WARNING: prepare for **THIS** Fed Rug pull

but now we've had a look at the sep and

there could potentially be some concerns

coming from it so let's get pull up the

step while I pull up the sap thank you

so much of Corey for shouting out your

daily content helped me land a sales and

trading analyst position for Wells Fargo

as a sophomore here since March of 2020.

wow that's really impressive thank you

so much uh and congratulations to you uh

and remember hey you can always join

those courses linked down below if

anybody else is interested in even more

Deep dive perspectives but let's go

ahead and jump into this summary of

economic projections and let's see what

we have here now this is the last

summary of economic projections that we

got this is from March 2022 and what I'd

like to do is Mark up what are likely

going to be the biggest numbers and so

the first one we're going to start with

by far that I think everybody cares

about the most from the FED is this item

right here that fed funds rate where

does the Federal Reserve think the fed

funds rate will be for 2023 4 and 5. I

actually think the FED has this

potential of doing some massive

signaling right here for the end of 2023

and the reason for that is simple at the

end of 2023 the bond market still

believes there's a chance the Federal

Reserve is going to cut that is if they

raise in July the bond market is

projecting the FED is going to drop back

to five percent in December in fact when

you look at World interest rate

probabilities you see an increase going

into July and a decline going into

December the FED could absolutely

destroy that by simply revising this

number higher my guess is If the Fed

wanted to really price in the potential

of another height you have to consider

the following

right now Fed rate policy sits somewhere

between five to five point two five it's

sort of a market determined floating

rate and when you consider a rate

increase you would need this number to

rise slightly above uh 5.25 my guess is

that this number and even though it's

just sort of an average or median it's

supposed to be a middle indicator of

what the FED is thinking I I kind of

think they somewhat collude on these

numbers a little bit no guarantees

Jerome Powell says they don't but uh

then again I don't necessarily believe

that but that's okay it's okay to to not

believe them for a moment but anyway so

if we consider this what do we end up

having as a Fed potential well I think

the FED ends up saying

5.3 as a reality here now what's neat

about that is you're actually 10 basis

points above the low end right now but

how many basis points

are you actually above

if you go to 5.3 well you're actually

only about five basis points above the

low end if you go with

5.3 because the low end would be 5.25 on

another rate hike however it does signal

some slight opening to that potential to

another eight height if this number does

not move up to 5.3 the FED is telling

you yeah we're probably not going to

hike so you kind of have to see this

number go to 5.3 otherwise I think

everybody's going to call the feds Bluff

and if the number goes down it means

you're signaling price Cuts stocks are

going to Moon even more than they

already have it'd be ridiculous I think

this has to go to 5.3 now any number

above 5.3 in my opinion is extremely

hawkish because if we start going to the

neighborhood of five five let's say so

five I'll put 5.3 would kind of be like

okay we kind of anticipated that but if

we end up going with a number like 5.5 I

would probably call that a sad face and

five four somewhere in between right

it's from like neutral to slightly

negative uh but I think this number

matters the most

followed by probably their projection

for next year although they've been

wrong about their projections and too

low about their projections

consistently and historically so I I

don't know that the forward projection

matters too terribly much uh I would

probably consider maybe leaving at 4.3

the end of next year number and staying

something with a slight elevated tune uh

to the uh the number over here on the

2023 figure so I think this number

matters a lot I actually believe the

Federal Reserve is going to signal to us

that hey we don't have to cause as much

unemployment as we previously thought

I believe the fed's probably going to go

with a 4.1 revision right here so we're

going to go from 4.5 to about 4.1 and we

might see this uh this future terminal

uh number come down as well this might

end up being like a 4.3 so I think

you'll see a softness in the

unemployment rate here in terms of GDP

you'll probably see a revision up as

markets punt the GDP uh or a recession

into next year uh and I wouldn't be

surprised the others some would stay

stable but I wouldn't be shocked to see

a pump up over here I don't think you'll

see a pump down if you see a so if I had

to prioritize these and I was going to

give sort of a ranking as to which to

pay attention to

um

well we'll label them but I would

certainly start with the FED funds rate

that's absolutely where I would start uh

their inflation projection is going to

matter but in my opinion not as much

before I break down though the exact

ranking I just want to give you a quick

breakdown on the following this is a

change that we're making what we're

actually doing is we're going with a

four phase of price increasing here

because we're getting a lot of emails

that staff at me Kevin for the courses

and people saying hey you know I just

you know I'm waiting until this state to

join or whatever so we just wanted to be

really transparent with what's happening

in the courses so you can see that on

screen now and then I don't have to talk

about it that much but basically we're

having four phases of price increases

for each course and then after those

four phases which would mean the base

prices are going to be about two to

three hundred dollars higher each of

these courses is getting a very large

new uh lecture set of releases all three

of these courses right here and so it'll

be a pretty big deal so at least we're

pretty excited about so anyway I put it

on screen so I can talk about it less

long just out of respect for everybody

it keeps it a little shorter uh while at

the same time putting that information

out there for those who want it so I

think that's a little easier but let's

label this in numbers here so top

priority I think is this fed funds rate

uh that's number one without a doubt

again if they don't go to five three

they're signaling that they're bluffing

about potentially raising rates in the

future so I don't think they can do that

markets have reacted very negatively to

a downward Revision in GDP before so

it's possible that you could get a

neutral response from markets if you get

like a 5'3 on the future fed funds rate

and maybe something uh like a 0.6 a

slight revision up in GDP that could be

good markets like this

so I'm going to put a mark over here the

markets really seem to care about this

what markets actually surprisingly don't

seem to care about that much is actually

I know it sounds crazy but rates

the interest rate expectations for the

FED have really fallen and if we look at

the world interest rate probability

today oh and when I say Fallen I mean

they've shifted to a point where the

Market's not pricing in as many Cuts

anymore in fact it's gotten pretty steep

the Market's almost already completely

priced out rate Cuts this year I'll show

this to you in a chart which is quite

remarkable but what's really the insane

part is that you have a Fed

that's made it clear they don't want to

cut this here markets transitioned from

okay we're pricing in rate cuts to okay

never mind we have to wait for rate Cuts

next year and the Market's gone up

so while the Market's gone up you've

actually seen uh this this uh um uh

reduction in uh interest rate cut

expectations let's look at this a little

more closely so if I draw an arrow on

this world interest rate probability

chart

what I want you to see is that right now

we're actually sitting here let's draw a

line in it right now we are sitting cut

that out there we go we're sitting right

about here right now uh and you can see

that markets are really pricing in at

this extra hike over here somewhere

between July and September now now I

think that's actually quite interesting

because previously we were not pricing

in a peak here in September instead you

were pricing in a peak in July and so

you've actually delayed that Peak to

your September meeting

and your potential for a first cut

between November and December and then

your larger cut where you're actually

getting below five percent is being

priced in for January

all of this is a massive shift from

where we were during the banking crisis

consider for a moment where we were

three months ago today and honestly I

think it's a little weird that it's

already been three months since the

banking crisis I don't know what

happened but time seems to be going very

very quickly this year and it kind of

feels weird

but let me show you I'll share screen

here so let's see here uh present the

other screen just takes me a second to

pull up the other window

oh and then I'll have that up for us

there we go all right uh not that one

let's go with this one here we go so

take a look at this this is the world

interest rate probability chart from

March and look at this March had a peak

priced in for May and the peak was

actually below five percent you had

about a 4.95 peak priced in for May

folks we're already above that and look

at where the cuts were priced in you

were the market was pricing in Cuts as

soon as September and then multiple Cuts

you were looking at somewhere around

1.75 basis points of or sorry 170 basis

points of cuts 1.7 percent of cuts by

January this is insane I mean the fact

that we went from this crazy amount of

cuts

to quite literally no Cuts this year a

terminal rate now either in July or in

uh a terminal rate in September and the

Market's gone basically straight up over

that time frame folks it's nuts and it

really actually goes to show you that

markets right now don't really care

about uh this terminal interest rate or

the higher for longer regime I think

markets are are realizing inflation is

gone we're not expecting a Paul volcker

sure things might stay higher for longer

but we're almost okay with that look at

the NASDAQ look at where we sat on March

14th right here right here on in the

middle of this chart is where we were

pricing in 170 basis points of cuts by

the end of the year now we're pricing in

no cuts by the end of the year and for

pricing in that we still don't have a

terminal fed funds rate and where's the

market oh don't mind us it's only 20

percent higher than where it was over

here look at that we were at about 300

on the queues here and now we're sitting

at 363. that's over 20 percent higher

despite the fact that the market has

unpriced all of those Fed rate cuts that

were priced in for this year that's

insane by the way that uh website uh

there with the chart is Weeble if you

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continuing with with this chart here the

summary of economic projections a lot of

people refer to the Dot Plot and and the

Dot Plot is actually something that you

could see here what I like to do

although I I you know it's it's somewhat

difficult uh to get appropriate because

you're taking into account you know 16

to 18 different people's perspectives

but what I like to do is is somewhat

predict where I think most of the dots

are going to go for this particular

meeting and so what I'm going to do is

I'm going to look for the 5.3 number

which is going to actually sit about

where those three dots are 5.3 5.35 even

but unfortunately 5.35 will round to

5.34 but anyway I would expect you're

going to see a shift up of the majority

of these dots to right here uh that

would be my guess is that most of fed

participants the FED participants well

price in about one maybe that one more

rate hike they can always adjust down

but remember this is a signaling tool

they are not committing to what is on

this chart it is solely a signaling tool

and if they want to prevent inflation

expectations from running away they

probably want to signal either being

roughly here with the majority of these

dots or they'll want to bulk up a little

bit here to maybe even signal one or two

more hikes something like this is what I

would expect for the Dot Plot I do not

think we'll see anyone down here and I

even though there's a chance that you're

going to have somebody super high up

here I wouldn't be surprised if you

eliminate this top Edge so I think

you'll eliminate the edges and you'll

get some concentration amongst that five

two five to five four level that would

be consistent in my opinion with really

signaling hey or not necessarily done

now don't get me wrong I think the

Federal Reserve is going to be done

that's mostly because of history and

weak CPI uh so weak inflation weak wage

inflation those three things weak

inflation core inflation coming down

super core plummeting super core way

down I mean you're in you're the you

know under three percent range

annualized it's fantastic so super core

is way down uh wage pressures are

evaporating by the month I mean it's

incredible how wage pressures are

falling uh and then of course you have

history that says the FED should not

stop start stop start so all of those

three aspects uh those those three

things we just talked about were you

really really consider them and and then

pay attention to them right wages

CPI super core uh pretty important uh

and then uh obviously oh what was the

third one I just mentioned I don't know

why it escaped me but anyway uh the the

three things that we just mentioned

wages CPI super core uh it wasn't

inflation expectations we already went

through that uh I can't remember whether

somebody write in the comments please

what the third one was but I wanted I

just wanted to outline my life I need

more coffees what it is but anyway the

the history of course that's so stupid

the historical aspect thank you uh so

history all of these three things right

here are really going to destroy the

ability for the FED to actually raise so

here's what I really want you to take

away from this segment

what I want you to take away from this

segment is this word that everybody

loves on YouTube uh and I actually think

the FED is going to pull this off on us

I could be wrong and it depends what the

next CPI is going to do but you ready

for this I think the fed's going to pull

off a click bait over here I think the

FED is going to try to Signal click bait

in saying we're going to be more

aggressive so they're going to signal

clickbait but these three things are

going to eliminate that possibility of

actually happening and they'll end up

staying paused again for July and what

we'll do is we'll just keep kicking the

can down the road of these expectations

of what the FED is going to do that's my

thesis and I'm sticking to it unless of

course the data changes you know then

we'll flip flop but right now the data

does not say that another hike is

necessary my take now we'll see but

again you know take a look at uh those

uh those courses on building your wealth

link down below get lifetime access to

them remember we've got four phases of

price increases the first price increase

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remember you could always email us for

bundle code or questions at staff meet

kevin.com we'll be more than happy to

take care of you but otherwise that

gives you my thesis on what's going on

with the FED over here and uh we'll see

what happens today but we'll be looking

we'll be comparing this to what we

actually get from the Federal Reserve

today