Well, J-powell is back at it again, dishing out some information about recession or no recession. And when are those rate Cuts going to come? Because he certainly didn't want to imply that those would come today. But then again, nobody had the expectation that Jerome Powell was going to talk about. Oh yeah, we're gonna cut because as soon as he does that, everybody and their mommy and their grandmommy are gonna go out and borrow money again and go spend because all the pain will be over and that'll ruin the whole fight they're doing.

So of course he's got to tell you no, no, no, no, no, no, no, no talk about cutting rates yet. But he did actually establish the perfect framework for when we will know that raid cuts are coming or not. He said it. If you were listening closely, you heard it.

Let me break it down for you though. Here's exactly what he said: We have a view that inflation is going to come down not so quickly. Those are really important words, not so quickly. If that forecast is right, it would be inappropriate to cut.

Okay, now we need to distill that. What he basically said is, if inflation Teeters and lingers and inflation sticky, especially in the ex-housing services like haircuts CPAs Uber You know all that kind of stuff, right? Your personal services stuff, right? If inflation stays sticky there, then of course we can't cut yet. But we've known that. However, what is the inverse? If we see a drop in Services inflation X housing, then maybe the Market's pricing of rate Cuts could be appropriate.

but when would we know if that's appropriate? Well, he actually told us that as well and I Thought this was really interesting because he essentially guided and suggested via the following: what will happen and when the data will come. He said quote A few months of data will convince you that we've got it right. Oh, now in my opinion that was actually bullish because he basically told you, hey, look, we just need a few more months of data and then we'll know our forecast is right or it's wrong. If inflation comes down slowly, we have to keep rates higher for longer.

If inflation comes down quickly, especially on Services, which we'll know within a few months of data, then we can cut rates. That's basically what he said, which is phenomenal because guess what we have between now and the next summary of Economic Projections: Lots of data. Remember the data dates you want to write down Number one: Friday We get a jobs report. If it's anything like today's GDP report, it means no recession because jobs are still flowing in like crazy.

Today's sorry, not a GDP report. Today's ADP report ADP report came in massively strong. but what else do we have in terms of dates? Well, at the end of the day on Friday we're raising the price on the Elite Hustlers course which is now rebranded as the AI Productivity Course How to make more money and get sh9t done faster. We'll be releasing the AI segment on June 1st.

We're really excited to release that all of that AI content we're producing right now Blackboard lectures everything. It's all coming out on June 4th first, so that'll be really cool. but we're going to raise the price on Cinco de Mayo so we're doing a little pre-sale for that, so check that out May 10th CPI at 5 30 a.m and then of course June 13th, 5 30 A.m CPI And then we'll have the next Fed meeting on June 14th already. so that's in about six weeks.

we'll see Jerome Powell again. We'll be sitting here again doing the same thing, but he gave us a very clear guide. I Thought this was actually really impressive. The fact that he said the following in a row: a few months of data will convince you we've got it right that they're potentially where they need to be with rates and then do they have to stay or drop rates or in the edge case, raise rates? That's actually really good.

He was very, very clear about this. He suggested that housing remains weak. They did not talk about pausing today, but they did talk about pausing in the future. It's likely that June meeting is going to represent a pause as long as inflation continues to Trend down given that oil prices are plummeting, especially even after the OPEC plus production cuts which initially LED prices to rise, now they're falling.

As long as those oil prices keep coming down, you could actually see Services fall down with it, which is fantastic. Jerome Powell Also indicated that wage inflation sits at about four to four and a half percent right now, and you want that to be at about three percent to actually indicate two percent inflation. Now that was interesting. So you want wage inflation at three to have two percent inflation? Hadn't heard that one before, so that's a good one.

What else did we get? Uh, so the big thing obviously on Cots, you know the market went a little sad initially after that because it seemed like maybe he would tell us rate cuts are coming, but again, that would be wild. Uh, he indicated that inflation expectations were still well anchored, which I thought was surprising because there you know we started seeing inflation expectations actually pop up again a little bit on the University of Michigan and inflation expectation survey that may come maybe because of gas prices temporarily having risen so that might flip-flop back down when gas prices Trend back down. Obviously, we got the 25 BP hike we were expecting. The market is pricing in still a substantial amount of cuts.

effective terminal rate. Right now, the market is pricing at 5.08 which is actually slightly below where we are right now, which suggests we're at Peak. When it comes to the actual Uh chart of rate cuts, the market is pricing in the following: look on screen Now you'll see a chart. No, it's not another course member pitch, although that is going to be a really epic course.

Uh, you're pricing in three and a half rate cuts by January 31st, which works out to about one percent of cuts slightly around one percent of cuts starting about July, So we could still be in that pause situation for June with potentially the first cut. excuse me coming as soon as July or August. So the other thing that we really enjoyed in addition to Jerome Powell's commentary that we might be at the peak right now was the policy statement. Uh, oops, those are some of my notes.

It doesn't matter so much this right? here. This is the policy statement here, right? The policy statement had a removal of the following quote in order to attain a stance of monetary policy that is sufficiently restrictive. That line has been removed because we're already at that level of being sufficiently restrictive In the opinion of Jerome Powell Jerome Powell in fact, suggested that real rates are at about two percent. Right now, we're at five percent on rates.

One year out looking, inflation is about three percent, which means real rates are sitting at about two percent, which is he believes at or above the neutral rate plus quantitative tightening. Plus, the credit condition tightening from Banks suggests we're either not far off or probably there. we're probably at Peak. In other words, which is good.

This is around the same Peak that we had before the 2008 crash, which is a bummer because we hit that in 2006, which is not a date that we want to relate to. Uh, Now looking at this statement as well, we also removed the line here in determining the extent of future rate increases in the target range. A lot of people had heart palpitations about that last time, because uh, you know there was an S on the last statement implying we would get multiple more hikes. We did not.

We got one, and now we're expecting a pause. Uh, we believe that the FED is also now heavily focused. They said they said quote. He literally said, this is our Focus This will be important, even tighter credit conditions.

Our attentiveness here is important, including on small and mid-sized Banks So really focused on the cumulative effects of that credit tightening. Important. Obviously, there's still some more work to be done. However, there are signs that the labor inflation is starting to fall when we study this in our course member live streams by going through earnings calls or fundamental analysis.

We also agree we are not seeing a wage price spiral very important. Now, what else that's very interesting is Jerome Powell said something that he actually seemed very proud about and it had to do with his odds of recession as well as what's going on with labor. So he suggested that we have not seen before and history wouldn't tell you that it was actually possible for job openings to decline without at the same time seeing an increase in the unemployment rate. But he said, well, that's what we're seeing and that's actually good news.

So in other words, usually when job openings go down at the same time, you see the unemployment rate go up. But what's actually happening is job openings are going down into balance and we're not seeing job. uh uh, unemployment go up and we're not seeing a wage price spiral. That's actually a really good case scenario and I think that's what him.

That's what led him to say that the case for avoiding a recession is is potentially more likely than it was previously. Previously he suggested the case for avoiding a recession would be about 50 50. Uh, and now it seemed like he thought that there was a case for actually avoiding a recession. uh, that a recession might now be potentially less likely.

but you know there's still the case that we're going to have a recession. But uh, having been 50 50 previously to softening on that I don't mind that, that's actually pretty good. So I actually like this press conference I Like that he made it very clear like if I was going to explain this to a 10 year old and they said so. Is J-pal going to cut rates? He made it very clear.

he said hey man, J-pal came up to us and he basically said yo look man, we're just gonna hang tight at this level which is probably good enough, but we want to see what the next couple were Reports say because if the next couple reports come in hot then we're gonna have to do more. But these next two reports could say that hey, inflation's doing just fine and maybe then we could start talking about Cuts But until then we're gonna go ride our bike for six weeks because why speculate on it when we don't have the data yet? Instead, just wait for the fifth which is in two days for Friday uh and then wait for uh, the CPI report in a week from today and then of course the next CPI report thereafter. So overall, this was in my opinion, uh, very clear uh fed report Comparing this to the expectations we had, we, uh, we didn't really hear anything in terms of GDP growth other than potentially we have more of a likelihood to avoid a recession. That was good.

Uh, he suggested that um, you know that's some light into the soft Landing that's good. Uh, the higher for longer is pretty consistent, being patient until we actually get the data and then of of course it makes sense that there's no way he's going to, uh, dive into rape, cut talk until we actually have the data to support that because that would just undo the potential inflation actually coming down. Uh, because again, people would start spending like drunken Sailors again. Now while we were going through that report, a lot of folks were uh emailing us as you should as well at Kevin Meet Kevin.com Oh Elijah thank you so much for saying that! Elijah Here saying Kevin's courses are great I Got the real estate and stocks and psychology courses.

The real estate courses legendary and stocks course is pretty great. What are the best investments you can make to start? That's awesome man. Thanks so much! Yeah, the uh, it's important to remember that those are the investing courses right? And then the How to Make Money courses have had a few different titles. Originally was the path to wealth, then we turned it into the Elite Hustlers We're retiring those names and we're just making it a lot simpler of a title.

The title is how to make more money and get sh9t faster featuring Ai and the AI portion comes out June 1st so we're really excited about that. If you want to bundle up or you have questions, just send McKay an email Kevin Meet Kevin.com Thanks so much for watching and uh yeah I'd say look overall my opinion good report. Is the market gonna be volatile of course? who cares? The Nike Swoosh recovery in my opinion has been very consistent this year so far and I think it'll continue. What's going to happen with Open Door tomorrow or some stocks? our bill.com I Have no idea but uh, fingers crossed.

you're able to build your wealth over the next few years. Great time to start and I Can't wait to launch! Uh the House Hack non-accredited See you soon.