The coupon for the programs on building your wealth has the largest price increase ever coming may 16th. So make sure you use the coupon code back to the moon link down below before that date. Hey everyone kevin here. Let's talk about the fed.

First of all, could jerome powell get more hawkish, then we're going to talk about, what's priced in what the fed has said so far forth what the fed is likely to say tomorrow and let's go and of course, if any of this stresses you out get yourself Life insurance in as little as five minutes. Just by going to med kevin.com life, it's that simple, medcamo.com life app will pay. Android pay boom, get life insurance, it's the same one that lauren and i have we've been apple, paying ever since the pandemic. All right here we go, will jerome powell get more hawkish? Well, expectations are, yes, he's, probably going to get more hawkish uh now than than later.

In fact, we kind of expect that now there's a real opportunity that jerome powell could go dark on us too much. So that he who used to be a dove, could end up becoming the hawk. That says: no! No, no, we're going to stay ahead and get ahead of inflation, which they're nowhere near ahead of inflation. Right now, which will give rise to a lot of fear and uncertainty regarding potentially being volcker now i don't actually think j-pal is going to vulca us.

Vulcaring would be like raising rates up to like four to eight percent, to try to actually fight inflation right now. We're not even at neutral right neutral is two to two and a half percent, we're at literally a quarter of a percent right now we're going to go up to like 0.75 big freaking deal, but his tone could end up being hawkish. Tomorrow, though, i've hoped that it's potentially the worst likelihood of him being hawkish compared to future meetings and the rest of my explanation will explain why. So let's talk about what's priced in well right now, 50 basis, point hike, a half percent basis point now or half percent hike is priced in for may.

That meeting is tomorrow. May 4th. I will be a live streaming at that meeting as usual. Now i do expect to be live streaming, that meeting at a different channel at meet kevin live.

That's right! I might be moving all of my live streams to a different channel and then posting sort of some updates uh to this channel or sort of more uh. Put together, videos on this channel or clips from those lives on the appropriate other channels i have so one of the first links that you're gon na see down below is actually the link to that other channel. Don't feel weird about the fact that there are no videos or thumbnails or anything yeah. That's because we're just gon na go live with the fed meeting, probably tomorrow, so stay tuned.

For that do check that out, link down below, we will be live streaming at a.m. Pacific time for the fed meeting, we might do market open on that channel and we will also be live streaming at 11 30 when jerome powell and he's usually very punctual goes live to answer questions that q a is going to be very, very critical, so 50 Basis point for uh may er made my fourth tomorrow. May the fourth be with us: uh has 100 certainty based on market expectations and remember. The federal reserve generally likes to do roughly what the market is expecting now that doesn't mean that the fed won't bleed us out, like they kind of have been the last four months.

They will do that to reduce the wealth effect and kind of try to constrain lending and spending uh, which is a part of kind of like restricting an economy right. So the stock market has sort of been a byproduct of the federal reserve's actions. This is pretty obvious and clear, but they don't want to shock us to the point where they freeze, lending or institutions from functioning, because that's how you get things like the 2008 recession. So the meeting thereafter is the june 14th to 15th meeting and we'll get a new summary of economic projections in that meeting as well.

We will not have a new scp summary of economic projections during the may 4th meeting. That's actually kind of good, because in march the last time we got the scp we kind of had this like sudden collapse and heart attack in the stock market. When the fed's gdp estimate came in at 2.9 percent, which was under the 3.5, we expected since uh we've had this negative. You know, especially since we've had this negative q1 of gdp so like.

If we get an scp in june, we're probably going to look and go. Oh, my gosh, like growth, is maybe only one and a half percent projected by the fed right that would be kind of a two-folded problem, one it's like! Oh, my gosh. There is a real risk that the fed drives us into a recession and that we don't have a soft landing, and so that sep is going to be quite interesting, but again we won't get that in may so no set next economic projections will be in june. However, what we will get will probably be some form of insights into the federal reserve's path about continuing either doing 50 basis point hikes or going with 25 basis.

Point hikes hereafter at this point again: markets are expecting a 100 chance at a 50 basis, point hike tomorrow and then now there's a range for june. There's a four to forty percent chance, depending on which sort of expectation measure you're. Looking at of a 75 basis. Point hike in june that pretty much means another second 50 basis.

Point hike is already priced in for june and then we'll be at 75 as sort of like the upside risk for june on top of getting an scp in june. So but you know again, hopefully uh, you know some cpi numbers start coming in soft and we actually get a softer fed in june, so we'll see as the data comes in. But let's stick to a little bit more of what we know. So we know that the fed is and they've given us this in their last minutes that they're expecting to start phasing off the balance sheet by running off about 35 billion dollars.

First 20 trillion dollars of treasuries 15 of mbs mortgage-backed securities uh and then eventually increase this to 60 billion dollars of u.s trash and a 35 billion dollars of mortgage-backed securities. In about three months now, uh we'll talk a little bit more about how i think the balance sheet is going to uh sort of be impacting markets here. But it's important really to see that if markets right now are pricing in 50, 50 or 75 and then 25 22 25, basically for the rest of the year. They're doing that, because the federal reserve and jp have told us, we will be at two and a half percent by the end of the year.

Now getting to two and a half percent by the end of the year can be done in an equal path like in 2004, which jerome powell first said it's gon na, be like oh four, you know 17 25 basis point hikes or it could be kind of, Like 1994, where they have larger hikes up front and then they kind of taper and have smaller hikes towards the end of the year right now, the fed is telling us that's exactly what they plan to do. 50 50 would get us and then 25 basis, point hikes. The rest of the year would get us to exactly two and a half percent. So that's pretty much the generic expectation.

Now it's possible that if they do 75 that they end up doing a zero hike at the end of the year uh, which could end end up being like one of those really positive u-turns. That we'd, like looking for. We like the fed going from hawkish to dovish, that's really good for markets when the fed goes more hawkish, it's usually really bad for markets. So again, initially the fed said they're going to go 25 steady, yeti now, they're saying never mind we're going to front end.

It we're going to go 50, maybe 50 or 75, and then go 25s, but you know the fed not only flip-flopped on that, but there's also the potential that we're gon na get some insights on their flip-flop. Regarding the war see initially in february at the congressional testimony, jerome powell told us that the fed thought war was a game changer, that war would slow spending and potentially, even though it would bring up. Inflation for food and energy in the short term might actually bring down spending, because people are fearful that now we're we have a war going on. However, the exact opposite is happening, a sign that could actually reiterate jerome powell becoming more hawkish, which is just not so good, and so, if you're kind of catching my drift so far like drone power's, probably going to be a little bit more on the hawker side.

Tomorrow and it's even though i'm really optimistic we're going to get some green like we did in march, i don't know i i'm less certain than i was in march, like in in march, i was like oh 80, like we're going green if we get 25 bp. Now, i'm probably more like 50 50. and the reason for that is a the fed flipped twice on us first saying 2004 now going 1994 and then saying war is a game changer, but oh wait! It's not which that's! What earnings reports are telling us. So, in fairness, they're kind of just adjusting to what the market is doing, but it's still a flip-flop so now data.

What about the data? Well, inflation expectations are steady, however, they're likely steady in one part, the part of consumers and, in the second part, the part of markets, both things we can measure by consumer sentiment surveys and, of course, the five-year, break-evens and bond break events. We can measure inflation expectations. Those are steady and down in part, because the fed is talking really harsh talk, but also because they're expected to walk the walk. So for those of us who are wondering like kevin, isn't there a chance that the fed goes for a 25 basis? Point hike tomorrow highly doubt it highly highly highly doubt it.

The market is pricing at 50. Bp, the fed now needs to walk the walk. They need to put their big boy pants on and raise the freaking rates already we're still accommodating markets. Remember as long as we're under two percent we're still accommodating markets, we're still stimulating.

Why are we still stimulating? You know, but this is originally. Why? Also in january, i thought that the fed was just gon na hike us to two percent in one meeting like okay. Oh, that would have been aggressive yeah that would have had that would have created a real shock to the heart and the markets. But anyway, uh tomorrow, we're likely to hear the federal reserve is uh vindicated in raising rates and they're going to give us the following facts.

Again: they're going to tell us that we're still accommodating markets, we've got to get to neutral number. Two. It's going to take. Probably 18 months for the federal reserve's balance sheet reduction to actually hit the markets.

That's because we've got like 1.6 trillion dollars of excess liquidity lying around in the reverse repo market, with banks, which basically means even though they're running off the balance sheet. There's still a lot of money slushing around the system, especially banks, number three jobs. Data is on fire with jobs. Opening reports coming in hotter than expected, 11.5 million job openings versus 11.2 expected again it's going to vindicate the fed going, let's go 50 and and lead to some hawkish talk from the fed earnings are coming in way stronger than expected, which means more of a hawkish Tilt from jerome powell, because oh no war is actually not slowing down spending.

If anything, people are spending more in travel, i mean look at airbnbs be today the advertising sectors are beating, the airline sectors are beating the uh, you know, restaurant sectors are beating and people are still spending money on consumer goods a little less so online goods and A little less so durables, but they're still spending and less on used cars number five. The fed is also likely to brush off the q1 negative gdp print. Some folks think this is going to lead jerome powell to go dovish. I don't think so, because the q1 gdp negative prim was created in part because of omicron, i remember january.

In fact, i put it on my instagram story, i'm like what the hell is this like a recession or what's going on like because i went to restaurants and i'm like there's nobody, there, everybody's just homesick with omicron and also in part, caused by supply chain issues. Since gdp did not miss on the consumer end, it actually did very well on the consumer end, but instead missed due to a widening trade deficit and lack of inventory, rebuilding due to supply chain issues, so in other words, people still spending, but we're not actually able To spend on certain things like inventory or or as much trade, because we have too many supply issues in other parts of the world. In other words, another reason why j-pal is likely to go a little bit more hawkish tomorrow, number six uh. It's also likely that jerome powell, even though forecasted inflation expectations, are we're going to have a weak inflation report in uh in may for april, with just a 0.2 percent month-over-month gain or 0.4 percent core, which implies a drop in energy and food prices.

From march. A peak the data will still likely reiterate, jerome powell being a hawk for now, because hey we're not getting the data for another week after the federal reserve meeting and jerome powell has told us we're going to act first and wait for the new data. Second, so they're being pretty damn clear with us that we're probably going to expect uh hawk powell tomorrow, however, i think we're we might end up seeing the last of not the mohican but of harsh powell. If we get positive data by may 11 and before the june 15 meeting, when we get the may cpi data, it could mean that we could end up getting a little bit of a dovish fed in june.

But i don't see a lot of reasons for the fed to be dovish tomorrow now, even though i'm optimistic that jerome powell will see some reasons for hope, he told us he's not going to act on hope, so i'm actually less optimistic for green after powell tomorrow. But i will tell you most people whether it's good news or bad news, just don't invest in the stock market before catalyst events. So if there's any good news and, in my opinion, a reason for the market to actually run off, these lows is because once catalyst events occur, like the fomc meeting, guess what usually happens, we usually end up going all right. Well, we got the news all right.

We had a little bit of a hockey powell, all right, let's go back into the stock market like that's just it's just very common, so like i'm long, the market uh, i'm optimistic that we're essentially near a bottom, but i'm not expecting powell to be very nice Tomorrow, i expect that more so in june, and certainly towards the end of the year, so do keep in mind as well that if you're trading during the fed meetings, stocks usually drop okay anyway, thanks so much for watching. If you like, my perspectives, learn everything that i know about investing in real estate stocks, property management, making youtube videos and being a real estate agent via the programs link down below on building your wealth and that expiring, coupon code march or may 16th thanks. So much bye.