Well, hello: everyone today is going to be a big day today is going to be interest rate liftoff day and we've got a lot to prepare for and talk about once we get the new summary of economic projections in addition to jerome powell's live testimony in front Of reporters, as well as his q, a session which will all begin in about 40 minutes in 10 minutes we're going to get the new summary of economic projections, so we're going to go through some baselines. First, we're going to compare expectations that i have to what markets have and then we'll compare to what's actually happening. It's obviously a big day and in case you're wondering why i am wearing this beautiful chef's coat. It's because there's a coupon code, expiring march 25th, link down below called kev's kitchen for the programs on building your wealth in those daily private live streams with me all right.

Let's talk about the projections that we have so. First of all, this is the last summary of the uh summary of economic projections that we got december 15th. It's been a while so we're going to get a new summary of economic projections, the sap today and what i've done is i've kind of written down. Some numbers that that i believe we might see some of these changes head towards.

So we're going to look at the median and the range median. I'm thinking we're going to go we're going to see a revision downward in gdp somewhere between probably like 3.5. Anything less than three is going to be a little bit more concerning. If we start getting numbers really low like a one or two, then that's going to create more of those stagflationary recession.

Fears right. We don't want that the unemployment rate we expect this to sit at 3-5, we'll see what happens with the fed's expectations for inflation. I expect that these will move up, although i don't think this is going to be much of a big big mover here. We're already seeing the 10-year treasury yield move up by the way it's almost at 2.2 percent, uh and uh.

The biggest thing is going to be this bottom section here, i'm expecting them to come in at about 1.6 for what they think rates will be by the end of 2022. If they come in with something like two to two and a quarter percent, that's going to be a little bit of a shocker to markets. Now i'm going to take an orange color here and i'm going to tell you what the projections are for the uh for from bloomberg here. So the projections from bloomberg would be a gdp of 3.6, so i was pretty close with that 3.5.

Not so much with that 3.0, the pce we're thinking uh, potentially a move up or bloomberg, is potentially a move all the way up to uh five. Let me get that number right here: six, a year over year, maybe 6.1 by the end of the year. Probably five maybe move that pce up to five. That's the bloomberg estimate here and do we have any forecast here on fed funds at the end? Yes, we do bloomberg's really close to me.

1.55. That's wild! Okay! That's really cool, so uh! So i'm i'm pretty much in line here with bloomberg, but uh in orange, just in case just to recap this orange right here on the side. These are the expectations from bloomberg. Economists about 50 of them.

The red uh, are sort of my expectations and uh. Then, in terms of uh, which i threw 4.5 in there for inflation, so we'll see and then in terms of what what actually ends up happening will be the fed. If we get numbers that are closer to the blue numbers, that's going to be a little bit more of a pain shock, and so we don't want that now. If we look at a little bit more broadly at just what the markets are doing right now.

Obviously, the markets last probably what 36 hours have been in a little bit of a rally mode, and this is expected, because i really believe, there's a high likelihood that if we just get, if we just meet expectations here with the fed, we're not getting a rug, Pull and we're really licensing the market to potentially relax just chill out. We've got all of the negative catalysts, mostly priced in at this point war recession, stagflation, high inflation. The next cpi report for next month is already priced in. If anything, it's probably priced in worse than we actually expect, and that's because we've already seen commodity prices start rotating down.

I mean look at this. You've got brent at 98 dollars a barrel. You've got the 10-year treasury running up to 2.2. This is still a bargain.

Folks, i believe that the 10-year treasury will probably run up to 3 and that's when you're probably going to start seeing those real estate pressures as well because see with the real estate mortgage rates. The 30-year mortgage tends to trend along with the 10-year treasury, uh, and so the more we see this 10-year treasury go up the more i expect some pain coming to real estate. I i don't think we're going to see like a 2008 kind of recession with real estate, where we see a 30-40 decline in prices, but i wouldn't be surprised to see a five to 15 percent uh. You know decline in real estate prices, at least in the short term.

Jerome powell himself has mentioned that, and i expect him to reiterate that today that he expects his interest rate actions to ultimately cool the housing market. Now something else to remember that jerome powell told us in his testimony a couple weeks ago, was that he expects the rate hike cycle now to be very much like that of the early part of the century, which the early part of this century would be. The 2004 rate hike cycle and, if you don't remember, that's okay i'll tell you. There were 17 increases of 25 basis points in a row.

If we had 17 increases in a row which, if we had something similar to that, we had 17 increases in a row. Uh, we would be, i believe, 4.25. Let me quickly just do the math to check we're at zero now, so the lower bound at 17 increase yeah would be 4.25, so that would take us all the way to about a 4.25 rate and the 17 increases would take a while, probably take about through The end of 2023 to actually happen, but, of course, we could end up seeing the federal reserve u-turn and start taking some meetings off and not hike every single meeting in the event that inflation numbers actually start inflecting down, which, if we look at some of the Data that we've had recently, we know that the bureau of labor statistics, uh, has has released a plethora of information here recently and even the commerce department today that uh that gives us some cause for, in my opinion, relief, for example. We're not seeing right now that wage price spiral - the last labor report showed us a zero percent month-over-month growth in uh in wages which not so good for workers, but in terms of avoiding a wage price spiral.

This is actually a good thing. We saw uh ppi core ppi came in lower than expected, which is a good thing. We know that core cpi is coming in at a much lower rate about uh 0.6 percent month per month, so about 7.2 percent annualized, which is lower than that headline 7.9. We expect that headline number to be even larger next month, maybe as high as eight and a half to nine percent, depending on how these oil prices, how long they actually end up staying up uh so far, we're starting to see that kind of collapsing commodities again, Which we expected right a couple weeks ago, i think you might remember.

If you watch the channel regularly, i was regularly saying hey. You should have some trailing stops for wheat and oil and energy price if you're in them, because uh high commodity prices last short term because of fear and uh and fears can tend to evaporate very quickly because we quickly become used to our new reality. Those fears go away and then prices come down, so not a surprise at all that we saw those prices come down but again. So when you look at cpi ppi and wage price spiral, these are we're actually starting to see some early signs of of positivity here, which is good.

And if you look at the commerce department's retail report this morning, if you look at the uh sort of the critical core of the retail sales that on the video that i did this morning, you can watch that video yeah we came in. We were expecting retail sales to go up 0.4 in that category. They actually came in at minus one point: two percent: you know once you take out food building materials, gas and uh, there's autos. Once you take up those four sections, i mean spending is going down led primarily by e-commerce and that's a good thing, because it helps eventually create disinflation.

The less demand you have, the more disinflation you create so uh, that's gon na, be something we're probably gon na expect to hear. Jerome powell talk about uh. I would certainly be hunting for jerome paul to talk about these three things. Uh make sure he's paying attention to these.

I imagine he is i'd, be curious to see him chime in on retail sales. Uh housing market, i think, is going to be a big deal and then certainly this potential for the 2004 style. 17. 25 basis.

Point hikes in a row will be very interesting, though again, j pal is probably going to tell us: hey we're going to be data dependent, we're going to start here with, with the 25 basis point liftoff, we'll take it from there uh and and then we'll watch, We'll just be data dependent, they're, going to be very patient here, so they're not going to give us a big road map. As long as we don't get rug pulled here, i'm bullish and i'm not expecting a rug pull at all. I don't think you should either, but who knows, take a look just a moment here at the spy. Look at that perfect bounce there off of the 430, both in the pre-market there not as perfect in the pre-market but uh also just now in the last hour.

Here had a nice little uh bounce there right off that 4 30., and this is one of the things we talked about in the course member live stream this morning is that i was very much expecting that prices would potentially fall going into the meeting, even though We had a very strong retail, buy the dip movement this morning and, of course, a lot of positivity out of uh chinese stocks because of uh. Well, no surprise the communist party's intervention, suggesting don't worry, we still want to go to the moon. I don't know why. I sounded german there but uh and then of course we did have that uh that earthquake uh.

I think it was like 60 kilometers, underneath the sea as wild uh 7.3. Nowhere near that 8.9, we saw with that last fukushima disaster. So far, no evidence of elevated radiation levels, which is very very good. We do not want to see elevated radiation levels, so we are now uh sitting.

Actually we should pretty much right now. Have the new sep, okay uh, we have, let's see uh the fed, expects inflation to return to two percent. Objective uh fed raises key overnight rate to 0.25 percent, so we got our first hike. Bollard was in favor of raising 50 basis points to this meeting.

The vote was 8-1, so they did not have a unanimous vote. A1 saint louis fed president bullard dissenting bullard wanted to do the 50 basis. Point hike, but eight of the others said no go uh that they stuck with the 25 basis. Point hike.

So we got the 25 basis point hike we expected fed expects inflation to return to two percent uh labor market to remain strong. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic. Higher energy prices, broader price pressures fed, says invasion of ukraine by russia is causing tremendous tremendous human and economic hardship. Uh implications for u.s economy remain highly uncertain, but in the but in near term, invasion and related events likely to create additional upward pressure on inflation and weigh on economic activity.

Uh, so weighing on economic activity is actually something that towards the second half of the year. Will likely bring inflation down right, fed's website's down right now, but don't worry. I've got other sources here. Uh 11 of 16 policy makers see the fed funds rate above 2.4, neutral rate by the end of 2023 fed expects to begin reducing holdings of treasuries and agency-backed mortgages at a coming meeting.

Okay, so no clarity on that yet and a little bounce on the rates on reverse repos uh, that's fine! I want to get the set. We do not have that yet, but uh this is uh. This gives us a little bit of a summer here. I've never seen the federal reserve's website this freaking broken, but that's okay, we'll we'll get this up in just a moment.

Oh here we go uh all right, good, so again, uh we are up a quarter of a percent as we expected and it was uh done. We were actually expecting a a unanimous vote on this one, so getting bullard throwing in that no vote was a little bit of a surprise. The sep is not posted. Yet, oh, no! No! Here it is.

I got it now. Okay, it's loading, give it one! Second, here for the sub come on uh economic projections are the things that we want. Remember. Jerome powell did tell us that he was expecting to revise these.

This service is unavailable. This is ridiculous. You know they should probably cash their website or something like or get some cloudflare or something uh in here uh, you are seeing the uh s p right now, move a little bit below that support level. For my briefly dropped below that support level.

There did people really expect that the fed was not going to raise rates today. I don't know waiting to get that step here, and so it looks like it's almost fully loaded again uh 8-1 vote here with bollard going for that 50 basis, point hike, uh, not getting it. Obviously this is uh. This is the first time in a while.

We haven't had a unanimous uh move by the federal reserve. Uh, not a surprise that ballard it was the one who uh voted for the 50. he's he's. The one who's been coming out talking about wanting that one percent hike for a while yeah, so really uh highly unsurprising here.

So a lot of a lot of volatility right now, you can see here on spy sort of just bouncing around uh on the mark. It's a little bit unsure, which direction to go, looks like trying to try to pull down a little bit. I think everybody in the world right now is trying to load this summary of economic projections and we're uh we're about 80 percent of the way there. So let me see if bloom already has it they might um.

Okay fed has lowered its median understanding of long-run policy rate is now 2.375 percent, not 2.5 median dot. Plot forecast for fed funds rate at the end of 2024 is 2.75, so that's an overshoot uh. Okay, still waiting for sep here, inflation forecast 4.3 for the end of the year. That's uh, that's definitely more realistic, but higher higher than expected quarter, point rate hike as promised.

That was no surprise. Uh fed's expecting 3.5 unemployment at the end of 2022 and 2023. This is something that we had talked about as well that uh in the summary of economic projections. They usually leave it at a floor of 3.5 that they don't go below that all right finally got it geez.

That was crazy. All right here we go so this is the set the they came in at uh, pc core pc 2.6. Are you kidding me for uh? Okay, but then there's 20? 22? Oh, we got. We lost the 2021 column.

Okay, there we go 4.1 is where they came in here with this uh with the pce for core headline 4.3 at the end of the year. Oh, they went with the two. Oh no, that's! What i was saying would be bad. Oh, that's not so ideal hold on a sec.

Let me put this in so where i can mark it up. Oh, they really pushed gdp down that uh. That was not what was expected. So that's going to be a little bit of an ouchy wachi yeah.

Take a look at this, so this was the last step here right and remember what i wrote bloomberg was expecting uh 3.6. I was expecting either a 3 or 3.5 and i said if we saw something with a one or two. It was not going to be that great. Unfortunately, folks, look what we got the fed, really uh, seeing a slowdown here in gdp.

Look at that 2.8 for 2022 and uh they left 23 and 24 the same, but a big revision down there on uh gdp for uh for 2022. Don't like that! No surprise uh here, with the exception of this look at this: they actually ticked up the unemployment rate a little bit in 2024. So that's a little odd uh. Why? Why they're doing that and uh pce bloomberg was expecting five.

I wrote down 4.5. They came in at 4.3, so i was closer than uh, then bloomberg yes, uh and then of course, the fed funds projections here, oh also higher than expected, remember bloomberg was expecting 1.5. I was expecting 1.6 and i said it would be a bad day if we saw something like two or two and a quarter percent. Look what we got folks 1.9, that's hotter than expected so uh! This right here is a sad face.

This right here is a sad face, and then honestly, this right here is a sad face. This is not not ideal. This is not what we wanted, uh from from the summary of economic projection, so i'd say right now. This is, this is a worse summary than we were expecting.

If we go out to, we should be able to get to the dot plots here. Yeah, here's the dot plot for rate hikes. Let's see what we got over here, so in 2022, uh, oh yeah, you've. Definitely got a strong median poll right here at about that 1.9 percent and you've - probably this is probably bullard over here - look at him call for basically three percent by the end of the year.

I mean this is paul, volcker. You know right over here uh, but but definitely going into that two to three percent range without a doubt by 2023. What's the median estimate here for 2023, let's pull that median estimate for 2023. Oh yeah, look at that! You got 2.8 percent right here uh, but they expect to actually stay relatively stable around there.

Let's see the range oh yeah see. Look at that crazy range here, 1.4 to 3. That's a wild range there, but again, probably bullard, being a little uh, hawkish uh, which is very common this. This is him.

You could pretty much assume. That's him right here, but again uh. The bloomberg was expecting us to be right about here. I was expecting us to be right about you know, probably where those lines are right here and uh.

We ended up, unfortunately, right there so uh. This is. This is another sad face right here, worse than expected, so it does also look like. We've got yield spiking a little bit, which is not surprising.

You would expect that we've got bond deals yeah. Now, we've got that 2.2 on the 10-year uh. This is definitely now pricing in a uh, essentially a 25 basis, point hike, every single meeting and potentially honestly that 1.9, i mean they've only got six meetings here left. Oh sorry, now they have seven meetings, including today in total.

So seven times point two: five: let's understand this seven times point two: five, that's very interesting! Is this the upper bound or the lower bound? They don't tell us uh, that's quite odd! I would assume this is the lower bound but 1.75 equals 7 25. Bp hikes right uh. This right here is pricing in eight uh eight by year end and that's a problem because that means at some point we're getting that 50 basis. Point hike uh unless of course this is just uh like how else are you gon na get to that? There's no way.

You'd have to have a 50 basis. Point hike at some point. So that's very odd and, and it's unclear whether this fed funds rate is uh, i think it might be a mid mid-range. No, that could be the seven hikes then see how last time they had this at point.

One remember the way these rates work is when we're at zero. It's actually a range of zero to uh 0.25 and now we're at a range of 0.25 to 0.5. If we get seven hikes, seven hikes would put us at a range of one point: seven five to two. So i guess that's not necessary.

I guess if they say 1.9, that's more of sort of showing that midpoint there and not necessarily saying eight by year end, but it's definitely seven yeah, so so you're. Definitely looking at seven here that gdp forecast or that that decline in gdp - i'm not very happy about that. I did not like that one at all, because this is a you know. This was my concern is that they would go dark over here and we definitely saw this.

Of course, i expect that wars is pushing things down here, a little bit as well, but uh not ideal. So, let's see what else we have here. As far as the statement, probably i mean generally, the statement itself is not super exciting, so indicators of economic activity and employment have continued to strengthen job gains, have been strong in recent months. Unemployment rate has declined substantially.

Inflation remains elevated, reflecting supply and demand imbalances. This makes sense. The invasion of ukraine is creating tremendous economic hardship. The implications for the u.s economy are highly uncertain, but the near term, but in the near term the invasion and related events are likely to cause additional upward pressure and inflation away on economic activity committee.

Seeks to achieve maximum employment, two percent longer one objective, so they're maintaining this two percent objective here previously there were implications that we might actually see this get revised up continue to monitor the implications. The committee would be prepared to adjust, if necessary, if new risks emerge, of course, okay, so yeah as expected, nothing here at a coming meeting, so so no clear drawdown yet in terms of when we would expect to see uh. You know our um our drawdown on the federal reserve's balance sheet, but uh this summary of economic projections not not ideal uh from a couple angles again: the change in gdp here less uh lower a lower gdp than expected 2.8. Definitely a lot lower than what the market expected market was pricing in a 3.5, so uh i was thinking either three or three point: five myself, but so seeing uh seeing a 208 is not good.

The uh. This increase in the unemployment rate a little odd again. Uh no surprise on the the inflation number going up. That's not that big of a deal they do see that inflation number going down here, which is good but uh this.

This uh leaving really no room for a meeting without a hike this year and, of course, you've got ranges over here. Let's understand these ranges, specifically the unemployment rate uh uh. Well, i wonder see they always give this outer bound here. Somebody's always voting for four percent.

Yeah, that's not too helpful over here. Uh gdp, though look at the ranges that we had. Oh my gosh look at that. That's not good at all, so the ranges were as low as 2.1 percent for gdp for 2022.

uh, that's terrible! That's very bad uh and something that i alluded to as well. In my initial uh uh, you know prepare for the fed video and even earlier today that if we got something in that two range, that's not good so that the gdp decline. I i don't love. No.

I don't like that at all yeah uh spy's about to be break even and uh. You've definitely seen quite a few stocks, rotate uh down a little bit here, so market's definitely trying to figure out how to process this uh. It is, it is a little bit worse than expected. You can see this uh clear, clear drop here on the qqq.

This is uh, you know pretty much any stock. I think anything in the risk space is going to show this here. Uh look at wheat, though wheat still down about six percent. No, no real movement here on the wheat uh index and not a surprise gold see if we got any movement here in gold, a little bit of a move up in gold.

Do a quick, little btc check here, btc on the uh one hour, uh, let's go to one minute here! Yeah btc doesn't like this at all so risk assets moving down slightly on the report that we have so far, so we're not seeing a relaxation yet looking for sort of that floor where that selling pressure is going to stop hmm. Well, it's quite interesting yeah. Even the chinese uh risk assets here, like neo uh rotating back down a little bit so uh jpad has come out in about 15 minutes to start answering questions, and i expect that there will be a lot of questions about. Why are we seeing this uh? Why are we seeing what we have here, which is uh such a such a low range on gdp forecast, especially since you know so many people regularly say? Oh, but this? Why would the us gdp be affected? You know this crisis in ukraine.

Is a crisis in ukraine? It's not well, it's you get the global velocity of money, uh impact, unfortunately so and and fear fear leads to less spending. Fear leads to more savings, so the feds, i think, properly pricing in that lower economic growth, which is not going to be great for earnings of a lot of different companies, the exception, of course, those inflation, the companies that do well during inflationary times, companies doing well During inflationary times are going to be those with uh substantial pricing power. Now that doesn't mean that there are multiples, won't compress, which is a problem, but companies that will generally do well, though, of course, would be something like tesla does very well, but it's multiple still compresses right, so the premium people are willing to pay for tesla goes Down, even though tesla's revenue might go up due to inflation, uh right now, we're testing that 426 line on the spy looks like we just bounced off the 426 line on the spot. That could be a sign that just some of the excitement of the day is escaping and that maybe maybe we're going to bounce off of this here.

If, if, if we break through this, we're probably going to be right back to 420, which is not so ideal, that's right back to our zero percent fib line, and earlier we were, we were getting rejected by the 23.6 fib line. So it really tells us that the market was very tenuous going into this meeting here, sitting between the 23 fib and the 430 line on spy and uh getting a little bit of hope right here, which we've had before, but we'll see. If, if the market's now fully digested what we have here in the summary of economic projections or not, let's go through some more of the documents that we have here see what else one of the resources the fed gave us. So this is the the change in real gdp, again, not happy about uh what we got here, this uh this was substantially lower than expected and so we'll see what the actual ends up being here, this uh push-up and the unemployment rate.

I don't know if it's something that is going to be worth paying attention to right now. Obviously, the dot plot came in more aggressively than expected, so a little bit more of a hawkish fed here. Overall distribution of the gdp ranges yeah. So take a look at this, so the march projections are these boxes here, and this is where you got that distribution of gdp.

So you can see a lot of folks right here. Actually uh, i mean the only reason you had some weight up here is because it looks like you had about six folks push for about that three percent range on gdp. But if you add up the bottom over here, look at this section over here i mean that's one, plus that's five total plus about three. That's eight! You got about eight votes right here roughly, so i'm reading that right, roughly somewhere around eight yeah yeah i'd, say about eight votes right here for uh for a quite a low gdp.

So i don't love that look at this perfect bounce folks right here. Look at that freaking, perfect bounce off of that 426 sign. Do you know you've seen this you've watched this channel for a while, and i that line has not moved in many many many many many months just because it works so well, uh. Of course it's the minute chart, so it is what it is, but i mean you could clearly see when we got rejected here at 23.

It was a sign. The market was going to be tenuous about this. I was expecting this drop into the meeting, but i will say uh this. This came a little bit as a surprise, but so did the results on the uh this this forecast.

Here i was, i was not uh, expecting them to actually come in under three percent and - and i even said, if we get something under three percent - it's not going to be good. So i don't like that. Forecast uncertainty, okay, going through the rest over here. No, this is nothing special, nothing else really special to see here.

Let's go back to the table for a moment and just look at 2023, their expectations here for 23.. We spent a lot of time on 2022 and jay powell obviously comes out to speak in about uh 12 minutes, but uh. Let's see what we've got here, you have the 2023 projection of gdp to be around 2.2 percent. The 2 percent of the longer well in 2024 and then 1.8 in the longer run, that's pretty slow growth.

You know when you get these slower gdp measures. This is oftentimes where you actually see uh. You know folks ultimately invest in tech companies, because they're trying to get growth and uh tech and innovation is, is what tends to do well in these low gdp eras. Here it's just that.

Stagflationary fear that we want to watch for, and i i don't like that. 2.8 but again we'll see looking at the ranges here. Let's look at the ranges here for the fed funds this this was wild. The fact that you got somebody here at 3.1, but looking here at the next two years, so really uh, 2023 and 2024.

It really wouldn't be a shocker to see the rate be somewhere around 2.8 to 3 percent at the fed, and this is actually going to be larger than a higher fed funds rate than what we had in 2018. Let's look at what we capped out at 2015.. I want to say it was two and a half that funds rate uh by the way so far one death reported in 69 injuries after the japanese earthquake. Okay, so take a look here at the fomc fed funds rate.

This is what we really want to look at. Here is what happened in 2018, so, let's just zoom in to 2018, there we go yeah, look at that. We couldn't even make it to 2.5 on the lower bound. So, in fact, let me just edit the graph here.

Let me see, can i just get the lower bound? No, not on this? Okay? Fine, that's fine! I'll! Just leave it as this. It doesn't matter so much uh, but we we couldn't break two and a half percent here and what you actually have in this report is a suggestion that we are going to go higher than we did in 2018 and 19.. So that's that's worth noting the uh max of i'll, say: 18 was uh just sub 2.5 and uh. Now the the projections are for a higher uh rate than we had in 2018., so uh.

This sort of reiterates the, in my opinion, that the call for patience in the market that this isn't the kind of market that we really have to rush into that there are going to be plenty of catalysts that that keep this market littered for a while. It's gon na be quite difficult. I expect for the market to get anywhere near those all-time highs that we had at the beginning of the year. I honestly wouldn't be surprised to see the nasdaq or or certainly the spy turned negative for 2022 when we come to the close.

But uh take a look at this here, so we capped out at 404 on qqq this year and we're down right now about a little less than 20 percent. So if we go current number 332 divided by 404, that brings us down about 17.8 percent on the nasdaq that we're down right now, of course, we had our. We had our death cross already, which oftentimes can actually be bullish when you see a death cross uh and and of course, you can see how we keep trending down on this fib uh. The trend is, is pretty disgusting right now, jay pal, coming out in about uh seven minutes by the way he's usually on time, which is great and uh yeah.

Let's take a look here on the one minute chart, yeah really struggling to try to get any kind of uh excitement here in the market. Doesn't surprise me, you still have a lot of companies doing quite well today. If you look, for example, at a trade desk or a firm uh, you know a lot of companies that have recently had sell-offs chinese companies. You still have green here, so the market's not so upset, but it it certainly.

It certainly got more bad news. So far than it got good news uh, the 10-year treasury yield is also skyrocketing. I mean i it's not like 2.24 right now. I am short treasuries.

That's the only thing, i'm short right now on, of course, uh uh course. Members could always see every single move that i make when i make it and uh get sort of a read on my portfolio at any time they want, if you haven't yet check out that uh coupon code kev's kitchen link down below for the program. So the price will be going up on march 6, uh, sorry march 25th, and the price does go up over time. I know.

Sometimes people are like oh kevin. It seems like there's, there's often a coupon. That is true, but the price goes up. So if you wait three months, you know it might cost another 75 to 100 bucks or so, and that's because i'm constantly adding value and content to it and so a quick shout out to um philip murdad, christine scrum.

I may have butchered that one sorry about that william matt emmanuel muhammad jamie matthew, welcome, looks like uh, oh matthew, we've got two matthews here, a matthew that joined the stocks in psychology of money and then another matthew who joined the real estate investing and william joined Real estate agent sales and looks like the rest of you all for stocks and psychology money all right, so uh, but anyway, this right here, the tlt. This is what you could go short on now. I will say something crazy if, if you think that rates are going to keep going up to like three percent or something like that, we'll say something crazy uh when i went short on tlt jp morgan told me that my rate, my borrow rate, because usually you Pay somewhere between three to eight percent to short a stock. If something's hard to borrow like an amc used to be, you know, you could be paying like 20 30 uh for an annual rate to short something.

When i went to short tlt uh around like 139 140 or whatever it uh, they were actually paying me to short it. They like i'm getting paid 0.58 shorted. So it's a negative borrow rate, which is quite odd but um whatever uh. I don't really understand how manipulated the markets can be like that, but oh well, of course, again the the flyers today being uh the chinese sector, and it really goes to show you how manipulated the market is.

Remember, though, with these chinese stocks that a lot of individuals are buying the adr shares like you and i, as retail investors, we don't have access to good, just go start trading in the shanghai or hong kong stock exchanges. So we buy the adrs, the american depository receipts yeah. Well, these are substantially more risky than than investing in the market over there, because if, for whatever reason, these got de-listed, the liquidity of these would substantially plummet uh. But seeing these sort of fluctuations shows you just how strong that chinese communist party is and they want to be right.

You know they. They don't want uh a democracy to win. They don't want capitalism to win, so it's not surprising or i should yeah. It's not surprising to see uh them come out with support against uh.

All of the original. You know. Tech, crackdowns and regulatory crackdowns they had uh markets also had a little bit of a boost. Yesterday, when raskin dropped out for the fed position, she was seen as somebody who was more of a uh.

You know someone who really wanted to go heavy into banking regulation and excuse me and uh climate change. Research at the federal reserve, so markets were reacted positively to her getting blocked by republicans. J-Pal comes out in about three minutes. Excuse me, so we'll see that all right, so let's see here um all right, faded polo.

It was nice. Knowing you you're gone a bunch of want to come in here and just hate, you can go uh all right, so you can leave those comments publicly in the in the free sections uh. So, let's see here, j-pal comes out two and a half minutes again. If you're just now joining we uh, we have some bad news: gdp projections, if you're just now joining gdp projections coming in, unfortunately lower than the market expected unemployment uh showing a weird tick-up in 2024 and uh pce coming in roughly as expected, but really that fed Funds rate coming in hotter than expected so fed funds rate hotter than expected gdp less than expected uh both of those somewhat stagflationary signals.

So not great, not great. I'm going to use my member chat to say thank you for handling faded flow. Well. Thank you.

Look at that loving member for for 14 months. That's amazing! Thank you. Meet chef kevin there. You go uh okay, 90 seconds for j-pal folks.

Here we go uh! Oh ten-two spread good question. Let me pull up the ten-two spread, my my hope. Okay, i'm gon na i'm gon na take a guess, i'm gon na guess. It may have briefly inflected back down, but i think this morning it probably ran up to three five i'm hoping like.

If we can get 35 bases point spread, that's good. It may have ticked back down to 32. Let's see it, it's oh gosh, it's terrible uh! It actually went down. It's uh at a 23 basis.

Point spread. I was very wrong on that guess: uh, because yesterday we were knocking on the door of 30. Again, we were at 30.. Actually we were over 30 this morning, holy smokes yeah here, i'll i'll show you the uh the day chart really quick uh one sec.

Oh that's terrible yeah. The the ten two spread did not like this. Look at that folks, oh see we were. This is what i was thinking is that earlier we were like 32 33.

You know maybe pushing up to 35. I expected we would get a little bit of a decline, but not all the way down to 23.5 basis. Points: that's rough uh, that's that's a good little drop right there and let's look at the spy j pal coming out in just a second here spy on the one minute. Look at these! Oh it's starting to break that line here.

I don't want to see that. That's not ideal if we start yeah we're starting to push through that line there. I don't like that. That is not a good all right sell some calls and hedge all right here comes jay pal.

Let's go here comes fed chair for jay powell. I want to begin by acknowledging the tremendous hardship the ukrainian people are suffering as a result of russia's invasion. The human toll is tragic. The financial and economic implications for the global economy and the us economy are highly uncertain at the federal reserve.

We are strongly committed to achieving the monetary policy goals that congress has given us maximum employment and price stability. Today, in support of these goals, the fomc raised its policy interest rate by one-quarter percentage point. The economy is very strong and, against the backdrop of an extremely tight labor market and high inflation, the committee anticipates that ongoing increases in the target range for the federal funds rate will be appropriate. In addition, we expect to begin reducing the size of our balance sheet.

At a coming meeting economic activity expanded at a robust five and a half percent pace last year, reflecting progress on vaccinations and the reopening of the economy, fiscal and monetary policy support and the healthy financial positions of households and businesses. The rapid spread of the omicron variant led to some slowing in economic activity early this year, but cases have declined sharply since mid-january and the slowdown seems to have been mild and brief. Although the invasion of ukraine and related events represent a downside risk to the outlook for economic activity, fomc participants continue to foresee solid growth, as shown in our summary of economic projections. The median projection for real gdp growth stands at 2.8 percent this year, 2.2 percent next year and 2 percent in 2024.

The labor market has continued to strengthen and is extremely tight. Over the first two months of the year, employment rose by more than a million jobs. In february, the unemployment rate hit a post pandemic low of 3.8 percent, a bit below the median of committee participants, estimates of its longer-run normal level. The improvements in labor market conditions have been widespread, including for workers at the lower end of the wage distribution, as well as for african americans and hispanics labor demand is very strong and while labor force participation has increased somewhat labor supply remains subdued.

As a result, employers are having difficulties filling job. Openings and wages are rising at their fastest pace. In many years, fomc participants expect the labor market to remain strong with the median projection for the unemployment rate declining to 3.5 percent by the end of this year and remaining near that level. Thereafter, inflation remains well above our longer run.

Goal of two percent aggregate demand is strong and bottlenecks and supply constraints are limiting how quickly production can respond. These supply disruptions have been larger and longer lasting than anticipated. Exacerbated by waves of the virus here and abroad, and price pressures have spread to a broader range of goods and services. Additionally, higher energy prices are driving up overall inflation, the surge in prices of crude oil and other commodities that resulted from russia's invasion of ukraine will put additional upward pressure on near-term inflation here at home.

We understand that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing and transportation. We know that the best thing we can do to support a strong labor market is to promote a long expansion, and that is only possible in an environment of price stability, as we emphasize in our policy statement with appropriate firming in the stance of monetary policy. We expect inflation to return to two percent, while the labor market remains strong. That said, inflation is likely to take longer to return to our price stability goal than previously expected.

The median inflation projection of fomc participants is 4.3 percent this year and falls to 2.7 percent. Next year and two point three percent in 2024, this trajectory is notably higher than projected in december, and participants continue to see risks as weighted to the upside. The fed's monetary policy actions have been guided by our mandate to promote, promote maximum employment and stable prices. For the american people, our policy has been adapting to the evolving economic environment and it will continue to do so.

As i noted, the committee raised the target range for the federal funds rate by one-quarter percentage point and anticipates that ongoing increases in the target range will be appropriate. The median projection for the appropriate level of the federal funds rate is 1.9 at the end of this year, a full percentage point higher than projected in december. Over the following two years. The median projection is 2.8 somewhat higher than the median estimate of its longer run.

Value and higher than 18 projections do not represent a committee decision or plan, and no one knows with any certainty where the economy will be a year or more from now. Reducing the size of our balance sheet will also play an important role in firming the stance of monetary policy. At our meeting that wrapped up today, the committee made good progress on a plan for reducing our securities holdings and we expect to announce the beginning of balance sheet reduction at a coming meeting in making decisions about interest rates and the balance sheet. We will be mindful of the broader context in markets and in the economy, and we will use our tools to support financial and macroeconomic stability.

As we noted in our policy statement, the implications of russia's invasion of ukraine for the u.s economy are highly uncertain. In addition to the direct effects from higher global oil and commodity prices, the invasion and related events may restrain economic activity abroad and further disrupt supply chains, which would create spillovers to the u.s economy through trade and other channels. The volatility in the financial markets, particularly if sustained, could also act to tighten credit conditions and affect the real economy. Making appropriate monetary policy in this environment requires a recognition that the economy economy often evolves in unexpected ways.

We will need to be nimble in responding to incoming data and the evolving outlook, and we will strive to avoid adding uncertainty. What is to what is already an extraordinarily challenging and uncertain moment? We are attentive to the risks of potential further upward pressure on inflation and inflation expectations. The committee is determined to take the measures necessary to restore price stability. The american economy is very strong and well positioned to handle tighter monetary policy.

To conclude, we understand that our actions affect communities, families and businesses across the country. Everything we do is in service to our public mission. We at the fed will do everything we can to achieve our maximum employment and price stability goals. Thank you.

I look forward to your question. Q. A this is the hard part here we go. Thank you.

Thank you. Let's go to gina at the new york times, hi chair pal. Thank you so much for taking our questions. I wonder if you could detail your thinking.

A little bit about how you're, considering the you know, the risks of going too fast and potentially tipping the economy into recession and how you're weighing those risks against the possibility of going too slowly allowing inflation to become embedded and kind of getting behind the curve. Good question so um, i guess i would start by saying that, in my view, the probability of a recession within the next year is not particularly elevated, and why do i say that aggregate demand is currently strong and most forecasters expect it to remain so. If you look at the labor market, also, very strong conditions are tight and payroll. Job growth is continuing at very high levels.

Household and business balance sheets are strong, and so all signs are that this is a strong economy in indeed uh one that will be able to flourish not to say withstand, but certainly flourish as well. In the face of less accommodative monetary policy, so wow uh. I guess that's how i would say i'm looking at that, of course, the objective is to achieve price stability, while also sustaining a strong labor market, and that that is our overall objective, but we do feel the economy is very strong and well positioned to withstand tighter Monetary policy good market likes that. Thank you.

Let's go to howard at reuters, yeah bouncing a little bit there chair bill. I was wondering in the um in the steps you have quite a markdown to uh gdp from gdp. Here we go, i'm wondering how much of that do you feel as a result of the fed's stiffer than expected action here uh you talk about monetary policy operating with a lag, but is this going to bite quicker than expected good question? I i don't think that's a big piece of it. Actually, i i think some of that is just uh an early assessment of the effects of uh of spillovers from uh the war in eastern europe, okay, which will hit our economy through a number of channels, highly uncertain, but uh.

You know you're you're, looking at higher oil prices, higher commodity prices, it'll be uh, so we think that will weigh on gp to some extent. So that's part of what moved uh moved the those assessments down. I don't think i mean i think. Generally monetary policy works with the lag, so some of that would also be in there, but uh remember as well.

That 2.8 percent is still very strong growth. If we think that we think that the potential growth rate of the economy is somewhere between somewhere around one and three quarters percent 2.8 is strong economic growth, it would have been one of the strongest years, in fact of the last expansion. So while it's lower than last year's 5.8 percent, it's still quite strong growth. That's so i would say it's it's quite a strong forecast, wow.

That is a wonderful defense to that concern, really good job powell, for you to go faster. If you believe rate hikes ongoing increases, doesn't really tell us whether this is going to come in bigger chunks or or evenly paced through the year. So you know the way we're the way we're thinking about this is that every meeting is a live meeting. Uh we're going to be looking at evolving conditions and uh.

If we do conclude that it would be appropriate to to move more quickly to remove accommodation, then we'll do so. I can't be perfectly specific about it, but that's certainly a possibility as we as we go through the year. Thank you. Thank you.

Let's go to rachel at the washington post. Thank you for the donation, future powell for taking our questions, i'm curious. If you can be specific on when you expect to see, inflation will start to come down, especially with the combination of rates going on. In other words, when will you stop saying we're going to wait for the data very good question and if you don't start to see that, how will you signal it? What will you be looking for and what will you be looking for over the course of the year? Questions are good today, so i guess i would say that at the um before the invasion of ukraine by russia.

So let's go back to that. I i would have said that the expectation was that inflation would peak sometime in the first quarter. Maybe the end of the first quarter of this year, okay and um, and then maybe stay at that level or a little bit lower and then start to come down. In the back half of the year so now we're you know we're getting uh we're going we're already seeing uh a little bit of short-term upward pressure in inflation due to higher oil prices, natural gas a little bit, but not so much for us.

Since we have our own natural gas supply other commodities prices, the other thing is that um you're seeing supply chain issues around shipping and around you know lots of countries and companies and people not wanting to to touch russian goods. So that's that's going to be more more tangled supply chains, so that could actually push out the relief we were expecting on supply chains. Just six. So i i guess i would say that the the expectation is still that inflation will begin to come down in the second half of the year.

But if you look at where the i read the the scp headline media and we still expect inflation inflation to be high this year lower than last year, and then we we expect, though, particularly with the effects of the war, but also the uh. The data we've seen so far this year, we expect inflation to remain high through the middle of the year, begin to come down and then come down more sharply. Next year, wow. Okay: let's go to nick at the wall street journal, nick tamaros of the wall street journal chair powell.

Over the last six months. The fed has shifted. Its policy stands quite a bit uh. Six months ago you were still buying assets, uh, most officials, weren't projecting any interest rate increases this year um and yet, despite the shift over the last six months, real rates are as negative today as they were then.

So how concerned are you that further inflation surprises will offset the effects of uh recent policy firming by leading real rates to stay at levels that do not actually provide much restraint uh to the economy? Boring so that that's one of of many ways of capturing uh? The situation, which is that we, the committee, really does understand that uh the time for uh for rate increases and for shrinking the balance sheet has come and um. I i would just say uh i would go back to the economy, is very strong and, as i mentioned, uh tremendous momentum in the labor market. We expect growth to continue as i it's clearly time to raise interest rates and begin the balance sheet. Shrinkage um and i just wanted to say that if, as i looked around the table at today's meeting, i saw a committee that's acutely aware of the need to return the economy to price stability and determined to use our tools to do exactly that.

You you couched it in terms of real rates. I i would say if you look at the the scp you've got people getting close to, or even above in many cases, their estimate of the longer run neutral rate. So i understand that doesn't do it for real rights, but if you go out a year or two many people are in their forecasts are having or having tight policy from a real, a real interest rate standpoint, so that that's something that we're we're focused on. Of course it's it's a highly uncertain environment and and uh.

You know we don't know, what's going to happen and and but we do know that we're going to deploy our tools uh uh, to to achieve our goals and that that includes the price stability goal. Let's go to victoria at politico, um, hi, chair powell, so um. Looking at the summary of economic projections, you all have inflation coming down over the course of the year to 4.3 percent um, and then you also have rates going up to what appears to still be below roughly what would be estimated to be the neutral rate. Although i know that's a little bit uncertain, so i was just wondering how much of inflation coming down.

Do you see, as actually being as a result of the fed itself, raising rates um and then also, if i could just ask uh, given that sarah bloom raskin withdrew her nomination um? What do you expect to do with the regulatory portfolio? Do you expect to assign a governor in charge of that? Okay, so sorry tell me, tell me again your first question. My first question is: how much do you expect inflation to come down as a direct result of the fed sections um, okay, so part of it? Part of inflation coming down at the very beginning is clearly to do with factors other than our policy and those would include, potentially the supply chains getting a little bit better. Certainly, base effects you're you're lapping, as you know, when you look at a 12-month trailing window, you're lapping, very high inflation in march april may june of last year, so there should be some effects from that in the 12th in the 12-month picture.