Everything (Important) Jerome Powell Just Said
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The author of this video does NOT accept liability for any investment decisions, as this video is provided only for educational and entertainment purposes. Although the author has endeavored for the information in this video to be correct and accurate, he does NOT assume liability nor does he guarantee that the data will be updated, correct and/or accurate at all times.
All of Tom's strategies, and news coverage are based on his own opinions alone and are only done for entertainment purposes. If you are watching Tom's videos, please don't take any of this content as guidance for buying or selling any type of investment or security. Tom Nash is not a financial advisor and anything said on this YouTube channel should not be seen as financial advice. Tom is merely sharing his own personal opinion. Your own results in the stock market or with any type of investment may not be typical and may vary from person to person. Please keep in mind that there are a lot of risks associated with investing in the stock market so do your own research and due diligence before making any investment decisions.
So as John Paul is recapping the end of his speech I want to come out and give you the highlights of what he said the main talking points. So he said basically 10 things I want to talk about today and give you the highlights in about five minutes so you don't have to watch the entire speech first of all, before. I Gotta start I Gotta tell you, this is a little bit peculiar. It's kind of a very interesting phenomena.
John Paul In general hasn't been really hawkish or dovish. He's kind of basically remained the same, but he delivers a lot of hawkishness so to speak as far as the message that was provided. But the market at least as of the recording of this video ain't buying that the market is calling his bluff I'm going to show in a second what I mean. So the first thing I have to talk about is the fact that John Paul mentioned that the two percent inflation Target will not change and he did it 17 times during his speech.
The average was about 0.5 minutes per time. mentioned. Absolutely insane. So two percent it is not gonna slow down before we get to two percent.
That's very interesting. Number two: he said more rate hikes are incoming. they're more hikes needed. Again, a little bit on the hockey side.
we knew that. How many more hawkishness? How many more raid hikes he didn't say. but at the very least we know at least it's going to be five percent at the end of the year at bare minimum. now.
He also mentioned something he didn't say last time, which is the fact that they're gonna be reducing the balance sheet now. He said it multiple times. maybe not the last time he spoke, but to date the talk has been talked. The walk has not been walked.
Does he have the balls to reduce the balance sheet and crash the market? I Don't know. We'll see if he does that. It's gonna be very, very painful for the stock market. if you dump a lot of these bonds out of the market.
Well, I'm going to say the price is going to go down. it's going to be bloodbath. Um, he did mention that the restrictive policy of the FED has to continue because the job ain't done yet. Basically, he's signaling to all the opiums out there that hey, we're not gonna pivot We're Not Gonna pivot now the S P 500 the NASDAQ Every single index you can think of is not buying that.
The trading activity as of this moment is basically the opposite of what they're saying and they're basically calling his bluff. Absolutely insane. And now John Paul did mention that they're seeing a Slowdown in the economic activity in the real estate market, but he did mention that the job market is just too darn hot and they won't stop until they get a cooler job market. He didn't say a number at least I didn't hear one, but he mentioned before four and a half to five percent unemployment still a long ways away from the three and a half percent.
Currently, he basically kind of, um, created a little bit of a problem for himself because at this point he basically gave away the cards saying Hey We're Not Gonna pivot until we hit two percent and until we have five percent unemployment Now, it's a very restrictive kind of stance to put yourself into. But hey, that's what he said. Um, he did say that we need more evidence we being the FED to get convinced that there is an actual slowdown in inflation, and he actually hinted towards what happened in the 70s twice, saying we're not going to get complacent. we're not going to ease off before inflation is fully dead, because it's going to come back and bite us. and there's way stronger than it did now. Exactly what happened in the 70s. inflation went down, the FED took it easy, and then it spiked back up stronger and much more worse than before. And then Paul Walker had to step in.
So he's basically saying we're not going to make the same mistake of the 70s ain't gonna happen two percent or bust pretty much. Um, he did mention that they will be shifting to a slower increase rate of hikes so to speak. The pace at which they could increase is going to slow down, but we already knew that that's not anything new. He's basically saying we're not stopping, we're not reducing rates, you can forget about that.
The market is, obviously, at least as of now, is not buying that and he was asked a very interesting question. would I Most questions are absolute hot garbage. but one question was very interesting and he was asked whether there's a scenario where the unemployment rate stays at three and a half percent, but inflation eases to two percent and if that happens, they can reduce rates without unemployment Market going to five percent and he said and I don't know why he would do that but he said he doesn't think the scenario is possible. He doesn't think that that's possible.
So it seems he's absolutely obsessed with crushing the job market. and I I think it would have been a good opportunity for him to unshackle himself from the unemployment market and say hey, if we get to two percent, we don't care about the employment Market No problem. Um, very strange answer. as we can see here Steve Leesman is on the screen and you get the gist of it.
Basically same old, same old from Jerome Powell Very very focused on the job market almost to an obsession and the markets are not buying it. It's kind of the gist of it. I Hope you enjoyed this video. See you in the next one! I Love you all.
Before you leave, make sure you hit the like and the Subscribe button Okay hugs and kisses.
is there any chance that pltr will drop again at 7 dollars?
Thanks Tom!
Definitely feels like the goal is to crash the job market more than anything else. I disagree with JP. Let's see how this is going to play out,
He wasn’t dovish or hawkish. He told us that the tools were working but would take time. They can’t pivot or show signs of pivoting. If they do, market conditions fix themselves, everyone yolos call options and we have inflation again. In my opinion, having listened to the whole speech, he doesn’t think we need to crush the job market to get the job done. Job openings being higher yesterday, he said “it’s A data point” meaning, it’s okay. I think it was more dovish than hawkish. Just have to listen for the little clues.
Such a great summary. Thanks Tom!
👍
Thanks for explaining the important points succinctly. Like your synopsis.
So Powell doesn’t believe in a Deflationary Boom. I do. It’s exactly what Tesla and the energy transition delivers. Subtract fossil fuels from life, do stuff using photons hitting PV that costs zero to run, and everything gets cheaper. Simultaneously Tesla need every employee with skills they can get. Deflation, Boom, together. It’s actually great news.
Hul'up. The 70's was bad because JFK, LBJ and Nixon set it up to be bad. Focusing on growing jobs over killing inflation. Nixon even said "I don't care about inflation, I care about people working". Carter then screwed the pooch as well.
Finally Reagan/Volker "reset" the economy and killed inflation. By establishing RMBS system as a core foundation to society and increasing Interest rates….. but after a year they stopped too soon. And inflation came roaring back. So Volker went super saiyan and made sure the monster was dead this time. And we've enjoyed 40 years of relative stability since.
Short and sweet 😊. Thank you Tom!
We’re in trouble if Powell thinks this is the 70s all over again and it turns out QE and a broken supply chain created a sufficiently different economic environment
Government's overspending is causing the problem, not Powell.
Just say it. They can't have free slaves. Need to shackle them up. Need more people in debt to pay for the upcoming bankruptcies.
Buy more palantir.
Funny, but not unexpected, two different takes on the speech between you and meet kevin. I appreciate the different takes, so I can make my own descision
Cramer was right ……the NEW BULL RUN IS HERE !
He needs to take the blinders off, the unemployment rate is low due to the fact that most baby boomers have retired or died. Not enough younger workers to replace them.
We just witnessed the day when when “fighting the Fed” means being SHORT. Buy everything until the March CPI when inflation returns. Thanks, Tom.
How is this guy still have a job? And not in a dumpster?
We'll see how they look at things during the Election Year? I think there's going to be a major shift by Jan. 24.
The Fed balance sheet is already decreasing. But they are simply letting bonds mature, and not replacing them ('rolling off the balance sheet'). I haven't listened to the full speech yet, but are they suggesting actually selling bonds before they mature?
Isn't the government great? Keep raising rates until you loose your job!
I like your short format.
Powell talks too much!
Important thing to mention would be the actual rate increase. Not impressed Tom, you can do better.
Inflation is up. Earnings are down. Job cuts continue. Rates should be raised. Powell has no idea what he's doing. Look out below. Rates at .25 are a joke to fix this. Needs to do his job.
WEF – "you will own nothing and be happy" – is a very complex geometric shape.
All the FED cares about really is unemployment.
they ALWAYS want inflation – they are the root cause of it.
too much, well that will give you a stomach ache. (like too much cake)
the main reason North America was created was to get away from the Central Banks.
unfortunately, 300 years later, they snuck in the back door in the 1900's and viola.
right back to where we started from.
from mid 1400's to mid 1800's a horse could be bought for the same amount of money. (places where central banks had no foothold)
meaning, inflation is the very offspring of central banks.
"Market is not buying it" should have been in the title, you said it many times lol. Hugs and kisses.
What happened to the part of the fed's mission: "to promote maximum employment"?
Nah the impression I got was that he doesn't expect unemployment to rise as a necessity for them to ease tightening. He said cost of goods was number 1 followed by services x housing.
In order for inflation to return to 2% so much more needs to happen. We're still above 6%.
Top man! Glad to see you’re feeling better now! Remember to take it easy as well!
Awww, we've never gotten hugs and kisses from you! 🥰😘