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In this video, I cover how the Fed is internally divided over massive uncertainty ahead.
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Soundtracks provided by LCS, Nanobyte, Emphermal, Defyant, and Lakey Inspired
Copyright Disclaimer Under Section 107 of the Copyright Act 1976: All rights belong to their respective owners.
Disclaimer: I am not a financial advisor and this should not be taken as financial advice. This video is for entertainment purposes only. Please consult a certified financial advisor for assistance.
Over the past 12 months, we’ve seen the Federal Reserve influence the financial markets in a major way. Massive bond purchases and low-interest rates by the Fed have set the stage for an unprecedented economic environment. Ever since then, the Federal Reserve has acted as if everything was under control when the truth is that this unseen printing has led to extraordinary levels of uncertainty. In this video, I’ll cover how the Federal Reserve’s frightening division just got leaked and how our current economy is a giant experiment. Welcome to Casgains Academy. If you’re new to the channel, please consider subscribing for more content like this, and let’s get right into it.
The US economy is rebounding extremely quickly, with prices already up 5% year over year and 0.6% month over month in the most recent inflation report. The Federal Reserve has touted this inflation as transitory and exaggerated from the base effect, which is when negative numbers are compared year over year with positive numbers. However, although clues about a division within the Fed were apparent, we haven’t seen this division confirmed until recently. The Federal Reserve comprises 18 officials that help create projections about what will happen to the economy. In the most recent federal reserve meeting, these projections not only changed dramatically from previous projections but also clearly manifested the range of opinions. First, to start with inflation, the Federal Reserve recently revised its projections upwards for inflation by an entire percentage point. The previous projection was that prices for personal consumption expenditures, also known as PCE, would increase 2.4% year over year. Now, that projection has increased to 3.4%, drastically above the previous estimate last month. The Fed’s explanation behind this move upwards was because of bottleneck effects, as they concluded that supply chains are heavily constrained at the moment. However, there could be something else more dangerous going on that the Fed isn’t addressing, which I’ll explain soon.
As I’ve covered in a previous video before, there are two types of inflation, supply-demand inflation, and monetary inflation. Monetary inflation comes from increases in the money supply and supply-demand inflation comes from supply constraints or increases in demand. The Fed chairman, Jerome Powell, believes that the current inflation is from supply-demand inflation, but is clearly leaving out the other factor, which is monetary inflation. The money supply has increased dramatically over the past 12 months, and not surprisingly, this should increase prices. In addition to these statements, the Federal Reserve had varying opinions on projections for interest rates. The median projection for the federal funds rate, which is the interest rate that banks charge each other for holding money overnight, has increased substantially. The Fed now expects that interest rates will increase considerably by 2023. In fact, the median projection is that there will be two interest rate increases in 2023. That isn’t that surprising, as interest rates can’t stay at 0% forever. The more concerning part is the variation between the Fed officials on what interest rates will be at, which you can see in the following clip.
The fact that interest rates are so spread out for 2023 clearly demonstrates how the Federal Reserve has no idea what’s going to happen, which the Fed chairman addressed in the Q&A.
Clearly, the Fed has no idea what the future is looking like. A variety of polarizing opinions are coming out from the Fed officials every day. For example, St. Louis Fed president James Bullard stated that he thinks the first interest rate hike will come as soon as 2022. Bullard cited the improving labor market as a sign that the reopening is occurring faster than expected. Not only that but he also mentioned how the Fed needs to contain inflationary pressures. Within just hours after this statement, the Minneapolis Fed President Neel Kashkari stated how he thinks the Fed should keep interest rates at zero until 2023.
In this video, I cover how the Fed is internally divided over massive uncertainty ahead.
My Second Channel:
https://www.youtube.com/channel/UCPkDot_lMk7HB_c68HubbUg
Twitter: https://twitter.com/casgains
Instagram: https://www.instagram.com/casgainsacademy/
Soundtracks provided by LCS, Nanobyte, Emphermal, Defyant, and Lakey Inspired
Copyright Disclaimer Under Section 107 of the Copyright Act 1976: All rights belong to their respective owners.
Disclaimer: I am not a financial advisor and this should not be taken as financial advice. This video is for entertainment purposes only. Please consult a certified financial advisor for assistance.
Over the past 12 months, we’ve seen the Federal Reserve influence the financial markets in a major way. Massive bond purchases and low-interest rates by the Fed have set the stage for an unprecedented economic environment. Ever since then, the Federal Reserve has acted as if everything was under control when the truth is that this unseen printing has led to extraordinary levels of uncertainty. In this video, I’ll cover how the Federal Reserve’s frightening division just got leaked and how our current economy is a giant experiment. Welcome to Casgains Academy. If you’re new to the channel, please consider subscribing for more content like this, and let’s get right into it.
The US economy is rebounding extremely quickly, with prices already up 5% year over year and 0.6% month over month in the most recent inflation report. The Federal Reserve has touted this inflation as transitory and exaggerated from the base effect, which is when negative numbers are compared year over year with positive numbers. However, although clues about a division within the Fed were apparent, we haven’t seen this division confirmed until recently. The Federal Reserve comprises 18 officials that help create projections about what will happen to the economy. In the most recent federal reserve meeting, these projections not only changed dramatically from previous projections but also clearly manifested the range of opinions. First, to start with inflation, the Federal Reserve recently revised its projections upwards for inflation by an entire percentage point. The previous projection was that prices for personal consumption expenditures, also known as PCE, would increase 2.4% year over year. Now, that projection has increased to 3.4%, drastically above the previous estimate last month. The Fed’s explanation behind this move upwards was because of bottleneck effects, as they concluded that supply chains are heavily constrained at the moment. However, there could be something else more dangerous going on that the Fed isn’t addressing, which I’ll explain soon.
As I’ve covered in a previous video before, there are two types of inflation, supply-demand inflation, and monetary inflation. Monetary inflation comes from increases in the money supply and supply-demand inflation comes from supply constraints or increases in demand. The Fed chairman, Jerome Powell, believes that the current inflation is from supply-demand inflation, but is clearly leaving out the other factor, which is monetary inflation. The money supply has increased dramatically over the past 12 months, and not surprisingly, this should increase prices. In addition to these statements, the Federal Reserve had varying opinions on projections for interest rates. The median projection for the federal funds rate, which is the interest rate that banks charge each other for holding money overnight, has increased substantially. The Fed now expects that interest rates will increase considerably by 2023. In fact, the median projection is that there will be two interest rate increases in 2023. That isn’t that surprising, as interest rates can’t stay at 0% forever. The more concerning part is the variation between the Fed officials on what interest rates will be at, which you can see in the following clip.
The fact that interest rates are so spread out for 2023 clearly demonstrates how the Federal Reserve has no idea what’s going to happen, which the Fed chairman addressed in the Q&A.
Clearly, the Fed has no idea what the future is looking like. A variety of polarizing opinions are coming out from the Fed officials every day. For example, St. Louis Fed president James Bullard stated that he thinks the first interest rate hike will come as soon as 2022. Bullard cited the improving labor market as a sign that the reopening is occurring faster than expected. Not only that but he also mentioned how the Fed needs to contain inflationary pressures. Within just hours after this statement, the Minneapolis Fed President Neel Kashkari stated how he thinks the Fed should keep interest rates at zero until 2023.
Most of the inflation that's been measured so far is from stuff like car rentals which we know has been severely hit by people traveling after the pandemic and not the inflation in actual staples like milk and bacon. This video leaves that kind of information out entirely. It is not a good analysis. Just another clickbate video from a guy trying to sell you stuff.
If you know this is going to negatively affect the market, why not just all in on the BATS VXX? aka the "batshit crazy times we live in" ETN.
well let me correct you here -> "we have been fighting inflation that has been to low and interest rates that have been too low" – actually makes sense. through lower interests rates they tried to get inflation to rise. at the same time they need inflation to move up interests rates cause they cant keep them at this low level, because when the next crisis arive, there will be no room for stimulating the markets. so interests rates have to rise in order to lower them again in the next crisis. but interests rates can only rise when inflation rises with it in order to justify higher interests rates. and higher interest rates around 2-3% not necessarily need to be bad for the economy if there is enough growth who supports higher interest rates.
Bottle neck effects… Not. Inflation temporary?
Billionaire greed. Corporate Feudalism.
From housing to farm land.
Corporate Greed is a leach that has sucked the blood from the poor and middle class…
Modern Monetary Theory = Biden Socialist $10 Trillion Deficit = Hyper Inflation = Massive TAX on 80% of Americans …. Brilliant
Here's a crazy idea: Why not let the free market (i.e., freedom of choice) determine prices and rates according to intrinsic price discovery of supply & demand?
Don't lie to us again. I do not believe in inflation. Market has its own way to re adjust back to where it suppose to be. U all have been publishing fake news to make small player sell their stock and so you can buy at lower price and after few months put good news so u all can sell and make small player lose their profit. We have been missing so much opportunity because of fake news and the news has been publishing Inflation since 2007. The stock will never stop moving upwards . Buy good companies and hold like warren buffet. He is the only person I trust in stock.
Dream on!. Look at any increase in interest rates and you see two losers US Treasury interest charges clod in on one trillion. US dollars and rising per year and collapse of US Banks!.Powell will not give us a projection for 3023! Biggest problem for USA is that while USA GDP growth is minimal. China and East are developing an economy which is self sufficient and fos not need USA. Worse still Russia and China have built their military capacity to a level that USA cannot guarantee that USA and allies will win WW3!. Lord Callaghan when UK P. M. SENT UK troops onto the streets of N. IRELAND. The night of the announcement Callaghan received a private phone call from a leading expert on military strategy warning him "you have started a military campaign and sent troops to quell civil riots!. However you have no plan as to how you can get troops out of N. Ireland!. Act in haste regret at your leisure!." This proved to be an accurate assessment as opposition IRA raised level of violence!.
This economic downturn is much worse than the Great Recession. The stimulus during that time was too little and too late. I trust Powell will not make the same mistake again. Since this downturn is worse more stimulus is needed.
Thank you for showing us your point of view but honestly I get the feeling you try to create a lot confusion here. The economy and the market are going to be fine. We got the worst already behind us. There is no reason trying to create insecurity. Relax and think positive. ✌️😃
On paper, I agree with you. But one of the side effects of the rona is that most of the money went into whale 🐳 bank accounts . Where it will stay for the foreseeable future . The supply issue only becomes a thing if the money being used . It’s just sitting . I’m not convinced inflation will run amuck .
This video is very poorly done. I already know what the talking heads said. You saying they are wrong without providing any reasoning is not helpful
Drag powell and all the other central bankers outof the Eccles building and execute them on the front steps. America saved.
Rich people have put these morons in place to make sure that rich will be richer and poor will be poorer. Powell and Yellen are just idiots playing with fire!
Dud yoy is comparing when covid first hit. Everything is fine when interest rates go back up next year or 2023
Why do we need central Banks or even IMF, there is a better system. Does any human control the rising or setting of the Sun, no human controls it yet it has worked perfectly through ages. Humans are not good at managing power all through history it's been proven. Decentralised Blockchain technology is the answer to a peaceful world, in short Bitcoin is the final answer.
The safety net for the boom-bust cycles of the main economy is already here: cryptocurrencies. Unfortunately there is none yet that has a demurrage, that would be ideal for use in common payments.
yes sure all people working for the FED are idiots and we are all doomed. everyone here has less clue about economics and does not have access to key data than the FED. do you really believe its in anyones interest to let the worlds most important economy collapse and as a consequence the world order would collapse? no matter what you say or hear, the world will continue and will continue just fine. the world wont collapse at all. stop the panic and just let those people in charge do their job.
Biden's Green Plan – US Government spends until inflation makes basic goods and services out of the price range of the average citizen
US Fed thinks it has time on its hands as inflation is temporary and US Banks must be protected! Compare this attitude with "hands on" Chinese determination to keep developing China and East which is starting to raise China GDP!. Question that Gates Foundation need to explain why has China has so many vaccines waiting approval?.
No. Depending on how the money printed is distributed you have different results. Give it to billionaires and you'll have an inflation in the stock market. Give it to people in need and you will stimulate the real economy…
What a relief! Printing massive amounts of money does not cause Inflation. What a novel concept.
The Fed is completely political. Yellen is a joke. The Government has created a debt they cannot pay back. They can only inflate it away.
M1$ growth April 2020-21 YoY = 297%
Apr 2021 M1$ 18,935.2bn
Apr 2020 M1$ 4,773.3bn
B of A coined it "Transitory Hyperinflation".
It's come down to 18% May 2020-21 YoY.
Historically, the Fed has never been correct in their forecasts, they have never been able to maintain inflation at their stated 2% target. Why anyone believes these people is a total mystery to me….The Fed has one tool – creating USD – their promissory debt obligation notes.