Hey everyone kevin here, so we just heard from jerome powell that we will not be raising rates and we will not be tapering at this fomc meeting. Instead, we're expecting jerome powell to potentially taper november 4th. In fact, jerome powell told us that there is a unanimous decision that has been made and that the entire committee unanimously agrees that we will start tapering uh, that we will end the taper by the middle of next year. That taper has not begun yet, but we expect that to begin november 4th, unless there is some kind of shocker to the downside, shocker to the downside would have to probably be a very bad unemployment.

Reporter jobs report jobs report comes out on october, 8th. I believe it is i'm going to have to double check that one. I believe it's october, 8th for the jobs report, because it's the second friday of october, since the first friday falls on the first. It's the 8th and then we've got cpi figures coming out on october 13th and we don't have the fed all the way until november 4th.

So those two reports are going to probably be that final kind of nail in that decision to taper november 4th. We expect the taper to complete, within about seven months by the middle of 2022, that's a faster pace than usual and initially, when we heard no taper yet, and we heard that rates would stay the same. The stock market moved up, we saw the s p, 500 and crypto move up as soon as jerome powell said that we would taper by the middle of 2022 markets pulled back, and that's because previously, we've taken about a year to taper from 120 billion in asset Purchases, what we're doing now to zero whatever was before to zero now jerome powell and the committee are talking about doing it as quickly as seven months, so that is actually a hawkish tone. That's suggesting that there's potentially more upside to inflationary risks and it's time to taper now one of the media folks asked a very astute question.

She said: hey: are you going to raise rates before you finish tapering and the reason she asked that question is because, in the summary of economic projections which came out, we actually had a little bit of a change. We had a shift right here at the bottom. You're going to see the fed funds rate - you see this 0.3 right here above that green. I just drew this 0.3 right.

Here is a sign that the federal reserve wants to have interest rates bump at least one time in 2022, and then the the median forecast is for two more bumps in 2023. But this begs the question right here: okay, jay, pow and friends: when are you going to increase rates? Are you going to do this first bump from point o to the range of 0.0 to 0.25? Are you going to bump this to 0.25 to 0.50? At the beginning of 2022 or at the end of 22., she had a very, very smart question, because when jerome powell responded, he kind of reacted quickly to that and he reacted quickly to that because he's like no, no, basically i'm summarizing he's like. Why would we do that? That would be like contradictory. You can't raise rates and taper.

At the same time, we would have to finish the taper and then raise rates and by saying this drone powell signaled to markets that we're not going to see a rate increase until the very earliest, the second half of next year. Unless, of course, things change. And that's where naturally jerome powell kind of walked that back a little bit because he got caught real nicely. So he walked that back a little bit and of course said hey unless of course things change uh.

Then then we would uh modify our actions. Now. Jerome powell talked a bit about uh, the the maximum employment test, uh and substantial further progress. He believes that almost everybody believes that we've met the substantial further progress test.

Others say we're close, but they're pretty much all consistently on the same page that yeah we're pretty much at max further progress and we expect to have that again nailed down by the november 4th meeting. That's when that decision will become official to taper. He says we are on track to rotating back down to 2 inflation. However, he does recognize that we might have to taper faster or again.

We are tapering faster compared to last time, because supply bottlenecks have been larger and longer lasting than we were expecting. Imagine that something was larger and longer lasting than you expected all right. Then jerome powell went on to say that households uh, won't really notice this two percent inflation. He believes the inflation expectations are a little bit high right now, but that they're temporary they're transitory he's kind of sticking to the transitory argument.

But he does agree that yeah look things, have kind of pumped up a little higher and longer than usual the liftoff. So when you hear the federal reserve talk about liftoff, it's important to know they're, not talking about a rocket ship they're, actually talking about lifting rates off and jerome powell does not expect to lift rates off until we we finish the taper, so no liftoff until the Taper is complete now, something else. That's really interesting is jerome. Powell says has previously said: this is a change.

Okay, jerome powell has previously said hey, you know we want to keep the essentially interest rates low. We want to keep things accommodative so that everybody can participate in the recovery, specifically black and hispanic individuals who are more likely to be in service sector jobs affected by covid and women, also more likely to be in service sector jobs affected by coven and lower rates. Would help accommodate them better? John powell has now changed this policy. Well, i wouldn't say: he's changed the policy, but he's changed his tune on this, and what he's saying now is hey.

You know what congress via fiscal policies and educational policies would be much better to help black hispanic individuals and women, and that this might not be a job of the federal reserve. That congress would be a lot more efficient at handling this. He also mentioned that we have a uh. We do not have a lot of direct exposure to the ever grand crisis.

There was somebody who called it ever grande, which i thought we were making fun of yesterday on millennial money when we were calling it ever venti. Uh but anyway, somebody actually called it evergrande uh, which is fine. I get it. I mean, there's an e at the end, okay like but anyway, so we were making coffee jokes in the chat, but anyway jerome powell says that uh.

Nobody should assume that the federal reserve can protect us from the ever grand situation, but he says it's not a major focus and he does not see a lot of uh direct exposure. I was actually surprised how few questions there were about evergrand uh we've got. Let's see here liftoff, we talked about this extensive, oh crypto, okay. Yes, lots of talk about crypto here from the fed, so uh joan powell called crypto a currency-like product uh, which is really good because the last thing people in the crypto community want is their crypto to be considered a a security uh.

Because then you get sec regulation, you get, you know more more tax implications. John powell called it currency like uh, although he wasn't directly referring to crypto as possible, he was referring to stable coins. So i'm not sure that we could fully bestow like that. That honor on on crypto yet uh.

He does, though, believe that uh central bank, digital currencies and digital currencies in general are very important. He says uh they're working on a massive report on cryptocurrencies uh. He says we also have a new settlement system being released for instant payments, instant settlements that he says, there's a quite compelling case for this uh. He does say that we probably need congress's support and we want broad support from congress and the president to get a central bank digital currency in place.

But he does see digital currencies as a quote very important innovation uh. But he does make sure to clarify that. It's important to be right and not to be fast because we are the world's reserve currency. So this is really good.

Uh there was uh, there was a uh crypto dip. I'm just gon na show you uh the ada chart here, because i do have a yolo. I'm sorry this is the hud hr. I have a yolo on hud 8 right now.

I also posted on wall street bets but uh, of course, as usual anytime, if you want to see me, buy, sell or trade uh, it's not for you to copy my trades, but if you want to see it, i post alerts in my stocks and psychology of Money group every day i buy seller trade, which uh sometimes is infrequent. Sometimes it's very frequent. It kind of just depends on what the market's doing, but anyway, i did uh i'll buy a yolo on this as uh as the minutes were coming out. We did have a period the time here, of negativity, and this negativity was because of that accelerated face of taper, and then, of course, we were all saying: jerome powell just get off the stage and stop freaking talking.

We did recover, though, when jerome powell sounded a little bit more dovish later and started applauding cryptocurrencies, okay. So folks, thank you. Thank you. So much for watching this summary check out the courses link down below the price does go up thanks to all that inflation, it's lasting longer and larger than expected, so price will be going up a friday evening so check out the programs linked down below uh folks Use that coupon code now we will see you next time.