WARNING: The Fed will Rug Pull us This Week [Watch before Wednesday]

well buckle up for a hawkish Jerome

Powell this week yeah in case you

haven't heard Jerome Powell is

testifying before Congress Wednesday and

Thursday and since he basically says the

same thing on Thursday as he does on

Wednesday buckle up for Wednesday in

this video I'm going to give you a

preview for what to expect for drum

Powell hint it's not great we're going

to go through four significant risks

that I see and remember Congress is

going to beat up on Jerome Powell that

is their job they basically beat up on

anybody who testifies before Congress

that's the point they have to make

themselves look good especially in an

election year to make it seem like

they're doing everything in their power

to make sure people are doing their

freaking jobs when the reality is

Congress basically can't get their job

done almost ever but then again maybe

that's the point of Congress to do

basically nothing anyway let's just

focus on the Fed so we don't get

political here Jerome Powell speaks 7:00

a.m. Pacific time time Wednesday morning

in Congress again he'll speak again on

Thursday morning but Wednesday will

matter the first significant risk that

we're going to face Beyond congress's

bullying which quick tangent Congress is

going to bully Jerome Powell on two

things banking crisis number one they're

always looking in the rearview mirror

okay they're going to focus on the

banking crisis risks that we're going to

have more banking regulation and they're

basically paid by the Banks to be hey y

maybe yall don't have to regulate as

much maybe maybe y'all have done enough

and y'all can can back off the

regulation a little bit C Jamie Diamond

thanks for your bag of cash I'm going to

bat for you even though I know he ain't

going to change his mind drone PA yeah

well we'll release some um we'll release

some new guidelines uh in in the coming

months and and there're going to be more

banking regulations which are a risk to

smaller Banks commercial real estate uh

we we'll talk about that in a moment

that that's going to be one aspect

another prong you're going to get from

Congress is going to be man why are

prices still so much higher than they

were in

2019 and JP's going to be like well we

bringed too much damn money very simple

okay those aren't really the risks like

we already know that banter is going to

happen there's going to be complaining

about prices and then there's going to

be please don't have more financial

condition tightness on or or or

financial restrictions on Banks and

Regulatory restrictions on banks because

if you do I'm going to get paid L from

the banks it's it's a simple game it's a

simple world it's all driven by money

let's just make that very clear money

equals

incentives okay but those aren't the

risks the real risks are actually very

simple Number One Financial conditions

loose Financial conditions almost always

leave

a well hawkish Drome Powell and let's

just say if you go to ec.com you could

see the latest Goldman Sachs Financial

conditions index and um if you if you

can look past the fact that we're

basically at the same level as we were

here in uh at the end of December

Financial conditions are basically the

lowest that they have been in the entire

last year in fact they are substantially

low now one of the things that drives

Financial conditions low are interest

rates and another thing would be stocks

well the 10 years sitting at 4.21 which

is a little low

but the stock market is breaking alltime

new highs over and over and over again

as a result even though that Nike Swoosh

is playing out in the good old cues and

the indices and driven by the hotness

and hate fervor and cash flow of AI

which the cash flow in AI is real there

are a lot of us that are like able but

the cash flow Is Real at companies like

Nvidia how long the growth will last is

questionable but it's real guys cash

flow and in this kind of Market the

companies with the gold make the rules

that's the Golden Rule after all the one

with the bag at gold makes all the rules

anyway this is going to likely lead to a

more hawkish jpow this week why does he

need to be dovish when Financial

conditions are being doish for him in

fact he's more likely to reiterate if

not even outright confirm that March

rate cuts are way off the table not only

are March rate Cuts way off the table

but may might be off the table as well

given that March is only priced in at

about a 4% chance that we're going to

get a cut not too worried about that I'm

more worried about what the pain is

going to be of Shifting rate cuts from

maybe June to July right now we've got a

24% chance of rate Cuts in May we've got

about a 70% chance of rate Cuts in June

if that gets punted to July because of

weak Financial conditions in a still

strong economy well the Market's going

to have to somehow figure out how to

price that delay in and it has not been

priced in yet and so obviously you've

got to start evaluating okay what

sectors are potentially more likely to

be at risk here the second aspect that

we're going to have to pay attention to

and I did break this down on ec.com as

well like I always do but the second

place we have to pay attention is the

jobs recession not panning out yes job

losses are occurring people are getting

laid off this is true but a lot of these

face structural issues such as high

interest rates or companies like Xerox

who just announced layoffs when the

reality is people are just printing us

come on it's zrock so yes you're going

to see layoffs in some of the Legacy

sectors that are holding on to more

employees than they really should be

holding on to but when we actually look

at the data we have to be real here Tech

layoffs for example are down to just 39%

in February of 201 24 compared to what

they were in February of 2023 and War

notices well those are trending down not

up for us to really have a labor

recession these lines should be Crystal

clearly moving up and here they're

either moving sideways or down third

even though issues like New York

Community Bank are swelling due to

office and Commercial Real Estate facing

large issues small Banks let's be real

year face significantly more commercial

real estate risk than highly important

Banks yes of course we did have a

banking crisis last year but the banking

crisis last year was driven by a

cryptocurrency collapse in Tera Luna and

valuation collapse across the board for

crypto which of course has you know

rebounded substantially now VC

reductions think about this there were

about 50% or are today there are about

50% fewer Venture capitalists today than

there were in 2021 which that ended up

helping whack Silicon Valley Bank

whereas the crypto crisis ended up

whacking Signature Bank those two wax

Silicon Valley Bank and Signature Bank

those ended up leading to bank runs at

local and Community Banks which led to

the collapse of First Republic which JP

Morgan swooped in got deposit guarantees

and back stops from the federal

government and jpow and

boom JP Morgan Chase gets a delicious

wedge deal

like super jealous of JP Morgan but

honestly good on them it's just it's

kind of crazy the big just get bigger

but the point is yes we did have a

banking crisis in 2023 but it wasn't

driven by commercial or office real

estate it was actually driven by a bank

run thanks to issues in the Venture

Capital world and

cryptocurrency now what happened well

the government has basically back

stopped all

deposits remember the FDIC bailout we're

not going to take any haircuts they

basically said no we will not allow Bank

runs in America

anymore permanent bailout via this FDIC

uh convincing argument that even if you

have more than Deposit Insurance deposit

in the bank we won't let you lose money

as a result what's happening well you've

got a banking crisis going on at New

York Community Bank that freaking stock

has gone to trash as it should because

it's got now material weaknesses uh in

its accounting practices in other words

its losses are probably substantially

larger than they actually appear to be

it's kind of like you have a little

sticker on the bank losses are larger

than they appear on our balance

sheet it's bad but guess what's not

happening at New York Community Bank

deposit outflows so you don't actually

really have a systemic banking issue

because people aren't conducting a run

on the banks maybe that's why drum

Powell and January removed the line the

banking system is sound and resilient

from his presser not because he actually

thinks the banking crisis is getting

worse but because he's just not

concerned about it anymore his bailout

worked now of course it could also be

Sinister and everything's about to

collapse but I don't know that Jerome

poell even if that's true is going to

let on to that at this Congressional

hearing instead I think we're going to

get hawkishness due to financial

conditions we're going to get

hawkishness due to the jobs recession

not really panning out uh in other which

which is a good thing I mean we don't

want people to go jobless it's just it

just means the economy is probably going

to be doing stronger than we expected

there's really no risk of a bank run

because of the universal bailout backed

by taxpayers yes FDIC losses are backed

by taxpayers uh and fourth this is the

next one to consider even drum Powell

expected real estate prices in the

single family World which really affect

consumer prices and rents he expected

prices in real estate to fall remember

he told first-time home buyers that he

would wait for more balance in the

market mostly because he expected home

prices to fall and what ended up

happening well thanks to the 30-year

lockin creating substantially low

inventory in singles what are we left

with no real price shift in singles yes

we've had volatility you know the the

end of uh 2022 and October November of

2023 saw prices down maybe 8 to 10% from

Peak so yes there was a flux down but we

continuously just recover from that

right away at least in singles maybe

that'll change going forward but the

point of this video is what do we expect

for this week in jpow and the reality is

not good consider for a moment what

we've got with GDP and this is probably

the only thing that actually maybe

supports a little bit of a doish pow why

did GDP just plummet from basically an

estimate of 3% to 2.1% which is still

above you know longer term growth

trajectories of 2% you're still above it

even with this jop over here well it

likely happened because we got

construction data on Friday we got a

negative .2% print versus a positive

2.2% print expected uh and so that

really seemed to manipulate the

seasonally adjusted annual GDP rate down

but this is also a very volatile graph I

mean look just in January we're above 4%

yes we're half that now but what's the

average probably 3% so let's be real I

would love to scream that Powell is

likely to be doish this week but I I I

just don't think that would be the

honest argument here I think there is a

greater risk that Jerome Powell is going

to be a dirty dirty Hawk this week and I

encourage you to a buckle up and B join

me in the courses link down below and

the live streams we do every day with

fundamental analysis and trade ideas

check them out by going to meetkevin.com

make sure to check out the event we've

got coming up on June 21st to 23rd as

Speaker announcements come out the price

will be going up thanks so much for

watching and we'll see you in the next

one goodbye