Here we go and it is 4.75 We got the 25 BP right along expectations. Not a surprise at all. Shouldn't see much movement off that. Now we got to get the Summary of Economic projections.

That's the next big deal. Summary of Economic Projections: The statement is out. Uh, implementation's out. Okay, Uh, 75 BP Tighter conditions of credit for households and businesses and expect them to weigh on economic activity, hiring, and inflation? That's actually a big deal.

Uh, that they're They're referencing tighter economic conditions that amplifies the Federal Reserve's hikes right? I'm trying to get the summary of economic projections, but that has not been posted yet. So let's just go ahead and go through their press release alone here. Uh, they say the U.S Economic system remains on resilient ground. We've got uh forecast.

Here we go: Median forecast: 5.1 They're keeping it stable at 5.1 on the SCP. They didn't go up and they didn't They didn't go down. I Actually think that's bullish. They're keeping the same pace for reducing treasuries holding on mortgage-backed Securities So no change there.

That's interesting. 5.1 I Really want to see that? Dot Plot Waiting for it to post on the website here? This is all coming through the wire right now in terms of these, uh, these updates that we're getting so waiting for. Oh, there we go. Projections are out and the projections, in my opinion, are the most important.

And then we'll go through the policy implementation statement as well. So uh, here. the summary of Economic projections. Wow.

I'm surprised. Look at that folks. They kept the projection the same. They actually think they're gonna.

there's their higher for longer. Oh okay, that's the hire for longer going up to 4.3 instead of four one. Okay, oh, look at that. They actually moved this slightly closer to recession in 2023.

Usually they do not go under uh, 0.5 That's interesting. Then they. They're actually keeping us out of a recession at 24, 4 and 25 unemployment rate: 4 6 Pce inflation. And you can see the previous estimates here.

They did reduce GDP both for 23 and 24 were reduced so lower GDP and 23 by a tenth of a percent lower GDP and 24 by uh, four tenths of a percent. That's 400 basis points unemployment rate? They are refusing to Signal Any kind of increasing pain in the unemployment rate. Uh Stocks By the way, seem to be liking this. This is.

uh, this is kind of what we wanted. This was my best case scenario was 25 and dovishness. Uh now. I Thought this might be a little bit more dovish right here, but that 5-1 on the median is a little higher than I Thought: Look at this folks.

They're keeping inflation expectations for Pce stable slightly higher for 2023, stable into next year Core: slightly higher, but mostly stable here. No. Paul Volcker. No runaway inflation.

What were the rain changes that we got for GDP Uh oh oh. look at that central tendency right here. Somebody's actually knocking the door of recession. Look at that range right there.

Change in Real GDP 0 to 0.8 That's a little bit of a red flag. That's a recessionary red flag right here. Look at that range. there's your recession There it is.

Uh, but uh. We also had that range projected last time as well. so one of them is actually getting us a little bit closer to out of recession. Whereas previously, they also thought we might see that recession.

the range is sort of the low versus the high right. Uh, the the median is is a type of average. right? It's supposed to represent the middle. Let's look at the Dot Plot What do we got for the Dot Plot Wow, they're actually a whole lot higher than I Thought they're all consistent here for 2023.

Q4 pretty much all staying above that five percent line now. I Want to compare that to what we had in the last Dot Plot So let's go to the last plot which was right here and let's go here. Kevin's estimates were wrong. Uh, so I'm gonna erase these so that looks pretty similar.

Uh, you've got I Mean you had two dots below for 2023. All of them above with two dots as high as about 5.675 going over here? Yeah, you've you've really just Consolidated around that five one level. So they're sending a signal here that we still have uh, one or two hikes left in us. So this is really telling us that we're gonna get our March 25.

We're not gonna go down. We're not gonna pause yet. We have to deal with what's remaining to be elevated inflation. Uh I would say this is this is uh, no signal of stress in banking.

really. We are probably setting up for a May 25 as well. This will take us to uh, five percent right on the lower bound and a five on the lower bound is probably in line with that tendency of uh 4.1 percent. So the Federal Funds rate being at 4 or 5.1 Rather, it sits right there in the middle of one more hike in May and then done.

That's about where we sit. So one more Before Dawn I Think it's too soon to call for a pause I Expect Jerome will tell us he's being data dependent. Uh, that's not going to be much of a surprise at all. Uh, looking at uh, yep, the dots moved up a little bit.

The FED let me see really quick what we what else we have here. What are the suits saying? Like most economists, the FED does think that banking turmoil will affect the economic Outlook Recent developments are likely to result in tighter credit conditions for households. Yep, we expected that. You got Tesla popping off a little bit right now.

Uh, jumping up about one percent. Looks like most stocks are trying to pump a little bit. Let's fix this here. Actually, let me try this.

I have a new button here. let me see if I break something by doing this. Oh, that looks good. Look at that so we could keep that up while talking.

uh, although I should move. whatever. Okay, anyway, so it's a little more adjustments to do. but anyway, I'm playing with this new board.

sorry about that you. You'll get to experience it a whole lot more if you want. If you join the courses linked down below, you get all those private live streams all right. Fed remains highly attentive to inflation risk, using interest rate tools to deal with inflation, using balance sheet to address Financial stability issues.

That's exactly what I thought they would say that. Look, we're gonna keep going 25 BP because we got to deal with inflation. But guess what, We got a whole tool belt baby. Oh, you got some inflation.

We got some pepper spray for you. Oh, balance sheet problems, We got some handcuffs for you. We got a whole tool belt. You want to keep trying us I Think that's what we're gonna get from J-pal here.

Initial take on this per Wall Street seems to be slightly dovish. uh does look like uh, risk assets are moving up a little bit usually what happens by the way and I just want you to prepare for this. Usually what happens is we get a W Okay, so often that and not in this case because so far we're going up, but often we actually, uh, go down a little bit. I Mean maybe I Guess we still have 23 minutes, but oftentimes we go down.

Going into the the press conference as soon as the Press event begins. Right here, stocks hit a little Peak Then as he's talking, they tend to go down and then and this is an average over the last seven instances. What the stock market The S P 500 has done. and then towards the end of the day, they end up back up.

So this is usually the kind of volatility pattern that you get per the average of the last seven meetings from the FED. But anyway, what do they say here? Inflation remains elevated. Modest growth. They did take us a little bit closer to recession.

Recent developments are likely to result in tighter conditions for households and businesses and way on economic activity, hiring, and inflation. Hey, well, this is kind of what they want. a little bit of a Slowdown in hiring. Because of the uncertainties, the yield curve has deepened.

Uh. markets. Definitely see this as dovish. The committee seeks to achieve maximum employment and inflation at a rate of two percent.

over long term and support of these goals, the committee has decided to raise the target range for the FED funds rate to 4.375 to 5. The committee will closely monitor incoming information and assess implications for monetary policy. The committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive enough to return to two percent over time. Yeah, well, if you refer back to the 80s over time was 20 years in determining the extent of future Uh increases increases in the Target rate, the committee will take into account the cumulative tightening.

The lags of which we've already seen future increases is very interesting because so far they're really only pricing for another 25 BP. So uh, we'll see what happens there. In addition, the committee will continue reducing its Holdings of Treasury So no change over here. And second page.

Uh, nothing. really. It looks like this was unanimous. voting for monetary policy actions were all everyone.

and the committee's assessment will take into account a wide range of information, including readings on labor market inflation pressures, blah blah blah blah Okay, Fantastic. So we got the 25 that we were expecting. Markets taking this as dovish though usually right into the press or we have you know, a little bit of a Slowdown so that's not uncommon. Stock market seems to do that in a row.

Uh, 89 out of 100 economists were looking for 25, so this is really no surprise. a pause would have sent the wrong signal. I Think overall this SCP is not as dovish as the best case scenario, but it's decently dovish. I Was looking for a little bit of a drop on that uh, that Fed funds rate projection, so unfortunately does look like they're hitting us with probably another one to two raid hikes.

Uh, if you look at their statement and you hear them say uh, increases and implies lies two more and if you look at these projections here, it implies one more so one one to two more 25 Bpers Uh, they are acknowledging the tighter Financial conditions, which that's what's leading to that softening in Real GDP and uh, the central tendency for real GDP Uh. Fed's message is clear here. this is. uh, these are now the Wall Street suits.

So let's say what they have to say here: Wall Street Suits The Fed's work isn't done. However, the median projection as to where rates will be year end does show that officials are paying attention to stability concerns. yes, in the fact that they haven't lowered it. or it's optimism on inflation.

Either way, dovish overall here. Bond yield steepening. Looking for a little bit here: the language on ongoing increases implies some ongoing Uh tightening. Yep, no kidding.

Fed will continue. and we read through that already. Okay So this gives you an update on what we got in terms of the 25 BP My take Takeaways from this: All is normal. Okay, big bottom Line: Takeaways before the FED presser Big Bottom Line: Takeaways for the average American The average investor? Whomever? Okay, big bottom line: Takeaways here.

What do we got? We got number one: No Paul Volcker. There's no Paul Volcker. So if you're still sitting around really thinking the stock market's gonna plummet on a pivot, you haven't listened to my explanation on a pivot. We've explained that many times before.

I Really don't want to go through it again? Uh, basically there's a pivot and then there's the FED U-turn Generally, we want to invest where the FED U-turn is and u-turns usually coincide with not only a big mix in policy, but also uh, bailouts. which we've started seeing some of those bailouts. so are we getting closer to a U-turn I Don't know, but we haven't seen any kind of Fed pivot yet. Uh, and honestly, I hate saying the phrase.

but remember folks, this pivot will occur when inflation ends. The market is worried about inflation not going away. Well, as soon as the FED u-turns and changes directions, it, it means they have accomplished killing inflation to their satisfaction. The FED is their problem in the cycle in 2000 2007-2018 The FED wasn't the problem.

it was Tech It was real estate and it was a lack of inflation. Those were the market problems before now. the Fed's actually having to respond to too high inflation. so the Fed's creating its own problem.

When the FED stops fighting its own problem, that's a great signal. That means they've accomplished their goals at least to some extent. So anyway, I'm pretty happy about that overall. I Think this is uh, this is, uh, kind of a long expectations.

You know we're not going to get a super Dove Here we still got work to do I Was hoping it to be a little bit more dovish, but it's dovish enough. I Think to uh to be satisfying to markets, it should give you confidence that we're not looking at Paul Volcker. So that's number one. Number one, No.

Paul Volcker number two. Closer to potentially that that accomplishing the mission right? Uh, number three. We did get the Federal Reserve Acknowledging that yes, there are going to be issues because of the banking crisis. Those issues because of the banking crisis are specifically going to relate to tighter credit conditions.

We've been covering those regularly. Those are likely to lower earnings per share for companies in the future. Specifically, in my opinion, spy companies S P 500 companies your Consumer Staples your your Industrials wouldn't surprise me. so uh Jerome Powell speaks obviously soon.

but uh, for me, average person here? no Paul Volcker is bullish. Uh. overall relatively dovish Statement: Yes, still potentially looking at one to two hikes. Uh, and uh.

we'll see what Jay Powell has to say. now. keep in mind how the market moves going into J-pow talking. I'm gonna make this very, very clear.

out of the last seven times that we've had these meetings, the average: the way that the market has moved is initially up. Then you get a Down and then you get an up again right when Jerome Powell speaks. Then you get a down during a speech and you end the day up. That's usually how the pattern goes.

That doesn't mean this time can't be different, but that's typically what you see. So I think this is fantastic now. I Know that some people say oh, rate hikes are not bullish I I mean I don't I The fact that some people were actually thinking there would be a pause here blows my mind. That would be more concerning.

that would be concerning that something serious is actually wrong. Rate hikes at 25 are in my opinion very bullish because they mean nothing broke to an extreme level and we're not visiting Paul Volcker. If we were getting raid hikes to the tune of one to two percent 75 BPS maybe over and over again or 100 BPS that would be bearish. A pause in this case that would have been bearish.

I mean like I Don't know how you could say that a 25 BP is not a fun is not a fantastic uh result. So far again. Jay Powell will be talking soon. Uh, but this gives us a little bit of a heads up here in terms of uh, a summary of so far what the statements show.

again trending a little bit closer to uh to recession. but uh, the FED refusing to really at least in aggregate, believe uh, that we are knocking on the door of recession? Remember those estimates are an aggregate estimate of everyone. It's not like they collude on those, although they might anyway. Uh and uh.

The other thing to remember is today's coupon expiration day. so get the best price ever. Link down below: Prices go up over time and you get a price match guarantee. Uh, in the event they were lower for some reason in the future.