Kevin here the federal reserve minutes just came out and the stock market isn'tn't quite sure what to do with it. But i've got some insights for in terms of what was said and importantly folks. What was not said and some of it quite frankly is a frustrating first of all no mention not a single mention of the word recession. Don't worry.

The stock market might be pricing in a 70 to 90 chance of recession. More than 70 percent of adults in the united states might be expecting a recession in 2022. But don't worry. It has not risen to the level of the fed actually getting out of their white castle and going oh damn.

We actually might be in a recession. Yeah nope no mention of the word recession. Fortunately. Though there was also no mention of the word transitory and unfortunately.

There was no mention of the word pause in other words pausing rate hikes there were six mentions of tighter financial conditions and 90 mentions of inflation which is pretty wild. But there was something that kind of pissed me off right at the beginning of the notes. We're going to talk about those because i'm gonna pull them up and i'm gonna show you the notes right now right after i mention that folks we gotta get into the notes that's it what were you expecting i just wanted to get right into the notes. Okay.

I don't know what you were expecting after the release of higher than expected inflation data okay this is the section. I'm gonna tell you but remember remember what jay powell. Told us during the last meeting. He told us that we are expecting 75 basis point moves to be rare to our face.

He told america 75 basis point moves like this they're going to be rare. They're going to be rare. But at the same time even though j. Pal.

Is saying. They're going to be rare in the minutes of the meeting. So in other words in the meeting. They said that there was a considerable probability of 75 basis point moves at both the june and july meeting.

Considerable probability of 75 basis point hikes. Which is what the bond market's pricing. Anyway so it's not that big of a deal. But still there's a difference between considerable probability of 75 basis points.

In june and july and hey guys we're raising rates 75 basis points. But don't worry this is gonna be rare dude. This is literally like transitory all over again except now we're using rare like what is it with the english language and wanting to try to confuse us. I don't know it really bothers me.

But you know what doesn't bother. Me is that we go through fundamental analysis. Now every single day in our course. Member live streams.

And if you're not part of them. Yet you may as well join so that way you can learn how we do fundamental analysis. How we do math to get projections set how we do initial and deep dive. Fundamental analyses every single day in our course member livestream.

So if you want to learn more about stocks make sure you use that 50 off coupon code link down below join the programs the prices do go up over the time you can use the wayback machine and see oh damn kevin's not just saying that the price actually does go up hundreds of dollars over time. And we're releasing a huge batch of lectures at the end of this week. Let's keep going through the notes here continued expectations that inflation would decline notably that is market based. Expectations of inflation are that inflation was going to continue to decline notably.

Now they're not terribly wrong about this the break even rates right. Now for treasuries are pretty low uh in fact take a look at this i'm going to drag them up right. Here. This is today.

The five year and the 10 year break even rate for inflation going back you can see at the bottom. Here. We've got may here. We've got june over here.

And here we sit right here. We have taken these inflation. Break evens and basically gone straight down on both the 10 year and the five year. I hate to say it but for the people thinking.

That inflation is the big deal here it doesn't appear to be at least not according to the bond market. What appears to be more so the big deal folks is the potential that we're going to walk right into a recession and uh. But you know the fed doesn't even want to mention the uh. The r word all right let's go ahead and take a look at some of the other notes that we have here so we've got a section.

I'm just going to really show you the important ones inflation was expected to remain high in the short term. But fall back to two percent consistent with their two percent target in the long run. I really doubt this anytime soon especially since we've we're going to have a lot of uh residual winds coming in from owner's equivalent rents as mortgage rates go up more people tend to go to rent. And that could squeeze rents up in some areas.

Though rents have started coming down in some super hot areas. As less people are potentially moving uh in general. Now uh. Okay.

We've got a little bit of weakness and retail sales in may home sales starting to move down a little bit. These are all expected gdp growth appeared to be rebounding after a decline in the first quarter now i find this really interesting because if you look at the federal reserve bank of atlanta and their gdp now forecast you actually get a very very different story in their gdp now forecast. They're suggesting that we are basically in a recession. Right now.

Which is i think what a lot of us feel a lot of us as americans a lot of us is just investors or people. We are feeling the following folks this right here this is the federal reserve bank of atlantis estimate and the zero percent gdp line is right there and the fed thinks gdp is actually doing this down to somewhere around that 21 negative percent territory so a little in contrast there with the fed credit car credit remained widely available especially for those with higher credit scores this was interesting credit balances credit card balances at commercial banks rose in april at the fastest pace seen in recent decades this by the way. I wanted to show this chart. This is a chart of inflation mentions.

We are now at the highest level of inflation mentions at any of the fed. Minutes. The level of real gdp. Would still expect it to remain well above potential.

I don't know if they're just smoking something funny or if they're lying to us. I i you know i still haven't quite figured it out. But i take it with a grain of salt because we're definitely seeing spending growth decline. And that's why we're expecting earnings growth to decline at companies now this was interesting they saw an appropriate firming of monetary policy and associated tightening and financial conditions as playing a central role in helping address this imbalance in supporting the federal reserve's goals well the problem with tighter financial conditions is really we the market over the last like month.

Here. Has actually been pricing in looser financial conditions not tighter take a look at this this is the 10 year. Treasury yield. And what do we see it's gone from three and a half.

Percent which is a tight financial. Condition the 29. Percent. I mean that's a massive plummet in the 10 year treasury yield.

So kind of weird that you know i mean we have this in june. This was this meeting happened here and so in other words let's align. This okay. This meeting happened in june.

And there they're like yes. Yes. The market is doing our work for us. This is wonderful.

The market is on the same page with us and they're helping us see. They said in helping address this imbalance. They use the word helping well apparently the market's like yeah. No fu.

Fed we ain't helping you do your job anymore because you're pushing us into recession. We're done helping you the problem with this is is this declining chart right here the 10 year. Treasury yield and looser monetary or looser financial conditions is that potentially going to motivate the fed to take out the ladle and bend us over onto the table and start smirking us. It's quite possible now especially since take a look at this.

We had expectations that the jolts numbers this morning would come in at 11 million but instead we beat expectations we had 11254 million job openings that is more than expected it is a beat and so clearly the labor market is continuing to remain tight. Which kind of starts creating problems because the fed wants to see those job openings come down. And they didn't at least in the last measure so again more room for some spankage anyway this is what the federal reserve said check out the coupon code down below take advantage of it before the price goes up yet again and i know people are like kevin. Why do you always raise the price you're contributing to inflation.

Because there's so much demand baby let's go.