Holy Crap - The Lies of What the Fed *JUST* Said [Fed Rate Cut].

well holy smokes it is official the

Federal Reserve rate Cuts have begun

expect to get some emails in your bank

account suggesting hey it's your Banker

your savings rate is now down by half a

percentage Point

M now jome Powell calls this a

re-calibrating of policy and one of the

things he left off with is suggesting

that he sees no indication that we are

presently in a recession at the same

time as he also just we're not willing

to declare Victory and we are not

declaring Victory on inflation but both

of these in my opinion are straight up

lies I think that the Federal Reserve is

declaring Victory on inflation I'll show

you that on the summary of economic

projections in just a moment not only do

I think the Federal Reserve is declaring

Victory on inflation but I think the

Federal Reserve realizes if they came up

in front of a nationwide audience and

said yeah yeah there's some recession

risks you would see the market so

quickly sell off that you would

literally create the very recession you

are trying to avoid this is why of

course Drome Powell says quote I don't

see anything in the economy that

suggests the likelihood of a downturn is

elevated we don't see that you see

growth at a solid rate you see the

market very solid I don't really see

that that was his line on recession but

wait a minute let's take a look at the

summary of economic projections does

that align with what your staff is

thinking because see in this summary of

economic projections what I've done is

I've compared the March 2024 estimates

yall gave to the current estimates for

next year and in March of 2024 we had a

low estimate for the 20125 GDP of

1.9% right now that low estimate has

moved to 1.3% notee that's the range

right they expect it'll be average

around 2% but someone at the FED thinks

it could as low as 1.3 the lowest low

estimate was 1.9 now it's 1.3 this the

FED sees the weakening in GDP notice

Jerome Powell did not once suggest oh

you know the Atlanta fed real GDP says

GDP is growing at 3% why wouldn't he

mention that he doesn't mention that

because that is extremely misleading and

would send a signal that they're blind

instead he says H GDP is progressing at

roughly the similar Pace now as it was

at the beginning of the year at about a

2.2 percentage Point Pace huh

interesting so if GDP is expanding at

2.2% and you think there's this downside

risk we could go potentially somebody at

the committee thinks we could go as low

as 1.3 which again the previous low was

1.9 and the previous low for the

unemployment rate was 4.2 and now it's

4.7 as as or sorry the previous High

estimate was 42 for 25 and now it's 47

it kind of suggests that there's some

folks over at the FED that are going no

things are weakening more than we

expected and Jerome Powell did indicate

that in this meeting as well he tells us

very clearly hey the jobs Market has

started to weaken substantially

especially when we look at job openings

now Jerome Powell is trying to put a

floor under that think about kind of

like a line on a chart plummeting and

he's trying to put like a support

underneath like on a stock it's like

okay how can we how can we stop the

collapse that's why we got a 50 basis

point cut today they're trying to put a

floor under that labor market slowdown

but it actually makes me nervous and I'm

going to give you my predictions for

what I think is going on and I'll show

you what my predictions were going into

this we'll check those uh but

first in honor of being right on a 50

basis point cut I told my team we would

not do this unless I was right on 50

basis points we went from having no

coupon to having a Fed 50 coupon so an

honor have being of being right for

being basically one of the few to

suggest 50 basis points nine out of 115

Bloomberg economists thought we were

going to get a 50 basis point cut we got

a 50 a lot of people were like you're

crazy thinking 25 anyway let thinking 20

I was thinking 50 people thought it was

crazy for thinking 50 we got 50 and so

we did a flash sale it'll expire

tomorrow at lunchtime it's kind of weird

time for it to expire but 24 hours

basically uh fed 50 go to meetkevin.com

you get lifetime access for life to all

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get that lifetime access so consider

that by going to meetkevin.com but uh

let's compare some of the other things

that were said first of all uh we have

the following my predictions going into

this were that we were going to get a 50

basis point cut we got that we got we

are not currently in recession we got

that and of course the FED wants to be

vigilant and that rates are sufficiently

restrictive we got that the Federal

Reserve did project a higher terminal

rate than I expected 4.4 I was looking

for four and profit taking ensues we'll

have to really see how things move over

the next couple days to see how profit

taking ensues so far it seems like there

was some profit taking but we're trying

to get back to that 476 line on the

NASDAQ 100 so we'll see where that goes

now something I want to point out to you

is over here on the fomc statement look

at this right here they projected a

4.4 at the end of the year which is a

substantially greater set of rate Cuts

than what we had uh in the last fomc

projection if we jump to that last

projection you could see that I wrote

here if we get less than a 46 we're

going to get a 50 and that's exactly

what we got here we got a 50 basis point

cut because I think the Federal Reserve

is starting to recognize there is

weakening but we don't want to panic

anybody so we're going to have a hawkish

conference right we go 50 have a hawkish

conference the economy is fine no

recession everything's F he literally

said the economy is fine those were

quoted I saw it even pop up on terminals

people like Powell colon US economy is

fine and it kind of just reminds me of

like that cartoon meme where you know

the guy sitting there with the coffee

everything is fine and everything is on

fire right behind him consider for a

moment why they ended up cutting 50 they

not only used the incoming payrolls data

and suggested that maybe had they had

the data earlier they would have

actually cut 25 in July but they also

said they're starting to see anecdotal

warnings in the beige book of weakening

in the various different bank sectors

throughout the United States that is fed

member Bank sectors uh and that's why

they cut 50 they're trying to they don't

they don't think they're behind they

don't want to fall behind but they also

acknowledge that they're not in a rush

to get this done that they're going to

remain data dependent this is not

surprising but listen to this all 19

members at the Federal Reserve who were

part of this decision uh you know 12 of

them vote but 19 are part of it all of

them part of the summary of economic

projections 19 all 19 wrote down

multiple rate cuts for this year just in

the last summary of economic projections

very few were cutting writing in

multiple in fact there was a talk that

we would only end up getting one rate

cut this year 17 officials wrote down

three or more cuts 10 out of 19 so more

than half wrote down four or more Cuts

drum Powell says the economy is in good

shape and the labor market is in a solid

position he does actually compare the

labor market I was worried they were

going to do this as a way of being

hawkish and they did we warned about

this in the days before and they pulled

it out of the bag I was worried they

were going to say well you know

historically 4.2% unemployment is really

low that's bad you don't want power

comparing going oh well 4.2 is

historically low because it potentially

means they're willing to be a little bit

more Cavalier with that jobs Market

because it seems like it's in a good

place but once the economy starts

slowing it's an inertial movement that's

hard to stop this is why Powell was

asked hey usually when the unemployment

rate goes up 1% It proceeds to go on yet

another one to2 percentage points after

that isn't that bad and Powell says well

that's why we're going 50 to try to stop

it now so he recognizes the trend is

down on unemployment they're trying to

stop it with 50 but in the same

conference he also said well you know

we're not political because after all

there's a lag in you know how long it

takes for rate cuts to hit the economy

Okay cool so the federal uh you know

unemployment rate is at a level where

you want it now but your rate cuts are

going to lag to help the unemployment

rate so in other words the unemployment

rate might actually weaken further might

rise further before before your rate

Cuts even take effect Drome Powell

basically declares uh uh Victory by

suggesting that our patience has paid

dividend has paid dividends the base

case is getting to a more neutral level

they right now pricing and rate cuts of

about 200 basis points would take us to

about

3.25% uh into the um the end of 2025

through this easing cycle that is a

little bit less than what markets were

anticipating so you are getting a little

bit of a takeprofit and some stocks and

you're getting a little bit of a

takeprofit in some bonds but it's

probably not going to take a lot of

thinking or data to indicate that the

economy is still slowing and all of a

sudden you'll actually see rates move

slower it's my estimate or my guess now

if we actually look at the world

interest rate probability move after

this I can tell you that right now

markets are actually pricing in a 35%

chance of a 50 basis point cut in

November so look at that we're already

moving moving to that forward data

something else to pay attention to are

the next data sets which Jerome Powell

pointed out as well October 4th we're

going to get a jobs report Mark that on

your calendar October 4th jobs report

October 10th we'll get a CPI report I'll

cover all of these live November 1st

we'll get a jobs report November 13th

we'll get a CPI report which is after

the election after November 13th I

personally expect a lot of volatility

between now and the election because now

as as we suspected the Federal Reserve

doesn't actually provide really clear

Clarity and instead now all of a sudden

you're basically declaring Victory on

inflation but you think your lagging

rate cut is going to help the labor

market it's going to make us more data

dependent so what are we going to look

at Q3 earnings in October and the jobs

and CPI reports that uncertainty could

increase the risk of more profit taking

as far as housing Jerome Powell says

that housing inflation has been dragging

a bit based on the owner's equivalent

rent sector this is something we

expected as well but as long as Market

rents remain in control the outcome is

not in doubt basically he's saying look

Market rents are essentially flat we've

looked at this as well housing rents are

lagging indicator as part of CPI and

that's one of the last parts that's hot

so he's basically declaring Victory on

inflation here and he does argue that as

rates normalize more people will sell

and that'll normalize the housing market

this is an argument that I had as well I

haven't been saying that I think housing

markets are going to Skyrocket just

because rates come down mostly because I

think inventory will come up on that and

we've already seen mortgage rates come

down quite a bit here so you really have

to watch the 10-year treasury to see if

mortgage rates are going to come down

even more after this cut uh so far

yields are actually slightly up yields

are slightly up at the moment probably

for a few reasons number one profit

taking very very high likelihood just

because we had such a good run going

into the FED meeting for bonds but the

second thing is they did mention that

they have no intentions right now of a

slowing QT quantitative tightening uh so

that could be another reason as well uh

worth noting that gold went from being

up one and about uh 2% 1.2 percentage to

about down 3 point or 37% so you've had

a little bit of of an unwind there of

some of maybe the recessionary fears and

this was part of sort of my bingo card

which I didn't get Bingo again but we

had a you know it seems like I'm always

off by like one on the bingo card uh

I'll show you the bingo card really

quick if you want to see what I got but

on the bingo card I did mention that

ending QT talk comes up uh I got you

know Mark on that uh he's hawkish And

discussing in his discussion by

suggesting the economy is strong now we

got that yep uh we got Ken cut more if

data deteriorates further yep pow was on

time purple tie Nick T sat next to the

Blondie meeting by meeting no decision

yet on November risk to the downside in

labor don't consider politics owners

equivalent rent lags but Market rents

are good we wrote that down we didn't

get anything on a self-sustaining labor

market although he was roughly asked

that he used the laptop instead of paper

he didn't say we're still sufficiently

restrictive though that was implied

implied that November could be zero but

we're pricing in a 33% chance of 50 and

pretty much a certainty of 25 mostly

because of the summary of economic

projections Sam rule didn't come up

little typo there uh uh you know data

dependent is sort of by default

something they always mention uh I'm

sure that was said but it wouldn't make

a difference to my bingo card anyway

okay uh then what else we have uh so

let's see here I just want to make sure

I got all my notes covered because

there's a lot here so we got the 50

which was great uh we got job gains have

slowed that was the change in the

statement strength in the labor market

can be maintained and the economy can

continue to grow with modest growth so

they're basically trying to draw this

picture of a soft Landing which is hey

like things are

softening but uh you know we could

probably keep going with this this

softer pace and be okay absal recession

again I think they have to say that

because frankly if you say you're going

to go into recession they will induce a

recession

immediately uh let's see generally

expect GDP to remain solid notable step

down in the labor market labor market is

not a source of elevated inflation our

patient approach has paid dividends

basically again declaring Victory on

their approach here econom is in good

shape this is that that hawkish talk of

basically like everything's okay this is

fine watching the labor market further

though we don't need any further labor

market weakening he

reiterates and the economy is basically

fine again I think of that Meme and then

again refuses to acknowledge that maybe

the odds of a downturn or recession have

increased again I dispute that I agree

with that but that's that's the cool

thing about markets is that everybody

can have their own opinions what matters

right now is that we got 50 that

actually does reduce the odds of a

recession but it's lagging the question

now is has the FED waited too long at

this point and quite frankly volatility

in markets and data over the next

probably four to 5 months maybe 6 months

will really let us know are we going

stick a soft Landing here or are we

going to go for a hard Landing too early

to tell right now either way whatever

happens make sure that you're a member

over at meetkevin.com join me at

meetkevin.com shout out to those of you

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trade uh trades on fed 50 uh thank you

so much for joining Chad G

gesson Heron D her Donley we Wesley

Joshua Timothy thanks so much for

joining here appreciate all appreciate

all of you for the support remember you

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in the course member live streams to see

those analyses let me know what you

think were you expecting a 50 only nine

out out of 115 economists that uh

surveyed by Bloomberg we're expecting a

50 nailed the 50 bet now the question is

what are markets going to do they're

pretty stable right now uh and so the

question is what happens over the next

few days what do we price in for that

November meeting and what do we have to

look forward to for the rest of this

week not much not a lot of data at all

this week we don't really get pmis until

next week we'll get initial jobless

claims tomorrow but who cares and um

that's all I got so go to me kevin.com

use that F50 coupon code if you want

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risking my life putting radios in my

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our own anyway only radio Geeks probably

care about that I care about that I

think it's really cool anyway thank you

so much seriously uh for being here

folks uh I love all of yall uh I'll keep

bringing information to y'all let's see

what happens in markets The Q's did just

turn red again I personally think the

level of uncertainty increase that we're

going to get between now and frankly uh

uh you know the the election is going to

be massive I mean think about it you

just got the best news you could have

you just got the 50 okay so you got good

news for the markets now everybody's

like cool I'm going to take profits and

and now you go into a low liquidity time

with Q3 earnings coming up two jobs

reports coming up before the election

two jobs reports before the election the

election log liquidity as we go into

earnings stock buyback

blackouts and people that are kind of

like I don't know was the fed too late

are they seeing something we're not

seeing it I mean read the FED beige book

The Fed beige book freaked them out and

made them go for a 50 BP cut here fed

beige book was uh you know what was it 9

out of 12 districts we're we're seeing

signs of weakening that's anecdotal

right those are leading indicators so uh

I don't think it's all Gucci out there I

think the FED is doing the right thing

by going 50 so I probably on the bull

bear scale bare bull scale for those of

you wondering I said that 50 would be

more bullish I did kind of anticipate 50

uh so I went to three and a half on the

bare bull scale I'm probably at like

3.6 right now

but it's it's not it's not where I'm

like so excited about where valuations

are in markets and where I am but yeah I

mean like do I smidge up a little bit

because of this on the bare bull scale

fine but uh you know 36 is certainly not

making me want to run into stocks going

uh going like uber bullish all in on

margin right now you know uh that

recession risk is still very very

present and I think it becomes

substantially more evident and prominent

over really the next four months here

ESP especially January like a January

layoff period if you get a bad October

January

layoffs could be bad so uh you know

those are just little things to watch

for uh so on beable scale 3.6 so that's

my take anyway uh if you don't already

know by the way you could uh watch uh

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and uh good luck everybody I I really do

appreciate all your support I couldn't

be here without you and uh all I can

promise is that every single day I'm

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hard for you even if I f up so

appreciate yall thanks folks goodbye why

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