CRITICAL Investor Video | Watch BEFORE Wednesday

oh hey everyone meet kevin here today

we've got to talk about the federal

reserve and well projections for what

the hell is about to happen on wednesday

and folks preview i don't think it's

going to be good that's because the

federal reserve has a few big problems

to solve and i'm not just talking about

inflation i'm talking about the

differences in what's known as the

summary of economic projections this

federal reserve meeting is going to be

different in that we actually get a

summary of economic projections which we

don't get in every single federal

reserve meeting the last time we had one

was in march and before that we had one

in december which means we missed

january and may for these these

particular meetings are especially

important because what they are is a

projection of the board members opinions

on where the unemployment rate will be

where the recession potentials will be

where inflation will be and a lot of

these things have changed since march so

let's talk about these things first

from march or in the uh the march

release the one that came out on march

16th the federal reserve uh blew us away

with their gdp projection the market was

expecting a three and a half percent gdp

read they actually came in with 2.8

percent that was a shock and we saw a

little bit of pain at the moment when

that scp report came out uh and so

what's fascinating here is

i don't think anybody thinks gdp is

going to be between 2.8 percent for 2022

and 2 and 2.2 percent for 2023

the reason is

we're thinking there might be a

recession

recession would mean the sap gdp should

show some form of gdp closer to zero and

if we go negative then we see a

recession now the cool thing about the

scp is we actually get a range of what

all the different folks on the federal

open market committee think for the

recession potential

last time the gdp range for 2022 was

anywhere between 2.1 to an optimistic

3.3

if now imagine this flips and the ranges

of gdp projection are like

2022 anywhere between 0.5 to 1.5 percent

huge revision down and then 2023

potentially the ranges are negative 0.4

to 1

the market's going to freak about that

gdp change in direction really big

problem now there's a second problem

here though and we got to get to talking

about inflation and unemployment and the

fed funds terminal rate but here's the

thing that you really got to think about

okay

and folks it has to do with the fed's

credibility this is so freaking critical

because back in the 70s and this is what

was different in the 70s was that

inflation was high for six to 10 years

it was over five percent for six to ten

years and the fed's like don't worry we

may have left the gold standard but

don't worry uh the inflation's

transitory don't worry we'll get it down

with just nominally higher federal funds

rates well what ended up having to

happen we ended up having to get paul

volkered that's because the fed lost so

much credibility nobody actually thought

inflation was going to go down when

people don't believe that inflation is

going to go down they demand more pay

and they buy more stuff now which

actually self-fulfills more inflation

that's bad the fed has to have

credibility which they do to some degree

today but they're losing it you compare

the fed to the rest of the world the

united states dollar is the strongest

it's rising substantially over the past

few weeks especially if you compare it

against like the japanese yen failed

monetary policy experience what happens

the dollar gets stronger which is

actually bad for earnings at u.s

companies that are trying to sell to

companies or people abroad because it's

more expensive for them to buy products

you know somewhere around

52 percent of buyers of tesla's are

foreign that makes teslas more expensive

right which potentially reduces demand

but anyway point is when we talk about

the fed they have to maintain

credibility and unfortunately because of

their spat with transitory inflation

they don't appear to have very much

credibility left right now and so that's

why my opinion this next scp report is

really really really really really

critical see if we end up having the

federal reserve give us an sep report

that's sort of like oh hey guys all

right um yeah uh we think gdp is going

to go down from 2.8 percent of the end

of the year we actually project now that

it's going to be like 2.4 percent well

everybody's just going to roll their

eyes at the fed and then we'll have even

less faith in the fed and i think the

fed realizes that i think the fed's

going to realize that okay what we have

to do this time is we actually have to

make sure that we give a summary of

economic projections that's reasonable

if we have an inverted yield curve which

is just inverted again today the 10-2

treasury yield curve then we probably

actually need to be honest with people

for once and project a proper gdp

forecast because otherwise we won't have

any freaking credibility left at the

same time they're obviously going to

warm us up to the idea of what the

market's already starting to price in

which is a higher terminal fed funds

rate and they need to do this again to

maintain credibility if they come up and

they're like oh we're just going to go

for 250s and then we're going to go for

25s again nobody's going to think

they're credible so they have to give us

bad news in order to maintain their own

freaking credibility they have to tell

us we're going to go for what the

market's saying potentially 175 bp hike

whether that's in june or it's in july

followed by 50s 25s are gone 50 is the

new 25 and 75s are the new 50s because

we're not seeing that inflection down in

inflation they can't even pull the

narrative that they were polling in

march

or in may which is like oh there's some

measures that inflation has peaked and

it's trending down not after this last

report it's a complete freaking disaster

so

two big problems here okay and then we

gotta talk about these these uh other

things regarding uh inflation and

unemployment of that i'm gonna summarize

these two big problems right after i

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okay

so the two big problems

again number one they have to give us

bad news on the scp otherwise they lose

credibility and they have to give us bad

news on the raid forecast because

inflation just isn't transitory that

means all of a sudden this whole idea

again oh

yeah don't worry guys everything's

smooth sailing out dude don't mind a

hurricane out there don't mind you need

that all of that is just bull crap the

fed's got to give it to us straight for

once to maintain their credibility

because only if they are credible well

inflation expectations come down and see

this is a concern the last inflation

expectations that came out friday

came out in such a way that uh well i

should say they came out right before

the consumer sentiment survey came out

which was a complete disaster and

consumers inflation expectations

actually rose more substantially than

expected that's bad but wait a minute if

consumers expectations for inflation

shot up before inflation actually shot

up in this last terrible report that

means the next

outpouring or the next uh report on

consumer inflation expectations could be

even worse

unless the fed has substantial

credibility and again they can't be

credible if they keep telling us that oh

everything's fine they have to make us

feel like paul volcker's coming and

maybe he won't but this whole softest

landing thing they should kill that stop

saying we're going in for a soft landing

i wish joe biden would do this too they

need to wake up and go listen folks it's

not all good it's bad we have a problem

you need to start saving money and get

out of debt and you're going to have a

crap time if you're invested in real

estate or stocks and they got to be real

with us because if they would just be

freaking real with us then people would

actually trust them again that's why

this scp is going to be so important no

more softish landing because you know

what the softest landing is all

right now we said that we're good okay

we gotta now talk about the other

problems in the report because the other

problems in the report are also a big

problem

the unemployment report is going to be

bad in this projection i'm going to

explain that so here's what i mean with

the unemployment report being bad so

when we potentially flirt with a

recession you see companies go bankrupt

like revlon went bankrupt that was

terrible and when companies go bankrupt

people lose their jobs so we expect the

unemployment rate to go up but the fed

has only projected that the unemployment

rate would tick up by 2024. this is more

freaking fed and i'm tired

oh gosh

there's no ladder

not like a beached whale over

here okay look

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i'm gonna not be pacing on the deck

anyway uh so where were we oh the

unemployment so here's the thing in the

last scp

they bullshitted us again okay

they told us

they told us that

the unemployment rate would take up in

2024 first this is they're full

of crap

they've told us many times that they

need to in order to get inflation down

lower

lower inflation by raising rates and

that is going to lead to a tick up in

unemployment

especially if you have a recession or

depression right

they need to be real with that in the

next scp report the problem is if

they're real with us in that next scp

report people are going to freak out

again so you've got a lot of potential

freak out coming you've got the change

in real gdp that forecast is going to be

a disaster i think it's going to the

range is going to flirt with

recessionary numbers and

either look they're either real with us

and it flirts with recessionary numbers

and everybody freaks out or they lie to

us and everybody freaks out because

they're not credible and that's even

worse we need them to have credibility

which means we need to stop the

and wake up

the fed funds rate okay the terminal fed

funds rate

oh boy this one this one's a disaster

okay

so the last projection for the fed's fed

funds rate at the end of the year was

1.9

they told us the fed told us we need to

get above neutral neutral is when we're

not constrictive or accommodative we're

neither of those that's about expected

to be 2.5 though nobody actually knows

where the neutral rate is

fine

well in the last scp they told us they

would get to 1.9

now they're telling us oh well we think

we're going to go a little above neutral

which would imply a terminal rate of

somewhere between 2.75 to 3.25 percent

you don't even want to know what traders

are pricing in right now

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money in income property investing in

real estate that doesn't mean that if

you're a homeowner you should freak out

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renovations but folks the terminal rate

that traders are now pricing in for the

fed's fed funds rate is four percent

that means on this next scp if the fed

wants any freaking credibility we gotta

drive i forgot if the fed wants any

credibility anymore any credibility

anything oh let me get my glasses over

here if the fed wants any credibility

they're going to have to update

the scp terminal rate and that is also

going to freak out the market so

the terminal funds rate for a terminal

rate for the end of the year again was

expected to be one point

gosh 1.9

my expectation is in this next report

from the fed

we're honestly probably going to get

something like

2.8 to 3.2 by the end of the year that's

also going to freak the market out so

look you're going to have low buying

volumes between now and the fed meeting

because people don't like uncertainty

people freak out over uncertainty and i

would expect low buying volumes between

now and the fed meeting

but when we get the fed meeting i also

think we're going to experience a

disaster we're going to be in a

situation where when we look at that scp

we're going to go holy crap this is the

fed trying to regain the people's trust

trying to regain the credit credibility

and look i'll tell you

as much as you might hate the fed right

now at least we have

like

some regulation and a fed and

institutions that like try to solve

problems when they come up

which is what crypto unfortunately does

not have and that's why we started this

whole stable coin disaster which we've

been talking about potentially happening

since the end of 2020 on this channel

i've always said stable coins i don't

understand them i don't understand why i

mean i understand them but i don't

understand how they're not

multi-re-hypothecated with no regulation

and how that's okay and that

unfortunately is now affecting what's

actually a really good technology

blockchain technology i'm a big fan of

blockchain technology but i'm very

concerned

about the future for of an unregulated

environment uh you know and i don't want

to come across as like a fed shill i

think they effed up here i really think

they effed up

and that's why i think they're going to

have to regain credibility this is not

going to be like a paul volcker but it's

kind of like

this is like the pre-pulvering

anyway folks i wish you the best i

seriously do i'm always here for you and

uh

i'll keep you updated check out those

programs linked down below i'm gonna

head back and do a course member live

stream now and uh

look forward to talking to you all soon

thanks bye