Hey, everyone meet Kevin here today. We're going to go through the Uh release of the Federal Reserve minutes. I'm also getting this uh, a little Studio problem fix, but it won't uh, interfere with us going through these notes. So here we go. Uh, remember, we want color and detail into what's going on with the Federal Reserve and potentially lags. Uh, okay, here we go. They're starting to come in, so most officials backed a slowing pace of rate hike. Soon, various Fed officials assault rates peaking at a higher level than what they had previously announced. Remember previously, they projected 4.6 and now, uh, it looks like almost all of them are are in unison that they're looking at potentially, uh, higher rates. They're also talking about Market resilience in light of what happened with Uh with the United Kingdom which is actually quite interesting that they would talk about that because it kind of suggests that the market is resilient to also potentially more hikes. Uh, which is not exactly what we want to hear, right? But uh, it's true. the market is pretty dang resilient right now. Here we go. Boom, Okay, fixed it. Uh, so uh, we're gonna go through these. uh together. I Got them up here. Most interesting nugget from the meeting so far. We've got uh, various official assault rates speaking in there. Okay, that's fine. we're gonna go through the notes together. We'll do a summary towards the end. As usual. uh, let's see what we've got here. So first, I Want to see I'm going to just do a fine for lag. Okay, five searches, five search results for lag. Here's the first one. Several participants observed that because of the difficulties in isolating the effects of monetary policy, changes in economic structure, or trans increasing transparency over time regarding monetary policy decisions, the historical record did not provide definitive evidence on the length of lags. This is something that Jerome Powell has been lamenting he's been talking about. Hey, you know it used to be that we would have 18 month lags. Now it seems like we're sitting at uh, maybe only. uh, or having fewer lags. So a lot of uncertainty see in those lags. It's actually five four results, not five. It would take time to for the participants. Noted that with regard to both real economic activity and inflation, it would take time for the full effects of monetary restraint to be realized. And these lags complicated an assessment of the effects of monetary policy. Remember in the statement last time they added this section here: cumulative tightening of monetary policy. The lags with which monetary policy affects economic activity and inflation all need to be considered. Things that could lag are joblessness and unemployment for example, companies starting to reduce investment spending uh, renewing contracts at potentially lower terms Bloomberg Right now reporting to contrast a bit, the minutes showed that most facts slowing the pace of hikes. It's safe to assume that most means more than very Yeah, Okay, well uh. let's see trying to see if uh or seeing anything wild here right now. it looks like uh, treasury is flattening a little bit. Okay, that's fine. let's get some more on Lags. Members agreed that in determining the pace of future increases in the target range, we would take into account here's that same phrase: the cumulative tightening of Monetary Policy. This is almost an exact copy and paste of what I just read. In fact, I'm pretty sure I am it is because that's what they added. uh, the lags. There's that copy and paste again of the statement. Okay, fine, let's see if we have the word recession mentioned in here where the word recessions actually mentioned. Once the staff therefore continue to judge that the risks to Baseline projections for real activity were skewed to the downside and viewed that the possibility would the possibility that the economy would enter a recession sometime over the next year as almost likely as the Baseline Oh wow, that's actually a big change right here. Really, really big change. This is the first time I've actually seen the FED who's always been talking about oh, you know we're not. We're not going into a recession. We don't have a recession in our forecast. Look at this. This is the first time the FED has said we view the odds of going into a recession at just as likely as our Baseline projection. That's really big. That's a huge change right there. That's wow. that's that's actually bullish for the stock stock market because the the Feds finally realizing they're causing a recession. Although I suspect that was their intention from the get-go they just didn't want to politically say it. That's a huge change right there. Okay, so only one mention of recession. we have not. We have never seen that all year. From the FED it's always been yeah. I don't know. Uh, but Jerome Powell did say it's getting less likely we're gonna have a soft Landing big, big, big shift right there. Okay, Uh, so let's see inflation Commentary: Nine matches for inflation. Well, nine pages. Okay, so probably every page uh, data received over the period higher than expected core inflation? That's fine. Remember this uh, Fomc report actually came before the last soft inflation read so I don't really care so much about that right now. Let's see here. in response to school authorities in Europe and Japan That's fine. Okay, remember the FED does not want to see Equity prices rebounding up. Uh, and so that's that's what they talk about here a little bit. seeing Equity prices rebound up. At least not until inflation goes down, right? That's really important. Synchronous declines in inflation inflation problems. Okay, inflation remaining stubbornly High Viewed the risk to inflation projection a skewed to the upside for real activity: sluggish growth in private domestic spending, and a deteriorating Global Outlook tighter Financial Conditions are all Salient downside risk to the projection for real activity, the possible persistent reduction in inflation could require greater than assumed tightening. Could it could but remember that lower CPI report came out after this report right here. Uh, we got some commentary on Ukraine Supply and Demand imbalances The war. That's fine, with inflation remaining far too high, showing few signs of moderating. few signs of moderating again. That changed after CPI and PC uh or Ppis. Participants agreed that inflation was unacceptably high. Yes, that's true, but what is not unacceptably high are the amazing prices on the programs on building your wealth 60 off coupon code expiring this Friday it's Black Friday folks biggest sale of the Year biggest coupon code we've ever had. Uh, remember, I will be ringing the bell to the New York Stock Exchange on December 9th. If you're a course member, you could fill out a form and 125 of you are going to get a raffled opportunity to come totally for free to the floor of the stock exchange. Can be super cool. Participants Participants agreed that near-term inflation pressures were high, but some noted that lower commodity prices or or the expected reduced pressure on Goods prices due to an easing of Supply constraints should contribute to lower inflation in the medium term. Maybe one of the things to remember is that companies don't necessarily have to lower their prices. Right when we look at what Dell is saying, they're not actually talking about lowering their prices, they're talking about increasing their margins, taking more profit. Worth noting. Uh, okay. let's see. participants were marked. Overall measures of medium longer term inflation expectations from surveys appeared to have remained well anchored. Uh, ish ish. Uh yeah. yeah. A couple participants observed that longer term inflation expectations were stable, even as measures of near-term inflation expectations responded to realized inflation in line with historical patterns. You're right. So what they're basically saying is here: when you see, uh, inflation reports come in hot, then uh, inflation expectations can actually go up like there's a little bit of a skew there. Okay, uh, okay. uh. full effects monetary posters, right? That's fine. Okay, let's get a little bit more here. I'm just also peeking at Bloomberg Bloomberg's still just picking up the story about uh, uh, the cumulative lags. That's not the big deal, folks. If you're just now joining the big deal, right here, is this? Uh, the staff therefore continue to judge that the risks to the Baseline projection for real activity were skewed to the downside and viewed the possibility the economy would enter a recession. Uh, sometime over the next year is almost as likely as a Baseline. Uh, Okay, so it's basically saying recession just as likely as not. Uh, uh yeah. There we go. Here we go. Okay, let's keep going. Okay, so let's see here. Oh, there was nothing there. Okay, here we go. Russia's war against Ukraine Tremendous human and economic hardship. Maximum employment. still A Max Maximum employment stable prices. Those are the two goals that's the. Mandate That's fine. We know that anything about mortgage-backed Securities reinvest in a mortgage-backed Securities the amount of principal payments the Feds Holdings the x that exceeds the cap of 35. That's fine. MBS We see here. any talk about selling MBS Mortgage-backed Security spread of MBS on treasuries widened, reflecting the sensitivity of these spreads to increase volatility. That's fine. Uh, because that's those spreads have tightened. This basically has to do with mortgage rates, and those mortgage rate spreads have tightened a little bit already. Uh, they were spreading earlier, but that's already old news, so that's not a big deal. No commentary here on them potentially dumping mortgage-backed securities. Okay, Uh, so let's see here. Uh, let's see is the word. Pause here. How about slow? Okay, here we go. Slow. Nonetheless, contacts were increasingly focused. This is this is context. so this is the survey people, not the FED Focused on the question. The question of whether the committee might. uh, slow. Uh people. A pencil stopped working. Come on. all right. I'll just go. No pencil. Then I'll go. That's it. We'll use the finger. Uh oh okay. nothing's working right now. Fine. whatever that works. there. we go. Okay, working again. All right. That was annoying. slow. but this again, it doesn't matter so much what the comments are. We want the staff's comments. Uh, like not the other surveyed people, we know people want to know if the Fed's gonna slow down. Hmm, okay. slower than the pace we had seen in recent months for unemployment. That's an interesting comment. Nominal wage growth continued to be rapid. average hourly earnings Rose five percent over the 12 months ending in September. However, the three month changes in ECI employment cost index were notably lower than the average pace seen over the first half of the year. That's bullish. So what I'm going to do is I'm just going to start putting like positive or negatives, right? That's that's definitely a positive. In response to how inflation central banks further tightened around the world, that's fine. The rise in borrowing costs appear to have slowed the volume of financing in many credit markets, not in credit cards. Oh my gosh. And if we did this in the course member live stream this morning, we looked at a trends for a firm. Uh, the areas that are really blowing up for a firm. Are I mean somewhat unsurprisingly, the poorer areas. If you go, look at uh, this the south of the United States Uh, Tennessee Alabama the Carolinas They're the ones that are actually seeing a higher, uh, a share of people searching for a firm and signing up for a firm potentially. which is very interesting because that aligns with lower median incomes. Credit quality remains sound. Overall, that's true. We've seen that pretty consistently. No no craziness on defaults or foreclosures. Expected issue with corporate bonds although quite strong in early September slowed significantly in late September October It's getting harder to raise institutional money. We have noticed this as well with uh, you know, the Um with House Hack? uh, it's it's very difficult to raise money near the bottom of the market, right? Things got really bad in September and October We're still able to raise over 22 million. Uh, no. I'm sorry. over 27 million dollars now. which is great. Uh, so we're We're in a pretty great position. but um, and we expect that to blow up. Uh, even more so, especially when we launch our reggae. But we would love the market to go up. We would love there to be a sustained rally in the stock market so people can diversify into real estate and Househack.com Read the: PPM This isn't a solicitation, right? Uh, but anyway. the uh, the problem is it's it's very difficult to raise money in a tight environment like this. And so again, we're very grateful that we are even able to. uh, anybody can raise money like, uh, go to Sam Bankman Freight He can raise money in the the Boom Times 2019 2020-21 and that guy still assessment. everybody got duped even Sequoia Sequoia was talking about how they reviewed their financial statements for FTX and they believed them. You know, we didn't even have access to that kind of stuff. It's crazy. So let's see here. contributing to slow Down Slow Down slowing participants common labor market having rain strong to date. even alongside the slowing of economic activity, you know I was just also going through Best Buy in their earnings call and it's very interesting how they talk about being more competitive and price competitive. How they're noticing is slowing obviously in the economy as well. I mean everybody's noticing a slowing in moderation I Mean this is just not a surprise. This is what I do Okay I sit here and I read PDFs all day long. Several participants remarked that rent increases on new leases had been slowing. Good, Good Good. Yes, this is what we want. We want the FED to be aware of this, but participants also noted it would take some time for that development to show up in that Pce. That's bullish right here. That's bullish. This is the Fed saying hey, hey, look, we know what's going to take time. We know it's going to take time, folks. we're trying to give you the heads up. That's bullish. I Like that, That's bullish. Uh, you know this. This is uh I would say this is sort of moderate where they they talk about like hey, we don't know uh, the effect uh or or of what kind of lags we have Global headwinds including the slowdown in China Russia Ukraine Fine, Remember, we're kind of bouncing around here looking for the most important parts. Uh, let's see Uh leaning towards a 50 basis point hike in December following four straight 75 basis point hikes. As a substantial majority of officials judge that the slowing pieces of Uh increases would soon be appropriate, let me see this substantial majority. Here we go. All right. Yep, here it is. A number of participants observed that a monetary policy approach stands was sufficiently restrictive to achieve the committee's goals. it would become appropriate to slow the pace of increases in the target range for the Federal funds rate. In addition, a substantial majority of participants judge that a slowing in the pace of increases would soon be appropriate. A slower Pace in these circumstances would better allow the committee to assess progress towards its goals of Maximum Employment and Price stability. The uncertain lags and magnitudes associated with the effects of monetary policy action on the economy and inflation were among the reasons cited as to why such an assessment was important. Well, okay, yeah. so basically, look, we probably need to slow down because we don't know. So in English we probably need to slow down because we don't know what could happen. Ah, Interesting. Okay, next. so several officials was concerned that a continued rapid pace of tightening would risk Financial instability. That's probably why they were debating the United Kingdom because the United Kingdom had I mean they had to remember they had to the FED had to bail out markets. One thing to keep in mind: okay, could reduce the risk of instability in the slowing piece of increase, could reduce the risk of instability in the financial system. Okay, okay, let's get the full context of that. Oh, it's right here. A few participants commenting that the slowing pace of increases uh could reduce the risk of instability in the financial system. A few participants noted that before slowing the pace of policy rate increases, it could be advantageous to wait until the stance of policy was more clearly in restrictive territory and there were more concrete signs that inflation pressures were receding significantly. Well, we kind of got that in the last report. So honestly, I mean to me, these minutes are screaming uh, 50 basis points. This should be pretty obvious right now. Let's see here: I Want to let's get a projection and I'm also going to get the Uh Fed term. All right here we go. Okay, so earlier, we were at a 5.24 terminal rate for the FED it's Fallen that's a bullish sign. Okay, so after minutes after minutes, terminal rate projections down from 5.24 to 5.15 Okay, let's make that little note here and projections for what rates could go to should be down foreign. Oh, wait a second here. 25 to 50? 50. Fomc I'm trying to understand these projections here really quick because they're They're just updating as they're happening right now. Um, okay. well remember we're right now at a range of 3.75 to 4 and I'll show you this: 3.75 to 4 is where we sit right now. And these are the current projections here. That's a 50 basis point hike. 71 Probability I'm a little surprised that the current versus previous product probability actually went down from yesterday. I Don't think this is updated yet because this this number should be going up after these minutes. So 71 chance of the of a 50 BP that's so I I Expect that'll change. give I'll give that an hour or so and I'll come back to it because that it doesn't make sense. Okay, Uh, UK Bond market treasuries remained orderly during that disaster would not affect the stance of monetary. Okay, orderly. Let's look at this orderly. Here we go: Increase: volatility appeared to contribute to a decline in measures of Market liquidity and core fixed income markets, in particular around the period associated with UK volatility. But Market functioned orderly. Okay, that's fine, just Financial Stability treasuries functioned orderly right because the UK's guilts did not. Okay. Hmm. uh. I'm surprised they still have not mentioned this on any of the sources that I'm looking at. Nobody's actually talking about the Fed and that always makes me nervous when nobody else realizes it because I'm like am I reading it wrong then is sometimes what I think but I don't think I am but I so far I've not seen anybody mention this paragraph and I think this is the most important paragraph right here. This is a huge change. So this is Page Six of the Fomc nodes and it's right here folks. it's this section. The staff therefore continue to judge that risks to the Baseline projection for real activity were skewed to the downside and viewed that the possibility of the economy would enter a recession sometime over the next year as almost as likely as the Baseline. In other words, they view it right now. Uh, I'm going to write this in English in English it's we. We think uh, it's just as likely for us to have a recession as our Baseline outcome as not well as yeah, yeah as as our Baseline outcome. So Baseline outcome is Baseline outcome no recession but below Trend There that adds some clarity. Uh, below Baseline negative trend. There we go. So here's English I think I think this should add a little bit more Simplicity to that in English We think it's just as likely for us to have a recession uh, which would be below the Baseline estimate and negative uh GDP I should say negative GDP rather than Trend right? Uh, as our Baseline which would be positive GDP and no recession but below Trend growth that that should add a little bit of clarity. Okay, and how is the the market actually seems relatively positive on this? We're certainly up more than we're down, so you can see that right here. The the minutes just came out here and you can see that initial volatility that almost looks like bar coding and then you, uh, you sneak up over here, huh? Okay, very interesting. So hmm. okay, those are surveyed comments and we're going to do a review here in just about a minute because I think I've gone through most of this. but I I Want to make sure of that? So we're going to do a review in just one moment. Let's see here more uncertainty. okay with regard. Okay, many participants timing, timing, timing, timing of the effects. Now, uh, current circumstances. See if I can find this current circumstances. Here we go. Okay, this is a another section that just got highlighted with regard to current conditions. Many participants remarked that even though the tightening of monetary policy had clearly influenced Financial conditions and had had no notable effects in some interest rate sensitive sectors, the timing of the effects on the overall economic activity, the labor market and inflation was still quite uncertain. With the full extent of the effects yet to be realized, Several participants have observed that because of the difficulties in isolating the effects of monetary policy, changes in economic structure, or increasing transparency over time regarding modesty monetary policy decisions, the record. Uh, the historical record did not provide definitive evidence, right? We had actually read that lower part earlier, but this little pre-part is actually somewhat useful as well. Uh, it's it's this is not hawkish, right? And and I think that's important to know it's not hawkish. It's not Hawk like hawkish would be. Uh, uh, we will stop at nothing to raise rates, right? That that would be very, very hawkish. You're not getting that here. you're getting. uh, caution. You're getting caution that that the risks are two-sided So I find this actually pretty good risks. Two-sided You know, Too tight, too tight, too loose. All right, that's a two-sided risk. There we go. Hmm, Okay, see anything else. Yeah, terminal rate projections against fell from 5.24 to a 5.15 treasury yields Treasury yields fell. Uh, that's actually a really good sign. Uh, that's a good sign. So that means bonds are starting to Rally a little bit. Again, this is a reiteration: Uh, that I mean we're about to be below 3.7 on uh, on on the 10-year treasury. This is actually really good. Uh, it's neutral waiting on data. Uh, it says this is one of the chat members here. Yeah, I agree with you I completely agree with you. Uh, but uh, so that's why it's it's a Yeah, it's a neutral. It's not a plus or minus. Uh, but well, I mean it's certainly not a minus because again, that would be Hawking Uh, Reverse Repo Facility suggested that overtime conditions could involve in a manner that would lead to Falling usage of uh, the reverse Repo facility. Well, that would have that. that has not happened. However, the manager Pro term noted that money market conditions could change somewhat more quickly in the lead up to the year end because of normal factors such as treasury tax payment date in December that could increase the treasury account balance blah blah blah blah. This is a little bit about balances I Don't think this is terribly Market important right here at this point. Uh, H4 Statistical Release: These are interesting. That's kind of where you get like the Consumer Credit Data and such a very complicated form to read. but it's it's uh. it's quite fascinating. Okay, that was a reiteration of data. What have we not? Uh. In response to high inflation, many central banks continued Um to tighten monetary policy, albeit at a slower Pace in some areas. Fine, Here's some covid zero talk: The Chinese Renminbi depreciated significantly against the dollar because of the covet zero policy. Well, that's not being helped at all right now by what's going on over at Fox Fox. Particularly, participants agreed that inflation was unacceptably high. The burden of high inflation was falling on low-income households. Shelter is making up a large share of expenditures, especially for lower income households. Correct functioning in treasury market was orderly. All right. We're going to do a summary in about a minute here. Oh, here we go. A few participants commented that ongoing tightness in the labor market could lead to the emergence of a wage price spiral. that's even though one had not developed yet. So this is the same as what they wrote last time. They wrote this in the last minutes as well. and I'm gonna Mark that actually as neutral because it's there's no change. When they added it last time, it was actually bad because they had just added it. Now they left it. Let's see if they said anything else about spiral. No. Despite the Slowdown in growth, the labor market remained relatively tight. Fine. Uh. anchored expectations? Good. Hmm. lags good. hey. policy action we already know three and a third to four. CI Moving down. Okay, good. yeah, this is great. Let's go ahead and do a summary. Uh NASDAQ Right now up? uh, one point One: two percent. I Think this is I Just want to tell you this: I Think these these notes could actually lead to a rally between now and CPI week. Uh I Really think that I I put some money on that thesis I Talked about that thesis yesterday. I Think between now and CPI week, you could have some real optimism. Uh, which I'm really excited about. So again, we're going to do a summary and um, yeah, let me hit record and and do the summary. So here we go. Hey, so the Fed's minutes just came out from the November meeting and there's a big shift in. One particular thing that was just said by the Fed and we got to break this down along with some of the other items. So we'll break this all down in a quick summary here: I'm only going to mention it once in this video so we're going to keep it to right here: Yes, Black Friday is in two days. Yeah, there's a 60 off coupon code Yeah! I keep adding content. you get lifetime access. There are no monthly fees. you get live streams if you join Elite Hustlers which is to increase your income. You're going to get the live stream access to the Hustlers live streams and the exclusive content there and the course member live streams if you joined before Black Friday and all the other courses get the course member live streams as well of course for stock and real estate analysis. I will also be ringing the bell of the stock exchange on December 9th for Market close. We'll do a public Meetup outside at about 4 30 depending on on when things wrap up inside and we'll be ringing the bell at 4 pm. If you're a course member, you can submit a little thing in Discord the little form and uh, you could come potentially for free. We'll be doing a raffle. Okay, let's talk about the Fed: the biggest shift from the Fed and I'm surprised how few are picking up on this in the mainstream media, but it was the first thing that I noticed and tweeted about and I'm like this is a big deal. This is a big shift is right here. This paragraph is critically important with inflation remaining stubbornly. High The staff continue to view the risk to inflation projections of skewed to the upside that's not new, that's old. Okay, they've always said that the risk is inflation goes to the upside. Fine. That's the old part for real activity: sluggish growth in private domestic spending deteriorating Global Outlook and Tighter Financial conditions we're all seen as Salient downside risks to the projection for real activity. Remember, the more real activity goes down, the less the FED has to hike and there is the possibility that persistent falling inflation could require a greater than assumed amount of tightening. Okay, so this is a backwards way of saying it is possible we have to raise rates more to get inflation down because of that risk We are now saying and folks, this is the first time the FED has said this. They're now projecting that real activity risks on their Baseline are equal to the potential chance that we enter into a recession sometime over the next year. We've also had the inversion of the three month tenure usually a really good indicator that a recession is about nine months away. I Know I did translate that in English here. Basically, the FED just told you we think it's just as likely for us to have a recession which means negative GDP and slower growth and we think that is just as likely as our Baseline forecast which is no recession positive GDP but below Trend growth. Remember if trend is three percent GDP and we're growing at two percent, that's below Trend If we're growing at negative one percent so shrinking then we're in recession with two quarters in a row, right? Unless of course you're the White House then you don't believe you're in a recession when you have two quarters of negative GDP But we don't want to get political. We want to focus on the commentary here from the Federal Reserve Looking at some of the other notes, by the way: I encourage you to look at this page. Very important. Page six of the Fomc notes: you get a Federal Reserve.gov So here we notice the Federal Reserve is recognizing that one of the most important indicators in labor market conditions is showing that employment costs are beginning to fall. The ECI is known as the employment Cost index. It tracks hourly compensation and benefit costs and it fell. Or I should say, wasn't it grew at a slower Pace It uh, was noticeably lower than the average pace seen over the first half of the Year. This is very good and helps offset some of that risk of a wage price spiral. Now, the wage price spiral comment was added in the last minutes of for the September meeting, and these notes have not changed. That wage price spiral argument is still here. They haven't made it worse, they haven't added to it, They haven't changed anything. They also two or three times mentioned this phrase that they added here in the Fomc statement that came out on November 2nd and that was is the statement that in determining the pace of future increases in the target for the Federal funds rate, the committee will consider the cumulative tightening of monetary policy, the lags like unemployment and and businesses slowing down, and that how long it takes for that to filter through the economy and economic and financial developments. This is really important and they mentioned a few times in this report that especially with this paragraph here and you could pause the screen here if you want to read this. But it's very important to realize the FED does not have a historical record to tell us how long the lags are and and the FED is being very cognizant of this. Not only are they being very cognizant of lags, but they're also saying hey, look, we realize that prices for things like some Commodities are coming down. We also realize that rents on new properties on new leases are coming down, but we recognize that those show up with a lag. So Commodities Coming down, down, rents coming down. those take a while to show up in our favorite measure of inflation, which is Pce. That's their version of the Consumer Price Index. This is actually the personal consumption expenditures. uh report. So the FED is being very aware uh that we have risks and I think one of the things to know is Jerome Powell realizes he has the power to change his mind. a Powell has the power power to flip and so what does that mean? Well, it's very simple. we can slow. Now this is my opinion to 50 basis points. If things get worse, we can always hike more. say inflation gets out of hand. They could just rug pull us and go. That's it. We're raising rates two percent. They know they have that flexibility, but they also know uh. but we can also freeze hikes or reduce rates if we want when we want. and a lot of this is going to be dependent on the December CPI report. and so if there's anything you do now, in addition, well, I'm not going to mention it again. I was going to mention I was going to mention it but I did not. Being a good boy, what you do want to write down and take advantage of right now is December 13th CPI report. Uh, the CPI report comes out 5 30 a.m on December 13th and then at 11 A.M on December 15th All these times. By the way, Pacific Standard Time on December Uh 15th at 11 A.M we will have the Fomc rate meeting. Uh, this is where the market right now is wildly uh or I should say widely expecting Uh or interest rates to go up by 50 basis points. That means we would see an increase from the present range of 3.75 to 4 up 50 basis points 50 BPS all the way to Uh, just so you could see this visually. 4.25 There we go. Uh, to five? Yeah to 4.5 I can't write well. Today there we go. That's terrible. Anyway, Uh, right now the expectation is that we are going to see this 50 basis point hike with a 75. Geez man. Kevin 75.8 Likelihood We've also seen the Federal Reserve's terminal rate from this morning go from 5.24 as a market implied terminal rate down to about 5.15 What else did the FED tell us? Well, they told us that they saw that inflation expectations were relatively still anchored. We did see an increase in near-term inflation expectations, but that was likely due to CPI coming in higher. Do also keep in mind there are quite a few bullish things in this. or should I say dovish things in this like hey, let's not go too hard. Let's realize that ECI is coming down the employment cost indicator. Let's realize that things operate with a lag like commodity prices coming down. the economy me is starting to slow. We could always hike more in the future if we need to, but a lot of dovish things in this. But what's remarkable is even though we've got a lot of dovish things here, what do we have? This report actually came or was was established. This meeting happened before the last CPI report which is really, really incredible because the last CPI report we had uh, substantially below expectation uh, release of the CPI report and PPI thereafter. about a week later came in also below expectations. So very, very good. I still Pat myself on the back for nailing that CPI it's I'm set in a high bar on the few for the future though. that's that's going to be tough to nail that again I was way outside the average Economist estimates and still nailed both of the numbers. Damn. I should have played the lottery for that billion dollar lottery that week of a substantial majority of participants. a judge that slowing the pace of increases would soon be appropriate and uh oh yeah uh. some of them are saying look, we probably need to slow down because we don't know what could happen. We don't know how we could affect financial stability. Remember that uh, the United Kingdom had a financial stability disaster in their guilt Market which actually ended up leading the federal Reser the Central Bank of England uh and um Mr Bailey the governor of the Bank of England you turning and basically having to print money they printed it. ended up only printing 20 billion dollars to bail out the bond market. Uh, but uh. they said they would bail out the bond market by an infinite amount and that was enough to stabilize the market again. which was very, very interesting. Yeah, you are seeing the 10-year treasury yield Bob around the lower end of about 3.7 Uh. I'm also curious how inflation expectations have moved. Remember the five year or break even inflation rate is some somewhat of a daily tool that we can use to analyze what inflation expectations are and that rate has ticked down a little bit this morning. I'll go ahead. Uh, after these these minutes came out. I'll go ahead and throw that on screen in a moment here. Uh, well. I'd like to. Uh, there we go. All right. Inflation break evens on screen now. and uh, oops, I think I used the wrong one because that was this morning's my bad. I did I did there it is. there's the appropriate one. Well, it actually shows you the difference now that I showed you both I have both of them on my desktop. This is a zoomed in of the right. You can see that this morning we were kind of ticking up a little bit and now we're actually ticking down a little bit. This is a big deal I Know this sounds like stupid. It's like come on man. it's just it's like one chart. This is important. Okay now. Uh, I guess since I told myself and you that I would not say anything else, uh I'm just gonna thank you for being here. Consider subscribing I hope you found this useful. Oh I should talk about the market really quick. Sucks for anybody who clicked out already I think this is bullish I think between now and CPI week, we're probably going to see a lot of Institutions start moving money into the market. A lot of them are in a holding pattern, they're sitting. but I do think CPI week and fed week is going to create a lot of anxiety and so I wouldn't be surprised for you to see a sell down closer to the CPI uh period of time. Anyway, there you have it. Enjoy Thanksgiving tomorrow! Thank you so much for being here I Do appreciate you as a subscriber. We'll see you next one. Goodbye, good luck.