you might that although that's might what you might initially think one of the main reasons. That that doesn't make too much sense is already from from mid june going into july. We've already seen oil prices drop and oil and food are the two areas that are not included in core inflation because regardless of how aggressive the federal reserve tries to increase interest rates it does not affect the it does not affect the prices of oil and food right.

So that's why with core inflation. Which is what they could influence is not included with food and energy. And if you've noticed every cpi data report that we've uh that has been released. We've broken it down on this channel and a majority of it is really made up in that energy sector.

And if we're seeing prices already dropping from june to july and the federal reserve obviously is aware of this then first off they know that what they do by raising interest rates does not affect those specific areas second. They also understand that prices are already beginning to drop. So that's why right away when that cpi data report came out and everyone's reaction was get ready for a full basis points. It just to me it just wouldn't make sense first off it doesn't influence that specific area and second.

They already know that oil prices are already dropping and this kind of put it into a perspective of you know the probability. And i thought some of you guys might appreciate this where uh. It was a really great study in mob psychology. Where we went into a week of a 92 chance that it was going to be a 75 basis point hike.

So that's what we actually did last month. Right at three quarters of a percent um and we exited wednesday with an 82 percent chance that it was going to be a 100 uh basis point. So again. One one percent.

Uh said art um. Hogan. The thing that i liked that they did was they came to revisit this by friday right so friday. Obviously we saw that the market began to rally.

We had an amazing trading day especially if you joined our live trading session. But by friday strategy said uh said that there was going to be about a 20 chance for a 100 basis point height priced into the market. So again. It's just understanding that when all you do is just to react right away based off of what is presented to you such as that cpi data report.

I 100 understand why people's initial reaction was to think that yes. We're going to have to take a more aggressive approach with raising interest rates. But when you first then realized that first off by raising interest rates. We don't even affect.

The prices of oil and that was the biggest contributor for the month of june and second we're already seeing oil prices drop and if they understand that then them raising interest rates would that therefore be counterproductive in my opinion. I actually think the federal reserve has a better chance this upcoming month um and again for those that are going to be. Asking um. This is going to be on july 26th and july 27th around those dates.

Uh that they're going to be releasing that uh interest rate hike and i will be live streaming that um on our youtube channel. So make sure that you subscribe. But i just i wouldn't be surprised if they actually go back to half of basis points. Which is point five percent.

Because of them seeing that oil prices are already beginning to drop core inflation. Has dropped consecutively three months in a row. So. Again.

Core inflation is everything not including food and energy. I know that this could be somewhat confusing. But when you begin to understand what the federal reserve and the tools that they have and what that influences if they're already seeing oil prices drop. They know that they don't affect that and they've seen core inflation.

Consecutively drop three months in a row. And again. It doesn't mean that they have to take a more aggressive approach because things are beginning to cool off so i'm very excited to see what the federal reserve actually begins to present and i hope that this is something that you're looking forward to and being able to watch on our youtube channel. So i wanted to wish you guys a happy sunday uh.

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I'll see you guys for the sundays.