So the Federal Reserve just released the November meeting minutes and they actually said some important stuff in those minutes We have to cover in this video now just to explain to you what's going on here. This is the meeting in which they decided to raise interest rates again for the fourth consecutive Time by 75 basis points. Now, these minutes that we just got today don't really help us anything. As far as going back into the past and seeing what already happened, we already know that they raised interest rates by 0.75 We know this, this is just old news, but these minutes actually serve an important purpose because they allow us to look into the future by seeing what was the mindset of the Fed and where they're seeing the future headed. And that's why it's important to read those minutes and fish out the most important highlights. There's a lot of fluff in them, but also a lot of important golden nuggets. And this is exactly why I'm here. I Don't want you to read the entire thing, listen to the executive summary and get just a highlights. Let's get started right away. And as always, the bottom line comes first and every one of my videos since I know you don't always have the time to stay for the whole video. so here it is the majority of the meeting participants. as far as the minute state. I'm now saying for the first time in a while that slower pace of rate hikes could be appropriate soon. I Want you to listen very, very careful because I want you to think about what the statement actually really means. Is this the FED pivot everybody was talking about? Well, before you go all out and throw a party, hang on. This is not yet a full-on pivot, but it is slowly getting there. I Would say that this is kind of the beginning of our journey towards an actual fed pivot, but that road is going to be very creatures very long and it's actually going to take a lot of time. But here's what happened over the past two years and it's important to understand the background of these meetings because these events do not make the FED look too professional. Now, the FED overreacted to covet and ended up printing way too much money while keeping interest at zero just in 2020. The Federal Reserve printed three trillion dollars, which was literally 20 of all US dollars in circulation. And on top of that, they allowed people and companies to pretty much borrow money for free. The Hope was that people will spend this money. companies will spend this money on goods and services, and it's going to boost the economy, which is not a bad idea, but too much of a good thing is also a bad thing. You know how you love chocolate? Well, guess what if I give you a whole crate of chocolate? It's not gonna be fun. In fact, it's gonna be very unhealthy. It's exactly what happened now. Both of these policy decisions as far as low interest rates pretty much zero interest and massive flooding of money basically bombarding the economy with cash, causing prices to spike. Because what happens when you blow the economy with lots of cash, it leads to more demand, chasing the same amount of supply of goods and services as inflation was. Rising The Federal Reserve was defending its position up until the last minute possible. Basically, they wanted to keep allowing more free money to actually boost the economy, and zero percent rate was actually something that they thought was a good idea. They wanted to avoid a recession at all costs, which is kind of funny considering where we at right now. They actually didn't even take inflation that seriously. Fed Chairman Powell went on multiple TV interviews where he said inflation is transitory and there is no reason to change the monetary policy and raise interest rates. He said we're not even thinking about thinking about thinking raising interest rates for a couple of more years. this was in 2020. Guess what? Things have changed now. Obviously, this was a huge policy mistake. As we now know, inflation went all the way up from two percent to nine percent. That happened basically in June 2022 and the FED had to reverse course. I mean they caused this problem by flooding the market with cheap money. They then ignored it completely hoping it would just go away. and doing so made them look like idiots like complete fools. I'm not gonna lie. I mean I'm gonna call the space the Spade right? The result was a very aggressive policy change, partially designed to kill inflation, but also partially designed to restore the Federal Reserve's image as somebody who knows what the hell they're doing. now. the FED raised the interest rates as I mentioned the beginning of this video. 75 basis points four times in a row. Pretty much unprecedented stuff causing the stock market to pull back. I Mean if the stock market is anticipating a major recession, this is exactly what's going to happen. now. raising interest rates means more expensive money means less economic activity means a high likelihood of a recession. And for the first time since this whole thing started, the Federal Reserve and the minutes actually set the r Ward recession. they said that they fear that this policy is going to cause a recession. It's a very, very important thing. Combine that with them saying hey, we need to slow down the pace of this aggressive rate hikes, We have something very, very interesting. We can probably pinpoint where this thing is going to stop because we heard James Bullard one of the FED Governors out of St Louis actually talking about the seven percent. Some said even higher and now we understand that ain't happening. At least not wishful thinking wise. The FED based on these meetings probably will do a 50 basis points. Next, that's almost a guarantee right now. if they're talking about slowing down. they did four consecutive 75 basis points. Them saying in November that they need to slow down pretty much solidifies to the point where it's 99. We're gonna see a 50 basis points rate hike next time. Which means anything above that is going to send the stock market down. Anything below that, Let's say 0.25 it's going to send the stock market up and 0.5 is going to be absolutely normal. That's just something to remember as far as how the market is going to react to the next hike. Now, what does it actually mean as far as how far this is going to go? If we know right now, we're just below four percent interest rate and the FED starts talking about the Slowdown. That means that if the next one is going to be half a percent, the next one probably going to be 0.25 Another, maybe 0.25 percent. and that's where it probably ends. It doesn't seem like based on these minutes, this is going to go about five and a half percent. So we kind of have the ceiling of where this thing is headed. Which is also kind of funny because we can't go any higher. I Made multiple videos explaining why the Federal Reserve is not able to raise interest rates to the level Paul Volcker did back in the day because of a massive national debt that we have to pay interest on and we just can't afford these crazy rates that they used to have in the 80s because we're literally paying hundreds of billion dollars per year for each percentage. Point That's what happens when you have 30 trillion dollars of debt. It costs a lot of money to maintain in service, and raising rates in this environment is literally impossible. So the FED is basically signaling to you, hey, this is as far as we're going to take this. Now, the big question is, and here's where the important part is how fast this pivot happens because I always said hey, if you want to find the bottom of the stock market, which is something everybody's obsessing with, you have to look at the Fed And I always said it's going to take time. The FED pivot usually takes about a year to a year and a half to actually go into full effect As far as how the stock market reacts. Now, obviously, when there's going to be an announcement, there's going to be a spike, there's going to be a knee-jerk reaction. But as far as when the stock markets are going to go back up and basically go to the level before the aggressive policy, probably a whole year, year and a half from the pivot point, and we're not even yet at the pivot point, we now have to go through raising more rates, doing it slowly, slowing down, and then finally possibly starting to reduce rates, just a little bit from this point where we at right now until this happens, that actual pivot probably another at minimum six months and from that point on until the market fully recovers probably another year. So to all of you who are impatient right now basically saying oh my, God oh my God I have to buy backhand, the stock market is going to go crazy. Maybe it will go crazy for a day or two. Maybe it will go crazy for a week or two. Maybe it will have a crazy Bull Run for a whole month. But as far as the trend, the market is going to take some time to digest this, and the FED pivot when actually comes is going to take some time to reflect in the stock market. But this is definitely a good starting point to start thinking about your re-entering strategy. Given the fact that the FED is actually admitting hey, we're headed into recession, we can't do that. so we're going to slow things down. So now we know the indication is there. This is not yet the pivot, but this is a good starting point for you to start strategizing. Now here's the most important part. Whether the FED actually pivots or not is not the big question here. The bigger question is how bad inflation is going to be. because if the FED pivots and inflation is going to be worse than they think it is, then they literally have nothing left to do. And inflation is going to win Because once you pivot once, it's very, very hard to go back and redo this whole process from the beginning. Muhammad Alien was talking about it multiple times. It's like taking antibiotics feeling better and after three days stopping it and then you know that the disease is going to come back stronger than ever and actually going to be a bigger problem. And now it's immune to antibiotics now. I Don't know if we're three, four days. Whatever. That's the big question. Is this going to be enough to actually stop inflation? Because what the FED thinks about inflation is one thing. What inflation is really going to do is a whole different thing. So for this plan to work for the FED, they need some help. They need some help. They need OPEC to play ball with the US and keep actual prices of energy down. They need Russia and Ukraine to work things out and slow hostilities down to a halt. So the whole Commodities Market kind of relaxes and also we need some China cooperation. China needs to slow down with their whole zero covet policy reopen, start producing Supply Chains need to open up a lot of moving parts that have nothing to do with the FED have to fall into place for the Fed's policy to actually work out. So I'm saying here, the FED is taking a gamble that all of these things, or at least most of these things will align. But let me tell you straight up, if none of these circumstances changes and the FED still pivots Yes, it's going to be a very interesting rally, but it's going to be a short-lived celebration because the price will pay will be quite huge. So I suggest that you keep watching the FED but also keep watching the macro stuff around the world to see if the shoe fits. Kind of my two cents about it. Let me know if you agree if you disagree. If any questions comment below, happy to hear your questions, see you next video.