Well, Jerome Powell just had his 60 Minutes interview released and I have to say I'm quite disappointed in Jerome Powell in the FED mostly because I didn't get the delicious juicy Finance Intel that I generally want from Jerome Powell Instead This 60 Minutes interview which In Fairness, it's a prime time broadcast 7:00 p.m. eastern time for America on a Sunday night. It's a staple in many households and what did Jome pow basically tell households hey, we realize that egg are more expensive, food's more expensive, groceries are more expensive since before the pandemic, and they're probably not going to come down. However, those feelings the the frustration about things being more expensive is clouding people's Outlook of an otherwise strong economy.

That's very interesting because Jome Powell here is basically saying look, the Econom is actually doing very well. In fact, his quote was, the economy is progressing strongly solid. We have a strong economy, the labor market is strong, the economy is strong, and so now the goal is just determining when do we reduce rates carefully. They also made it clear that they don't really want to get back to the zero lower bound.

That makes sense because they generally want to keep rates around 2% at the Fed so they have room to cut to. Zer is the zero interest rate policy. But when you get to an effective lower bound known as the El be effective lower bound 0% You really don't know what happens in an economy if you start pushing rates to negative. So Drome Pal suggests want to get back to about 2% on rates.

This is probably the first time we've actually had him talk about where they want to see rates end up getting. uh, and that was my takeaway was they they want about 2% of room in there now What's fascinating and obviously there's no indication how quickly they'll get to that. But what I think is fascinating about that is uh, it really argues uh for or kind of going back to where we were preco. if you think about it, we had 2% rates before Covid.

we went to zero during Covid, but we were at 2, 2 and a half% on the Fomc rate before Covid, and rates were at historic lows preco. You know we're three, three and a Qu% mortgages now. They fell, obviously even more, another about half% into that 2.75 rate on a 30-year mortgage after rates fell to Zero thanks to the Covid shock, but that's a tool of the FED rapidly cut rates in a recession drum. Poell also made it clear that we just shouldn't expect deflation across the board.

Yes, some prices might come down, some will come up. We shouldn't expect broad-based deflation unless we were in some kind of negative economy or negative economic time. A lot of folks, uh, look forward to the potential for deflation, but it's important to remember that if our economy the way it's rigged up fac deflation, we would actually probably be in a depression. Those are the times we've really experienced extended times of deflation.

the Uh 188 sorry the 1918, 1919, 1920 era and then of course the Great Depression And then maybe about a quarter or so. Uh, that is for 3 months in a row. in about 2009, That's when we've experienced deflation. Otherwise, it's always inflation.

It's pretty much always inflation because we just run the money printer. If we didn't on the money printer, we would have deflation. Things would be cheaper. The question is, would that be conducive with a growing economy? And that's of course, where the Austrians and the Keynesians will debate and fight from an economic point of view.

but that's beyond the scope of this video. What is interesting is we didn't get any intel on uh, this decline in the average hours worked. I I Actually I Didn't realize this because I thought this was filmed on Friday but this was filmed on Thursday So if Jerome Pal started talking jobs in his Thursday interview, then it would just solidify that. Uh, the Jobs report was leaked to him early, which we expect it was, but you know he doesn't want to make that so obvious.

Uh, so anyway. Uh, he does indicate as he usually does, the job's not done As far as the banking crisis. no major concern. He does argue that some banks with higher exposure to toxic assets will close or merge out of existence.

Interesting phrase. He did also suggest that bank runs can occur faster. Today We saw that during the banking crisis, everybody gets on social freaks out and people leave. Uh, that is a way of probably suggesting we need tighter Capital requirements because anytime you have a run, boom, buy.

uh. we. presently the market is pricing in a 20% chance of cuts in Marge Drome Powell Did suggest that we're not convinced that we're going to be ready to cut by March Market's still sitting at 20% We probably have to unpriceable catalysts that we have coming up that are worth considering. Or this week we're going to have uh S&P uh services and composite indices coming out tomorrow on the 5th along with ISM prices paid at 7:00 a.m.

we'll also get a Services index, employment index, New Orders index I'd really like to cover that live in the market open Live tomorrow just so we can compare that to the Jobs report to see if they're reiterating each other or if there's some kind of, uh, disconnect between the two. We'll get consumer credit on the 7th, nothing on the 6th and then we'll get initial jobless claims uh, for the week as well as wholesale inventories. But really, we're not going to get much this week other than revisions to CPI on the 9th. Uh, and frankly, what will be more interesting will be next week when we get to the 13th on the 13th.

We're looking for CPI looking for 0.1 on the month over month and three on the X Food and Energy Core Uh, month over month figure with no estimate yet for the year-over-year headline, but year-over-year core looking at 37. Uh, Something else that I thought was really interesting about Jon Powell was his suggestion that we don't actually need data that's as good as it has been. In other words, the data has almost been too good. Like inflation falling so rapidly on the six month that inflation you could honestly get a report that's a little worse and they would still probably be comfortable with May Cuts This I thought was fascinating that they have nearly a fully unanimous group over at the Fed.

and they see so much inflation in terms of, well, so much Uh. Inflation declines. rate of inflation declining so rapidly that, uh, they're almost all on the same page that, yeah, look, even if numbers start coming in a little bit warmer, we've made enough progress to where we can begin the process of cutting. I Do think they're probably just looking for uh, the not only the two reports that we have now, and this is sort of a hedge of his right because if you have two more reports so you get the Uh January report and the February report which come out in February and March before the meeting, then they can update their guidance in the summary of economic projection.

The economic projections come out uh. with the Federal Reserve meeting, the Fomc meeting, on March 20th and then they can sort of like see how the market reacts to their projections and then they can decide do they execute on those projections or do they sort of adjust their projections? So March will really be a messaging meeting May will probably be our first cut meeting and then we'll get another messaging meeting thereafter. Uh, in June I'll give you the date uh, meeting calendar of the Uh June meeting. The voiceover from CBS did indicate that Uh rate Cuts would come in the middle of the year which would align with May to June maybe July right? That's sort of the middle of the Year range there May 1st, June 12th, and July 31st.

Those are your next Fomc press conferences and the summary of economic projections will be released March 20th along with June 12th. So this gives you an update on what Jerome Powell Just said. We'll have some more updates coming out and I did post this summary on Ec.com as well. so you're welcome to view that there.

It's always free. Building an app out for that. Uh, that'll be built out in conjunction with what we're working on. Uh, in terms of app? Uh, work for house Hack which is very exciting.

We've got some really cool things coming. Uh, stay tuned. Also, for some house hack updates, there's a chance we, uh, might not do anything other than just call for warrants. There's a chance, so stay tuned for that.

We might not do a fund raise, might just call for warrants. don't need the money? so uh, that'll be really interesting. I'll have I'll have a fuller update on that within the next uh, few days. Probably we'll do some kind of video on the house hack Channel maybe the main chel I Haven't figured it out yet what we're going to do, but um, that's something we've been.

uh, we we've been discussing and what's being, uh, sort of what we're toward leaning towards right now. we want to get into phase two as soon as possible on House. Haack So it gives you a little sidebar update there. Anyway, thank you so much for watching, appreciate youall so much and we'll see you in the next one.

Why not advertise the these things that you told us here? I Feel like nobody else knows about this? We'll We'll try a little advertising and see how it goes. Congratulations man, you have done so much. People love you people look up to you Kevin Paffrath there financial analyst and YouTuber meet Kevin Always great to get your take even though I'm a licensed financial adviser, real estate broker and becoming a stock broker. This video is neither personalized Financial Advice nor real estate advice for you.

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