The FED raised interest rates by half a point, but Jerome Powell, the Fed chair just said some very important things about the next steps of the Fed during his speech.
👉🏻Watch next: how to invest when you know a recession is coming (the best stock market crash investment strategy): https://www.youtube.com/watch?v=a3jls_Jzh4M&t=211s
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👉🏻Watch next: how to invest when you know a recession is coming (the best stock market crash investment strategy): https://www.youtube.com/watch?v=a3jls_Jzh4M&t=211s
*Disclosure: I only recommend products I would use myself and all opinions expressed here are our own. This post may contain affiliate links that at no additional cost to you, I may earn a small commission.
DISCLAIMER: 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.
Okay, so Jerome Powell Just finished his speech and he said some incredible stuff. I've summarized the main 13 points of his one hour long speech: I'm gonna start off with the biggest absolute insaneous Banger John Powell Literally said that he thinks a soft Landing is achievable I Can't believe he said that. Whether I personally agree or disagree with him, you know the answer. I Think it's absolute horseshit I Think saying that a soft Landing is possible with a seven percent inflation and a four percent interest is like peeing Against the Wind and saying I'm not gonna get wet I mean it's not gonna happen my guy, you're gonna get wet.
So he said it. The market is gonna love it, but nobody would have a brain believes that point. Number Two: He said that they are moving to a slower pace of rate increases, which is as expected on script. We know this really.
He did say they have more work to do number three again, as expected on script, he actually said number three. that's actually the third Story The fourth point was unexpected. He said guys, having two good inflation reports is just not enough for us to make a policy change at all. He never said it that it's very very Savage of him to say hey, let's just do you know, let's do our due diligence.
Just having two good reports is just not enough. Very, very important. Very hawkish. Now another hawkish sign.
He said we are three x higher than our Target two percent inflation again. I Know everybody knows it, but the fact that he said it, puts another hawkish kind of sign on top of everything he just said. And at this point except for the soft Landing poor which is just telling to calm people, it seems a little more hawkish than bullish. Again, he repeated 57 000 times that price stability is key.
We know that another kind of hawkish sign basically saying hey, we're gonna do everything to keep prices stable He talked about economy actually slowing down, housing markets slowing down. That's actually Davis Believe it or not because basically saying hey, the measures that we're taking are slowing the economy and are slowing the job market. sorry the housing market. So if the housing market is slowing down, the economy is slowing down.
Basically, we're not going to need to do a lot more of rate hikes, you know to achieve our goal. It's actually very dovish. Of course. he talked about the labor market saying it's way too strong as we expected him to say.
we know that him and his Lieutenant Williams do not like the 3.7 percent. He actually said that they're targeting four and a half percent which I did not expect them to come out and say. But let me just tell you that his Lieutenant Williams said that five percent is also acceptable. They're talking about something insane.
You have to understand it's not going to happen in a slow controlled manner When you're trying to break the job market. It's not going to break slowly over the course of the next 18 months. When the job market breaks it, you know it happens very violently, so it's not going to be the slow kind of soft Landing That's absolute horseshit. The next point, he said more rate hikes are needed. He said it twice. Another hawkish sign. He said that he expects the FED very very important point to hit the two percent Target rate in 2025. Which means that based on their current estimate, we have two more years of restrictive monetary policy.
Not a good sign. Very hawkish. He hinted that the next time they're going to raise interest, they're going to do another 50 basis points, which is also very, very important. but he said that current Currently they're seeing the peak rate for this situation.
as they know right now based on current circumstances and facts five percent and if we're currently at four percent interest and their Peak is five percent and is hinting and another half percentage points, That means that the rate after that it cannot be more than 0.25 Otherwise, you just exhaust it all you know. you blow your load right away. So it's basically he laid out the map 0.5.25 for the next two rate hikes. He did say that the businesses right now that are reluctant to lay off employees, we're gonna have to slowly cause them to lay people off to get the job market a little bit weaker.
Again, that's absolute horseshit. You cannot get it done. Businesses are reluctant to lay off. It takes a lot of capital to retrain rehire.
They're gonna wait till the last second to lay off people. But let me tell you something. when they do, it ain't gonna be slow. It ain't gonna be controlled.
It's gonna be a very violent massive wave of layoffs. And the fact of the matter, the FED doesn't want you to know this because they don't want to scare you. But what they're trying to call is to go from 3.7 to four and a half or five percent employment. That's a violation of the Sam rule.
The samurai basically says have a percentage point of increase in the unemployment rate within a year off. The three-month average is a massive recession, which is exactly what they're trying to cause they ain't in a soft Landing So if you look up the samuru sahm, you're going to figure out that this soft Landing thing based on what Jerome Powell himself said is literally impossible. I Just finished my five minutes I Gave you everything he said in five minutes instead of the hour of a speech so you don't have to watch the speech if you appreciate it. If you like it, subscribe to the channel.
Now hit the like button I'll see you in the next video later.
Coz FED did not take into account the CPI came out Tues Dec 13th and the job numbers FED used was from 6 months ago
Great summary, Tom. Thnx!
For those who can’t watch full video
Fed = HorseShit
I love it Tom 😂
Would you short the S&P now?
We need to take control of our government B-4 it kills us all.
It makes zero sense that at the same time politicians are giving incentives to re-shore manufacturing, which will require an even larger work force, Powell is using the interest rate cudgel to raise the unemployment rate.
He has said that they would need several data points to make decisions… That is nothing new…
Tom, with how bearish you talk, I don’t understand how you’re in the market. Explain this for me? Thanks
Thanks for breaking down the mess🤦🏾♀️
When has Powell ever been right.
We are effed!
How could his speech be anything other than hawkish? If he shows any weakness in speech then everything could go crazy. He needs to keep speaking strongly right now. However keep and eye in the ACTUAL ACTION taken…..already tapering down to 0.50% and not likely to be much more coming if CPI keeps trending down. Rate cuts could easily be as early as Q2
If the market keeps doing what it's doing is soft Landing is already in progress. You drop two pull up one. You keep doing this into your Underground safely. As opposed to nose diving to the ground.
Hi Tom, despite the hawkishness, market is still not crashing. Isn’t that a signal that Fed hawkishness is not correlated to selling off of the market? I don’t think the market is so ignorant or defiant.
He said blow your load right away lol 😅😂.
Jerome Powell is the Marie Aintonette telling you. Go eat cake. This man needs to be recalled and thrown in ducking prison.
Dear god. Please.
PLEASE call Jerome Powell “home.”
When are we going to realize the Federal Reserve is a private bank and their priorities are not those of the American population?? We are being fed more gas-lighting by them and the fed government. We had Biden claiming we are not in a Recession. Really?? Look at the Fed right before the 2008 crash and recession. The Fed is destroying our economy and the people's reserves are being drained away, all their wealth is gone, on purpose! They handed out $13 trillion to their corporate lackies and banks. That printed paper money must be converted to real assets. And that's being converted from the private sector!
Where’s your boy money talks
I'm just really mad that they want to crash the labor market…it's a good example of class warfare.
He's lying his feet stink and his nickname is doo-doo.
The death by 1000 cuts approach will cause a depression instead of just recession it’ll be more prolonged oh well better for me lol blood in the water means more food for us sharks!
Hard to believe stocks are still fighting the Fed. Guess there are lots of smug investors out there who think rates going down is a positive when they’re actually signaling recession.
Tom Nash, always spot on!
🙏
Thanks Tom! 👍
I don't feel that he was hawkish, he just repeated basically all he said in the last meeting/live speech a couple of weeks ago. I think there are too few levels of interpretation for how he's approaching all of this. It's always either hawkish or dovish. Seems to me it was in the middle and we should have a five point basis system to define how good or how bad his speeches and answers are, like 1=superhawkish 2=hawkish 3=neutral 4=dovish 5=superdovish To me, this FOMC meeting speech and answers was all neutral. Inflation is gradually and constantly declining, slowly albeit, but it's still going down and at the pace it is going it would be back to 2% sometime in the next 12 to 15 months. If we get a recession or not and whether it will be a hard or soft one and/or a hard or soft landing are all arbitrary topics. In my opinion, we are in a recession, inflation is under control, they are doing the right thing by lowering the rate increases and if inflation continues on its current path they should be able to either lower it again or pause in February – March as the two will cross over each other (inflations vs rates) at which point it would be wise to pause and let data point to where the next move should be, logically follow the inclination or declination, whichever it is. If they overdo it, that won't make things better. If they at least give a chance to people and businesses to breathe, they'll have a stronger economy and jobs won't have to be lost, unemployment won't have to be too high and the recession will be short lived and we'll be back on track sooner than later.
He needs to be FIRED!
Only the gullible and the mainstream media will gobble this up.
Jerome Powell IS NOT A SMART GUY. There are thousands of people who could do the job better.
"Soft landing"=transitory inflation. All horseshit!
what happened to money talks?
The U6 number is over six%. They're morons.
Inflation is always a monetary phenomenon {Milton Friedman} The Biden administration printed 7 Trillion Dollars in the last two years. Other governments did the same. Ipso facto you get inflation.