Everyone me kevin here. This morning was an absolute and complete a disaster and we we've got potentially more disasters coming up. Including the fact that 71 percent of s p. 500.

By market cap reports by july 29th. And that is the 29th of this month. Which means we got a whole lot of earnings coming up and we're probably going to get a whole lot more bad news. Because the news.

We got this morning is probably going to lead the fed to flip flop and i hate to say it this in terms of earnings season. Might not help the case. The nasdaq on the other hand has seen now 50 percent of its stocks being down 50 percent or more from their 12 month highs. Some non profitable tech biotech and payment services are down all the way up to 80 percent and the msci technology index for the world has tacked down 30.

Percent. Clearly. Investors are finally diversifying their portfolio was out of tech and out of high growth. And it's leading to pain in the markets.

But are they right to do so. When we have cp lie numbers like the ones that came out this morning. Let's talk about what happened this morning and how this could completely reset. What the federal reserve has for us in store and boy oh boy but first before we talk about what the federal reserve has in store.

We've gotta of course talk about this chart right here which has to do with the r word folks the r word is recession and we've actually got to start using the word rather than calling it recessions or word just say recession. We're probably in a recession. Don't wait until it's too late tory realize we're in a recession. Because guess what most of the pain tends to be over before we're actually technically in a recession.

That's because not only do you need to have a 2 quarters in a row of negative gdp. But you've actually got to have these economic boards the national bureau of economy blah blah blah. Determine okay we're actually in a recession and it's all in hindsight. It's a complete disaster.

The reality is markets realize and this is why everyone's talking about it. Here's a chart of the number of the word recession or number of times. The word recession is used in news articles and you can see it's absolutely skyrocketed and there's no freaking surprise. Because inflation is going nutso.

So not so. In fact that we can't even report right take a look at this chart here this chart here shows you us. Inflation coming in hotter than forecast. The hottest inflation now in the last 40 years.

This shows you inflation going all the way back to 2005 over here. You can see we have the biggest month over month gain in inflation since 2005. The highest headline in inflation read in more than 40 years folks. This is intense inflation came in so nasty this morning and at the same time pepsi.

Told. Us. They still have pricing power and frito lay. And mountain dew.

Indicated that they have pricing and power passing on about a 12 percent higher pricing in the second quarter. That the bank of canada central bank. Said. You know what we are actually now starting to face the danger of the spiral.

That is the wage hike and then the price spiral wages go up when wages go up a people end up being able to spend more money providing purchasing power to pepsi frito lay. And mountain dew and then guess what happens they raise their prices. And then prices go up and when prices go up then all of a sudden wages also have to go up because people can't afford the cost of living anymore. So what did the bank of canada.

Do today well the bank of canada decided you know what hey look we know know that the market is pricing in a 75 basis point hike. But uh yeah. We're gonna can that we're actually just gonna put on some pants and we're gonna raise rates by 100 basis points. Which translates to a full one percentage point hike something that maybe.

Jerome powell should actually take a little bit of a hint from in fact we can even show a chart now here that shows us what parts of the world have actually finally instituted a 100 basis point hike you could see those pictured here in pink of countries that have finally given us a 100 basis point hike. And you know. Which one's oddly missing over here. It's right here the united states put those pants on yeah.

It's time to raise rates appropriately and so we gotta talk talk about what this means for the federal reserve because the reality is pretty much wall street was expecting inflation to come in between. 88 to 89. Percent. Uh and they were expecting that month over month.

So this was the year over year they were expecting that month over month that we were going to be sitting at 05. Percent. Which would be an annualized rate of about six percent. Right we were expecting core to also come in about 05.

Again annualized at about six. Percent but. Unfortunately we didn't get anything close to that we got 91. Percent on headline.

Which is crazy we got the highest month over. Month read since 2005 at 13. Percent and we got core coming in at point seven. Percent which translates to 84.

Percent. And this is going to change things for the federal reserve especially because we didn't just see what joe biden told us. Which was oh well this last. Cpi report doesn't reflect that gas prices came down 40 cents.

No biden. It has not only to do with gas prices in fact it has to do with a. Whole heck of a lot of things laundry and dry cleaning services. Up 08 percent and.

102. Percent on the year education services up 17. On the year airlines down point two percent on the month of a month. Basis which is good but still up 341 percent of the year car and truck rentals just in the month.

37 that's crazy home insurance up 21. Percent. Folks. That's over a 24 annual hike for homeowners insurance dental services up two percent hair and shaving products of 12.

Percent on the month computers and peripherals. We thought these were going to get. Cheaper no what are they they're up 13 percent that's over 13 annualized inflation audio equipment up 32 percent used cars and trucks catch wood said these were going to go down up. 22.

Percent on the month. Rent folks went up. 07 for rent of primary. Residents and even ice cream was up 31.

On the month over month basis totally insane. The only thing that was down that actually seemed to be of interest was the fact that prices for shirts men's apparel were down three. Percent that's it because even paper towels went up 22. Percent on the month.

Absolutely insane so now we've got to understand what does this mean for the federal reserve well the federal reserve is going to have a very very important response to this and so what do we have now well the fed letting us know that there's a 50 off coupon code down below that now also starting later today is going to come with free trade ideas included for those of you in the stocks and psychology of money group not just trades. I make but also trade ideas. This is a new feature that we're releasing lowe's partnership archives of all of our lives stream's daily live streams. When the market is open.

We've got fundamental analysis in these and in other lectures again that lowe's partnership saves you a lot of money especially in the real estate groups boy. They're going to be opportunities for real estate. Coming up and we do fundamental analysis on real estate. As well so you get to see some deal analysis recorded lectures and i'm constantly adding new ones.

So that way you're not getting a sale course you're getting a course. That's living and breathing with markets and as we get more information we provide more information the courses. So absolutely check that out link down below before prices for the programs go up shortly. So what are markets pricing in now.

And what is the fed likely to do to us and what is something that we haven't actually talked about regarding. The fed yet well first right now. We've got markets pricing in a 100 basis point hike in july with a 33 percent chance of probability and a 33 chance of a 75 basis point hike. Potentially with another 75 basis.

A point hike in. September we're looking at either way we. Slice it probably a full 15. Percent of rate hikes between july and september bringing us up finally to the magical three percent.

Which is actually deemed to be above neutral neutral. Being roughly about two and a half percent. So we're probably going to get above neutral much faster than ever before. And this is what markets are suggesting the fed do the fed just hasn't been doing it.

So. Why do i believe the fed is finally potentially willing to just do it because there's something really important to know about the federal reserve okay folks i can't believe this but when i said it was 33 percent in the process of us just exporting the video. We got an update that the odds of a 100 basis point hike have actually moved up to 50 percent. But then as we started updating that we got another update that now the bond market is pricing this in fast.

Now. Folks. The current odds for a 100 basis point hike. A full one percent hike.

Bringing us from one and a half percent to two and a half percent. The odds of that 100 basis point hike. Happening in july july. 27th.

Are 67 ah and then we get crashed into by max who se a really fast car what kind of car. Do you have there a lambo deal. Oh my oh both you got lambos yeah. Well that's how fast inflation is running away.

That you kind of need a lambo or the fed to have a lambo to catch up. But folks look. It's obvious. The the fed and markets are realizing dude fed stop with the accommodative crap.

You are still buying bonds in may wake up and hike the federal reserve realizes that there's one thing that they can do very very quickly that the covet pandemic taught us. They can print money very quickly. They can u turn very quickly. If they need to go soft.

Because inflation falls off a cliff. And they need to u turn on us and start printing money again and start supporting the economy. They can do that overnight they could do that really really really quickly what they can't do is fight inflation by footing around and they realize that and that's why i think by the july 26th to the 27th meeting. We're finally going to get the fed that actually put some pants on we thought they might do that in the last meeting.

But they didn't so what did we end up getting well not only did we last month have a much higher inflation read than we expected. But this month. As well we get yet another higher inflation. Read than expected folks.

The fed needs to put the pants on get us to not just three. Percent but probably with these inflation reads to 35. To as high as four percent as soon as possible this does mean paying for stocks in the shorter term and paying for real estate. Which could create buying opportunities in my opinion it does at some point.

Though we do think that those inflation pressures are going to lead the federal reserve to u turn. And we know that they can do so quickly and this is something that i really think is critical that most of us forget is that the fed can you turn to our benefit. Fast. They can help us fast.

But dealing with inflation takes time really putting the pants on now ironically even though. The federal reserve has totally been missing it with putting the pants on the markets are still pricing in the fact. That oh no no we actually think inflation is going to come come down let's take a look at this chart. And then we're done then it's time to go back to vacation.

Okay because every time i go on vacation bad morning comes out and i'm sorry i apologize for and i swear. But take a look at this folks and i don't know why now. But i sound like patrick warburton. Okay.

So what do we got here this is the break even inflation rate for the five year. This is the market's expectation of inflation. It's the white line right here you can see that recently that white line has been plummeting. The orange line is the 10 year break.

Even rate of inflation and one of the things that you can do is you could run over here. And you can notice that when the break evens plummet. Usually you get cpi or the blue line that plummets after it's really kind of interesting. But take a look at that over here you could see those break even start falling inflation drops anywhere between three to five months afterwards when the break evens move up we tend to see the inflation move up three to four months after that that's what we're experiencing right now.

We had the break evens for inflation move up over here in february. And march here you go break evens peaked. What happened then inflation sits over here two to three to four months later. We've got inflation now potentially and probably peaking.

Although. The type of inflation. We have is really really broad based and this is a danger because if we have broad based inflation. What's to say.

It's actually going to come down the hope. Though is that it will and for some reason. The bond market seems to think they're much smarter. Than us.

Who are living that day to day life of going. Wow. Prices keep going up as fast as kevin raises prices on his programs. I'm building your wealth.

But hey you know what that's because we keep adding more content so you get a better product every time over time. But this chart the break evens are implying that inflation should be plummeting within the next three to to four months because you could see the break evens have started to crash within the last 30 days. And that implies that within the next three to four months inflation will come down. But between now and then the fed needs to act put the freaking pants on hike.

The rates already you can always always talk softly and nice to us in the future. But you turning back. But put the freaking pants on do your damn job show. The markets that you're going to do your job and get inflation under control hopefully.

The bond market is right and if they are you can u turn quickly great. But let's not play the game anymore of oh. Knows the fed gonna do 50 or 75. It's not working get it done and get ready to go shopping for real estate because i think the longer treasury yields stay up because inflation keeps going up real estate's going to be on sale more.