Welcome back to the real Fomc Minutes Presentation: If you are watching this on replay, scroll ahead by eight and a half minutes. But first, let me remind you about the expiring coupon code today for the programs on building your wealth Link down below specifically Zero to Millionaire real estate investing and stocks and Psychology Money where you could see all my crazy trades folks. We are just eight and maybe 10 seconds away from the Fomc minutes being released. We are looking for a lot of different items we're going to be looking for.

Phrases from Strength Terminal Inflation, disinflation, Deflation, Credit, Housing Service Core Average Pause: Those are gonna be some of the core words that we're going to be looking for. We are going to be uh, going through every bit of this Fomc press conference. We've got the Uh Bloomberg um, uh, You know we've got Wall Street's expectations up. We've got, uh, the Bloomberg forecasts up.

We've got the Wall Street Journal uh, ready to go and their live blog. We've got a lot of different sources here to review information. so while we wait, let's take take a peek at what CNBC has to say as we're going into this. Actually, they're talking about Warren Buffett right now so we'll catch up with them in a moment.

So uh I want to take a look at what might be useful is the last Fomc meeting minutes and the last time we did this? Let's see here. let's do minutes. Remember these minutes are going to be from March 22nd and the last minutes we got were actually from February Uh, they were from Uh, over here. let's take a listen over here.

There we go. These were the last minutes that we got. so let's go through some of these while we wait for the new minutes to come out. These were again from February February 1st the staff provided an update on its assessment of the stability of the financial system, which is very interesting.

The Staff Judge that asset valuations remained notable. So that's going to be another phrase we're going to want to look for is let's type in valuation. As another thing that we've look for in addition to looking for valuation, let's see if we've got uh, what else we have here. We got valuation.

We have, uh, property. We can type in property as another word to look for. We have, uh, price to earnings? Uh And so a lot of comments here about valuation. and this was from the last segment.

What were some of the other comments we made? A real estate potential for larger declines. Valuations remained High S p above median trend. That as well of the S P 500. right? That a lot of the S P 500 stocks or staple stocks that might end up uh, essentially in the future a little bit more pressured in terms of, um, what we would expect for Staples earnings growth.

That's why I Think there'll be a growth at all cost. a transition in the future. growth at any cost transition. That's where I think people are really going to be excited by pricing Power Stock speed and phase Nvidia Tesla Apple you name it.

you can see all of those uh in my ETF or on my website and the courses I'm Building Wealth or or otherwise at Meet Kevin.com Check those out but this is the last minute set and I think it's fascinating because they also really talk about this difference between credit see previously they talk about is this from February where they talk about high credit score borrowers being able to meet standards. One of the things that I want to look for in this meeting is going to be a difference in if there's any tightness for high credit borrowers, so look for that. We'll also want to see uh, what is talked about in the sloos. those are the senior loan officer surveys so that way we can get a little bit of a tell for how much tightening and a credit crunch we expect going forward.

Now the stack essentially flat. Right now, there's a lot of tenuousness and and dare I say stress built up in this uh in these minutes here. For some reason it seems a little odd to me because really, uh, it seems like we should be enthusiastic about the CPI report that came out this morning. We came out at expectations for me, at least for the month over month.

a little high for me on core, but We did meet the Market's expectations for Core and came in below for headline, which was great that month over month disinflation is slowly coming. Maybe it's coming a little slower than some people expect, so there are some folks who are judging that. Oh well. Maybe the FED will end up having to do two 25 basis point hikes instead of just one.

And so I think there's an element, at least some element of of people being a little bit nervous because of that potential markets right now now. still pricing in about a 71 percent chance of a 25 basis point hike in May I Do think that will be the final hike from the Federal Reserve 25 basis points May 3rd Write that on your calendar. If you have not yet, make sure you write down May 3rd as the next Federal Reserve Open Market Committee Meeting it starts on the second, ends on the third. Uh, let's also go ahead and write down the next CPI release.

So May 3rd will be based likely on today's CPI The next CPI release will come out on May 10th. so we've got a little bit to go, but a little less than a month away. In addition to that, tomorrow, we're also going to be getting PPI data. I'll be presenting that as usual in the morning.

Meet: Kevin Report: It's the free live stream you're welcome to join every day it is at 5 30 a.m Tomorrow I will be live and I will stream to you the PPI inflation report. So we're going to be getting not only will the FED be getting the information on CPI from today, which we saw, but we'll be getting PPI data. We'll get retail sales data. Uh, so PBI tomorrow, retail sales on the 14th, We'll be getting expectations on the 14th.

and then if we zoom out a little bit more towards the end of the month, let me see here. we should also be getting some new Pce numbers, which is the Fed's preferred inflation gauge. Let's see when those come in, we're going to get it looks like Pmis again. All right, Pce comes out the 28th, followed by some additional University of Michigan surveys.

So uh, keep in mind, uh, those are going to be some dates that we want to pay attention to. Specifically pay attention again to Uh tomorrow for PPI, the 28th for Pce, and then of course the FED meeting on the third, which is exactly what the market is so tenuously responding to right now I think uh, Market's very, very nervous about what's in these minutes Personally I don't think we're going to find any skeletons, but the NASDAQ is flat right now. we're about two minutes away. We've got the S P 500 up about 30 bips and the Dow Jones up about 45.

oil sitting up two percent today, both on WTI 1.9 on Brent International bonds sitting basically flat on the 10-year which is somewhat surprising because we had to plummet this morning. The two-year was down 14 basis points this morning. it's now down about five basis points so it's barely moved, which is a pretty dramatic shift here. And did Kevin just leave skiing I was just riding the blacks.

Yeah, it was fun, had a good time, but I had to come back in take a break. Uh and uh, get off the you know, the the rugged, the rugged bumpy ones out there. Yeah, although mostly I'm more of a blue double blue kind of skier. but uh uh.

but I uh yeah. all right, let's uh. let's get focused in on here. So we are now, uh, probably within about 45 seconds.

We've got, uh, our expectations up for the Federal Reserve We have our Fed website up. We are on time this time, unlike when I started streaming an hour early about an hour ago. silly me, forgot that I'm in a different time zone I almost forget where I am sometimes. Um, all right.

So here we go. we're just just seconds away. So let's get ready. All right.

Here we go. We are ready all right. What do we got here? We go the Federal Reserve Oh dear, it's always the FED It's always the Fed. By the way, this would be a great time to remind you about the expiring coupon code linked: Down Below In fact I put a little banner down below I Can even throw up this little Banner Although that's not the right one, we can throw up a different little Banner like this one right here.

Talk about that expiring coupon code. Okay, here we go. We should be live now with our minutes and let's see here We go. Here We go.

Still waiting for him. We are waiting, waiting waiting waiting. We are within the right time frame for the minutes to come out. Several Fed officials stress the need for a Fed policy flexibility.

Fed officials backed. All Fed officials backed a 25 a basis point increase at the March meeting we have. um, the FED projected a mild recession starting later in 2023. No way.

Oh My gosh, they said the r word. oh no, that's terrible. That's actually really bad. Um, I would not have expected that word to show up in these minutes.

Uh, that could end up being bad for YOLO calls. Uh, okay. let's go ahead and see what we got here. I Want to see where that r word is as soon as possible? Uh oh my Gosh.

All right, let's see here it is. For some time, the forecast for the U.S Economy prepared by the staff has featured subdued real GDP growth for this year and some softening in the labor market. Given their assessment of the potential economic effects of the recent banking sector developments, the staff projection at the time of the March meeting included a mild recession starting later this year with Anointed with a recovery over the subsequent two years. That's because of the banking crisis really? I'm a little surprised by that.

Uh, but okay. let's see here. Real GDP growth in 2024 was projected to be remained below the staff's estimate. Well, if anything, maybe that means the FED is finally waking up to the fact that they're they're going a little heavy here.

that maybe they should go a little softer handed if they're starting to use the r word. Maybe that means they're going to pause sooner than where we think. but they did all back a 25 basis point hike. So uh, that's very.

That's a very, very interesting Mark We're going to put a little big X over here. Let's go ahead and look for other, uh, incredible words over here. So we're going to look for, let's see if we have a terminal. Mention the word terminal is not mentioned for terminal Ray We're looking for disinflation.

We do have disinflation mentioned over here multiple times we have, with inflation still well above the committee's long run goal of two percent. Participants agree that inflation was unexpectedly High Participants commented that recent inflation data indicated slower than expected progress on inflation. Slower than expected progress? That's not good. Oh, there we go.

Come back. No. come back. Stop that you silly.

iPad No, this is not the time to be a bad. uh. anyway. I'll keep reading and particularly, uh, come on Uh, here we go.

Sorry, one side, this is ridiculous. It was totally fine. up until now. There we go.

uh. In particular, they noted that revisions to price data had indicated less dense inflation at the end of last year than had previously been reported and inflation was quite elevated. Participants noted that on a 12-month basis, core price inflation had declined as Supply chains continued to improve, but the pace of decline had slowed. Highlighting these still uncertain nature about the disinflation process, participants expected housing inflation would likely begin to slow in the coming months, reflecting continued smaller increases or potential declines in rents on new leases regarding prices for Core Services Excluding housing, participants agreed there was little evidence pointing to disinflation.

This component that's not good. So they're basically now saying hey, like regarding prices for Core Services We're still not seeing that Core Services disinflation. We're hoping to see which is not good. Uh, and uh, they.

They're hopeful that we're going to get housing disinflation, but we're not yet actually seeing that housing inflation not super great. Okay, then we have participants generally judge that some more easing in the labor market and slowing a nominal wage growth would be necessary for sustained disinflation. That's interesting because we really don't have any evidence of a wage price spiral right now. so I'm surprised these are actually a little bit more hawkish than I would have expected.

A little bit more hawkish notes here so far. Okay. Additionally, participants observed indicators of short-term inflation. expectation from surveys of households and businesses had come down further.

Okay, fine. let's see here. Participants also discussed the potential effect on inflation of developments in the banking sector. Oh my.

God There we go. Okay, they noted that a type oh, this is just ridiculous. Uh, I'm I'm so sorry this is happening. Hold on, Let me let me read from over here standby one second.

Okay, here we go. Uh, front end treasure yields Falling Again with two year back under four percent. Uh, we know that Fed policy makers did lower their views on the peak rate even before these meeting minutes. Okay, let's look at wall Street's estimates here before we go back into Uh.

Reading more about this stand by, we know that Fed policy makers did lower the views on Peak raid and that's fine. Before the Svb collapse and it's aftermath, there was every indication the Fed was going to add another quarter point the estimate. Here's some immediate takeaways: uh: policymakers scaled back expectations for interest rate hikes. Uh, this year, after Banky turmoil, we know that officials stress the need to watch on upcoming data.

That's fine. March Decision to raise interest rates by 25 BP was a net unanimous. We know that Uh. Fed staff projected a mild recession starting later in 2023, followed by a Uh subsequent recovery in the following two years.

They didn't say what strength of kind of recovery. not just any recovery officials judge the worst of the banking turmoil was likely limited to a small number of banks with poor risk management procedures, and that the banking system likely remains sound and resilient. Discussions noted risks to inflation in both directions, with resilient demand pushing prices higher, but a credit crunch having a potential slowdown effect. Okay, fine, none of this.

So far a very big deal. This is the first time we're seeing the r word talked about. It does seem like the banking crisis may be pushed uh, the FED into this fear about recession a little bit more so it's going to I Think take the market a little bit of time to digest the r word being mentioned here, but it does sound like the r word was really mentioned mostly in response to the banking crisis. Most of the market feels a little perplexed here because of the word or recovery.

In the subsequent two years, the word recession was mentioned three times. This time they didn't mention the word recession a few times in the prior Fomc minute notes. They mentioned it four times in the prior notes. But it's worth mentioning that this cycle or or this note this was the first time in the minutes that they actually mention hey, we might actually go into recession because previously they talked about fears of recession.

This is the first time we're actually getting Okay, yeah, it looks like we're probably going to slip into a recession within the next. Uh, you know for a couple quarters here, which that is what most analysts are pricing in right now. Keep that in mind: Most Banks: JPM Uh, Goldman Pricing in uh, a likelihood of a recession between Q3 and Q4 Those are the highest likelihoods that we're getting for a recession between two three and Q4 Most of the recession uh analysts are are based on the inverted yield curve, right? The fact that treasuries are so terribly inverted that the yield curve must, uh, be signaling a substantial recession coming. Most analysts also suggesting that it's actually the steepening of the yield curve that's going to give us the most pain in markets.

Let's look for some more key words here. Let's look for housing. Let's see what we get about housing multiple. We get household here.

Higher treasury market volatility contributed to wider spreads spread ads for household and business borrowing. Okay, keep in mind what how higher spreads means higher spreads means treasury yields can fall, but interest rates can actually still remain high. There's a reason why you still have seven percent, uh, 30-year fixed rate mortgages. even as treasuries are coming down.

It's really weird. It's because there's more of a of a fear right now. Uh, that's being priced in uh. Financing conditions for business households and municipalities had tightened during this period and were moderately restrictive overall as borrowing costs increased.

notably with the expected path of policy rates and treasury yields and some lenders appearing to tighten non-price borrowing terms. Whatever, that's fine, non-price borrowing terms. Basically, this could be like points, uh, anything other than the actual interest rates, but that's just sort of a way of of limiting to whom you're offering loans. Borrowing costs for businesses, household municipalities? Rose That's fine.

Nevertheless, generally solid funding flows suggest. most firms in household had remained broadly able to access funding. So in other words, even through this banking crisis, people are still able to get a funding. Mortgage loans to households remained available.

Credit quality of business and households was largely stable. However, measures of credit performance showed some signs of weakening. Leveraged loan quality deteriorated somewhere after the closure of the banks. The bank failures.

Credit quality for Residential Mortgages remained unchanged. unsurprising. Generally, the credit score for somebody getting a loan today is substantially higher than it was during 08. We're talking about potentially an 80 basis point difference in credit score.

Think about it as like a 740 versus a 660 credit score, so it was substantially more qualified people today than what we used to have in 2008. The in the discussion of the household sector, the participants noted that incoming data on real consumer expenditure showed a pickup in spending in January and February. They attributed this to strong job gains Rising disposable income and households continuing to run down excess savings accumulated during the pandemic. That's not great because it really suggests some of the strengths we've been seeing at the beginning of the year has has really potentially been uh, overblown and overdone one.

And that's dangerous. But it's good that the Federal Reserve is now recognizing that they could be tightening us into a recession. The Fomc is now citing quote risk management considerations in taking a more balanced view of the outlook for monetary policy. On one hand, there is a concern that inflation could stay high for too long.

basically something everything everyone has been talking about. but some participants are now talking about the downside risks to growth. So in other words, there's some pessimism coming back into uh, these discussions here. The word counts deep or inflation increased to 108 times from one or from 91.

So an increase in the mention of inflation disinflation mentions increased from five. uh, or two, five from zero. So disinflation was mentioned multiple times. We'll go through that as well.

just a moment. Uh. recession. Though clearly a on the radar of the Federal Reserve.

So uh, personally, I think this. this is a way of. In my opinion, this is consistent with a higher for law longer this is. let's get to five and hold.

That's what this really feels like to me because they are starting to pay attention that they could be causing that recession that they're looking for here to officially kill inflation. We are trending down, so we're going in the right direction for inflation. I Think the fact that we're going in the right direction suggests we don't need higher rates. Uh, we just need to get to five percent and stay there.

So one more 25 BP is what? I think They also agree that recent developments were likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation, but that the extent of these effects was uncertain. Yeah, more uncertain and of course, highly attentive to inflation risk. Now, remember, these documents came out uh, well, before this inflation report, so the FED did not or was not able to consider the inflation report that we have this morning. Markets mostly stable from what we saw before the report here uh, oil and and is still sitting up about 1.9 percent.

Treasury is basically flat. The stock market NASDAQ down about 11 bips Dow Jones up 0.43 so not a terrible, massive amount of movement over here. Let's see if we have any mention of price to earnings ratio here. Let's get into price to earnings and we do have.

What do we know? we do not. Uh, Pte price? No, no, no, no price to earnings so no price to earnings measure. What about valuation? Let's look for the reward valuation. word valuation was removed so no comment about valuations was made.

What about uh, residential? Let's look up residential. Maybe we could see. Uh, let's see here. growth in business fixed investment was slowing and residential investment continued to decline.

A little bit of a red flag there to uh, your likes of like an end phase, right? Uh, unfortunately. But uh, that's to be expected to some degree. Credit quality for Residential Mortgages remained unchanged. Let's also get to Uh High Credit.

Let's see. Okay, let's see if there are any mentions to high credit. There are mentions here of Credit Suisse Uh, but we already know what happened with the banking crisis. So I Feel like that's looking a little bit too much into the past job? Uh, Jolts remained High That's fine.

but we did have a lowering of Jolts after this. Fomc? Uh, uh, after these minutes, right? So in my opinion, you know we've We've like a lot of this. A lot of the concerns that they have here has somewhat already been addressed by a new inflation report. We got a new Jolts report.

We got a lot of these have been coming in good, the new Jobs report coming in showing more weakening, right? So some of this information is without a doubt definitely dated. And if you want information that's not dated, join me in those course member live streams every day the market is open and on. Saturdays If you're in the Elite Hustlers group, we have custom unique information to help you build your wealth Every single live stream, so hope to see you there, especially in the fundamental live streams. Okay, so this is about credit ratings inflation remaining unacceptably High That's fine, but again, uh, we we, uh, aren't.

Including the latest data, a few participants observed that credit card delinquencies, particularly for lower income households, had risen in the face of of higher inflation. This is exactly what you would expect right here. This paragraph participants noted that recent developments in the banking sector and the associated rise and uncertainty would likely weigh on consumer sentiment, and that increased caution could restrain spending or straining spending could help lower inflation. Of course, of course, the situation remains fluid.

Let's look for some other words that we're looking for. Not a lot of Boogeyman men in here. High Credit priced earnings Property Evaluation paused. We have any word of the word pause in here.

Uh, we do. In response, many foreign Central Bankers continued their monetary policy tightening, although some have either paused or indicated that a pause was soon possible, citing the importance of assessing the cumulative effects of policy rate hikes. That's actually nice to see the FED mention that over here. but this is a staff review of really the the what other central banks are doing so it doesn't mean too terribly much for us.

Okay, now let's go ahead and look at uh, the word strength. Uh, okay, strength. Um, strength. in its supervisory and Regulatory approaches.

We've consequently those participants judged and appropriate to increase 25 because of elevated inflation strength of the incoming economic data persistently High Inflation Okay, that's not a surprise. Let me quickly see what else Wall Street has here. Uh, Bloomberg says that the minutes were more dovish than in January Yeah, maybe you could call it dovish when they start talking about recession. I Suppose you could say that's dovish.

It's not really hawkish when you're talking about. ah crap. We think we're going to drive us into recession now. Keep in mind, remember what J-pow said in the last Uh press conference.

In the last press conference, he actually said uh yeah. The the soft Landing scenario is is um, is getting really really tight and the softening softening out a factory output over here. Any talk about soft land softening in labor market? No. Okay, so the soft landing approach is is starting to look worse.

So I think Jerome Powell really signaled that in his last meeting. When they do talk about this mild recession starting later this year, you know this could end up being like a 1994's recession where you just go through a mild recession. It's just what you need to get the FED to U-turn Uh, and and then you're good. You know.

Look initially I was a little nervous about this mention of recession. but uh, you know, putting it all together with what we've seen here: I Don't think this is absolutely terrible. The Vix is actually down three percent on the day. It's actually, this is a good sign that the FED is finally cognizant that they might be pushing us to do a recession.

This is the first time they've actually been cognizant of that. uh, they're telling us they're uncertain about, uh, what the credit crunch is going to do. They're mixed on inflation, but obviously we got a solid jobs report. Solid Jolts report Solid Inflation report today.

This to me, everything is pointing to 25 BP And go away. So a hike in May and go away. That's what I think we've got. I Think you've got a fantastic opportunity to get the best price on the programs on building your wealth link down below.

Uh, take advantage of that coupon code before it expires tonight. Make sure you do that. go to Metcaven.com Join or go to meet Kevin.com Whatever's easier for you. Let me look at some of your commentary here: Market is forward-looking hates uncertainty, but will hit hard when.

Yeah, and that's why I Actually think the market could do well here because a lot of people are saying dude, the FED is blind, they're causing a recession and now the Market's finally like. all right. Finally, Jay Pal's getting off his ass and he's realizing he's causing a damn recession. It's actually good.

Remember, write down your Catalyst May 10th for the next CPI you've got the 28th for Pce tomorrow. I'll be covering Ppi is the recession priced in Kevin Honestly I think a mild recession is I Think you've got most EPS estimates or negative for businesses year over year comparing 23 to 22. Am I Really afraid about an EPS miss or a negative EPS for companies? No Uh Am I afraid of negative GDP no Am I afraid of a deep dark recession where the FED keeps hiking and inflation runs away? Hell yes. Am I as long as inflation continues to Trend down the way it is right now.

I'm I'm bullish uh and I am I Am Pro Nike Swoosh this is consistent with Nike Swoosh it's volatile. remember I've never promised it was going to be easy in a straight line up and that is exactly what we're not getting right now. Hold on one second. Hey, Andrew it is.

Would you mind if I called you back in about five minutes? You got it. Thank you. Bye Okay, sorry. okay uh Kevin Any chances they push back past five.

Well remember, technically a 25 basis point, the hike is going past five. A 25 basis point High gives you a range of five to five and a quarter That makes your effective fed funds right? 5.125 right? So yeah, that is going past five now. do I think they're gonna go again? 25 Not with this data. Uh-uh not with this data I Think we're done I think we're hiking May and go away.

Uh, that's that's my take. When am I coming out of the closet Kevin Why? Because I just came out of the closet with different clothes on from like an hour ago like you want me to go change again? Is that what you mean like do you want a different suit I Could go back in the closet and change and come out with a difference soon. Now what you're asking for? Uh, let's see here. fed is causing since stems what? I I Know there's always this politicizing of the FED I I I I get the Jade I Don't believe it and this is how is weakening good when they hold rates until 2024.? well they'll start slowly cutting.

uh but uh. but but you know these these, these rates will bite. uh and I think they're right I think they will buy it in the second half of this year. So anyway I'm gonna go ski I Gotta go ride some blacks again and uh, we'll see you in the next one.

Appreciate y'all See you tomorrow for PPI and we'll see you at 5 30 a.m California time. We'll see you soon. Appreciate y'all Good luck everyone! Best wishes I Love you.