The next 36 hours your opportunity to get first access at the series a by by just being a course member. Which is like triple quadruple value goes away because pricing will be substantially worse. If you try to buy in the future so try to get yourself into the programs of building your wealth before the end of the day of july 28th. We'll see you there's have you heard of the powell.

Curve well this powell curve could be what determines whether or not the fed ends up pushing us into a recession. Forcefully to bring down inflation or not the powell. Curve is very very important in fact the powell curve is jerome powell's answer to why we're not going to have a recession or at least that's what he said so in march which what's very interesting here is in march. Jerome powell.

Said fear not we will not have the r word. No matter whether you define it via biden's definition or how the markets actually viewer recession. Which is two coordinates of negative gdp. We won't have the r word because fear not the powell curve is steepening.

What do you mean potentially the powell curve going down my line is going up and as long as my line is going up. We won't have a recession. Yes folks literally the powell curve is drone powell's excuse that as long as the line goes up we are gucci and as long as the line goes up the fed should continue to be a little hawk and not a dove but those big boy pants on and talk dirty to us about how they're going to raise interest rates make everything more expensive constrain. Our wealth and force demand down because by forcing demand down inflation will go down.

And then we can go back to printing more money in the future. Which is what makes j pow. Happy if you saw my uh halloween video. You remember it was all about giving away money because that's what j pow.

Does anyway. He wants to go back to being happy. But right now the power curve is going up or was it well yes. It was that was march.

So what has happened to the power curve. And what even is the power curve and why is it important for you to know about it well again. It's important for you to know about it. Because it dictates how j.

Powell responds and jerome powell was right going up through march. The pout curve has been doing this in a very very dramatic fashion now i'm going to tell you what the pow curve is powell curve and then i'll talk to you about what it's been doing by showing it to you so the way you do the powell curve is you simply take the three month treasury yield. So that sounds fancy. But it's just basically if you put your money into a three month t bill.

What's the annualized yield that you're expecting from that bond in other words since it's only three months you have to multiply. It by four and then you get an annualized yield right don't worry so much about that what number is the chart at for the three month. Yield and if that is at 25. Percent great we got ourselves part one of the equation.

Then we want to look at the three month yield 18 months out and that's because people play in the futures market and go we think treasury yields are going to be at x percent in 18 months on the three month annualized of course. And if that number is three. Percent then the spread or the distance between these two numbers is 05. Percent well folks the difference between these two numbers has run up to in excess of 25.

Percent. Roughly around the time. Jerome powell. Said hey my curve is still going up.

Which says. No recession and we keep on hike hike hike. Doodling. Well.

What has the curve done since march here. You go folks. This is the powell curve. The powell curve has plummeted and could potentially be at risk of inverting within the next month.

Which generally when the powell curve inverts. As you could see what happened over here in early 2020. When the power curve inverted. We ended up having a recession.

Within 18 months thereafter. Oh and take a look at other. Times it's inverted oh right before thecom bubble. Oh and right before the 2008 recession.

So no it's not only because of a 100 year pandemic. It's because economic and bond market. Conditions have aligned in such a way that when you get an inversion of the powell curve you could potentially have one of the most reliable indicators of a recession even more reliable than that famous tend to inversion potentially because as the powell curve inverts. It can be a sign that you're even closer to a recession than we previously thought now we have not had an inversion in the power curve yet you can see here we sit around that 50 basis point spread.

However because the power curve is falling so rapidly because of expectations of the federal reserve's actions and what the federal reserve has actually been doing that is they are literally starting to walk the walk rather than just talk. The talk well now we're starting to see an inversion or the direction of a potential inversion coming in the power curve. What's great about this is that the more we get the federal reserve walking the walk the more the market say okay okay well we we trust you now we trust you now you're you're gonna do what you say you're going to do we believe you can we scale. It back a little bit.

Now okay can we just scale it back a little bit. Because here's the thing. No matter. What happens at today's fomc meeting.

The big thing is going to be what's going to happen in september. November. And december. The markets have pretty much told us that today july 27th.

We are expecting a 75 basis point hike that is going to bring us to a fed funds rate of about 225. And the odds of this is sitting at about 73 percent right now so we're pretty certain we're going to get this kind of hike. Then we get to about a 50 50 chance that we're going to get a 75 basis point hike. Again and then a 50 over in september and then in november and december.

We're probably looking at either 50s or 25s tbd that so much doesn't matter right now. What really matters is the following factors okay. This is what i want you to pay attention to i don't want you to so much get confused by waller and ballard planning for a 75 basis point hike or esther george dissenting. Last time going for a 50 basis point hike that's that's not so much really what matters right now here is the exact list for the next three months.

What you got to pay attention to when it comes to the federal reserve because remember they're often august and they don't have a meeting in august. So we're not going to be seeing jake powell talk to us for uh well. At least in the capacity of of standing in front of the fomc federal open market committee. I'm sure he'll be having plenty of wonderful interviews to talk our market to death between now and then so he won't be gone.

But he won't be in front of the fomc. But in the meantime. What is it that we're looking for from j. Pop.

Well folks. Number. One is we want his reaction to the powell curve. The reason we want his reaction to this is because if he says okay.

The market is telling us. We've done our job now. It's time to do the famous old u. Turn that is going to be a huge buy signal to markets remember markets have bottom every single time.

The federal reserve has u turned whether that was in 89 in 2003 in 2009 at the beginning of 2009 in 2018 in december. Or in march of 2020. All all of these market crashes bottomed when the fed u turned. Therefore.

If the powell. Curve is enough for powell to finally go. Okay. Yeah.

My curve is no longer going up into the moon. It's it's time to u turn. Because i want my curve to go back to the moon uh then then you know what if he recognizes that that would be deemed as bullish. So we want to see some kind of reaction to the power curve now that's going to be dressed up.

So you're gonna have to look for it because you're going to hear them talk about the difference between near term rates and futures rates. When you hear those words near term rates futures rates that is power curve talk okay nobody's gonna stand there at the fomcb and go so powell your curve looks like it's about to invert any kind of talk about the three month near term and medium term rates. That's what you're going to look forward to or even forward rates might be another way to say it okay pow curve. Pay specific attention to this very very critical today.

Number. Two we want to pay attention to jerome powell's reaction to gdp data. Well gdp data comes out tomorrow which is july 28th which is also the day the coupon code expires on the programs i'm building your wealth live streams with me every day. The market is open when i'm in the office and as much as i can when i'm traveling.

Which is very very difficult sometimes. But i plan not to be traveling much anymore after this trip here. But anyway awesome continue to add a beautiful fundamental analysis lectures whether it's in real estate or stocks. And greater discussions with the community there so make sure to check out those programs cut that coupon expires.

The same day as gdp data which is tomorrow now why do we care about j. Pal. And gdp. Data.

Well the reason. We care about j. Pal. And gdp.

Data is very simple. Because biden is trying to redefine what it means to be in a recession. He says no no a recession is only called when the national economic bureau research bureau. Whatever when these folks say it's a recession.

The problem the problem is those folks tend to take 4 to 14 months after a recession to actually tell you yeah damn. I guess we were in a recession. So the markets are like we don't care about these morons at all if we get two quarters in a row of negative gdp. We are technically in a recession.

So take your definition and shove it where the sun don't shine and we're gonna be in a recession. Stop trying to bss. Why don't you actually talk straight to us for once oh right because you're a politician. Anyway so gdp data comes out on the 28th and obviously.

Jay powell has having his meeting on the 27th. So we want to get an understanding from jay powell. Hey jay powell. Really gotta know man do you think if we get two quarters in a row of negative gdp.

We're gonna be in recession. And he's gonna be like well yeah you know the textbooks have uh traditionally told us that uh that is the definition of recession and uh that's generally what we're inclined to believe now i don't know why all of a sudden i sound like george bush. But whatever we want to know his definition of gdp uh. Because that will also impact his uh response to the power curve.

The potential inversion of the power curve next up number three. Oh god i'm coughing because this one's so full of bs. We gotta understand does powell think that we're at peak uh peak cp lie. I mean cpi data.

So uh cpi data thoroughly by the bond market is being told to have hit peak and that's because a consumer inflation. Expectations have peaked and are going down inflation expectations by the bond market have peaked and are plummeting. They're at the lowest levels that we've honestly seen in a year which is remarkable commodity prices are falling copper industrial metals like iron falling nickel falling lithium stabilizing uh wheat we've got some drama here recently because of some rockets that uh that came uh over to the ukraine after a wheat deal between russia and the ukraine. But we don't do so much talk about this the point is if peak is behind us and jerome powell.

Admits that the peak is potentially behind us. It could be very very gucci for the markets in fact uh. Let's just take a look right here okay all right uh this uh this right here is what the chart looks like you can see we are literally below. Where we were a year from now on inflation breakevens and this chart usually plummets.

Three to four months before the cp lie falls. Uh and um. Yeah. I i personally would be planning for the cp lie to be coming down uh and and i kind of am so anyway uh this this is important these are the three important things that we gotta watch for for mr.

J. Powell. Going forward whether it's at the fomc meeting or thereafter along with that coupon code folks we'll see in the next one goodbye.