I'm Disappointed in What Jerome Powell JUST Said [60 Minutes]

well Jerome Powell just had his 60

Minutes interview released and I have to

say I'm quite disappointed in Jerome

Powell in the FED mostly because I

didn't get the delicious juicy Finance

Intel that I generally want from Jerome

Powell Instead This 60 Minutes interview

which In fairness it's a prime time

broadcast 7:00 p.m. eastern time for

America on a Sunday night it's a staple

in many households and what did jome pow

basically tell households hey we realize

that egg are more expensive food's more

expensive groceries are more expensive

since before the

pandemic and they're probably not going

to come down

however those feelings the the

frustration about things being more

expensive is clouding people's Outlook

of an otherwise strong economy that's

very interesting because jome Powell

here is basically saying look the econom

is actually doing very well in fact his

quote was the economy is progressing

strongly solid we have a strong economy

the labor market is strong the economy

is strong and so now the goal is just

determining when do we reduce rates

carefully they also made it clear that

they don't really want to get back to

the zero lower bound that makes sense

because they generally want to keep

rates around 2% at the Fed so they have

room to cut to Zer is the zero interest

rate policy but when you get to an

effective lower bound known as the El be

effective lower bound 0% you really

don't know what happens in an economy if

you start pushing rates to negative so

Drome pal suggests want to get back to

about 2% on rates this is probably the

first time we've actually had him talk

about where they want to see rates end

up getting uh and that was my takeaway

was they they want about 2% of room in

there now what's fascinating and

obviously there's no indication how

quickly they'll get to that but what I

think is fascinating about that is uh it

really argues uh for or kind of going

back to where we were preco if you think

about it we had 2% rates before covid we

went to zero during covid but we were at

2 2 and a half% on the fomc rate before

covid and rates were at historic lows

preco you know we're three three and a

qu% mortgages now they fell obviously

even more another about half% into that

2.75 rate on a 30-year mortgage after

rates fell to Zero thanks to the covid

shock

but that's a tool of the FED rapidly cut

rates in a recession drum poell also

made it clear that we just shouldn't

expect deflation across the board yes

some prices might come down some will

come up we shouldn't expect broad-based

deflation unless we were in some kind of

negative economy or negative economic

time a lot of folks uh look forward to

the potential for deflation but it's

important to remember that if our

economy the way it's rigged up fac

deflation we would actually probably be

in a depression those are the times

we've really experienced extended times

of deflation the uh 188 sorry the 1918

1919 1920 era and then of course the

Great Depression and then maybe about a

quarter or so uh that is for 3 months in

a row in about 2009 that's when we've

experienced deflation otherwise it's

always inflation it's pretty much always

inflation because we just run the money

printer if we didn't on the money

printer we would have deflation things

would be cheaper the question is would

that be conducive with a growing economy

and that's of course where the austrians

and the keynesians will debate and fight

from an economic point of view but

that's beyond the scope of this video

what is interesting is we didn't get any

intel on uh this decline in the average

hours worked I I actually I didn't

realize this because I thought this was

filmed on Friday but this was filmed on

Thursday so if Jerome pal started

talking jobs in his Thursday interview

then it would just solidify that uh the

jobs report was leaked to him early

which we expect it was but you know he

doesn't want to make that so obvious uh

so anyway uh he does indicate as he

usually does the job's not done as far

as the banking crisis no major concern

he does argue that some banks with

higher exposure to toxic assets will

close or merge out of existence

interesting phrase he did also suggest

that bank runs can occur faster today we

saw that during the banking crisis

everybody gets on social freaks out and

people leave uh that is a way of

probably suggesting we need tighter

Capital requirements because anytime you

have a run boom buy uh we presently the

market is pricing in a 20% chance of

cuts in Marge Drome Powell did suggest

that we're not convinced that we're

going to be ready to cut by March

Market's still sitting at 20% we

probably have to

unpriceable catalysts that we have

coming up that are worth considering or

this week we're going to have uh S&P uh

services and composite indices coming

out tomorrow on the 5th along with ISM

prices paid at 7:00 a.m. we'll also get

a Services index employment index new

orders index I'd really like to cover

that live in the market open Live

tomorrow just so we can compare that to

the jobs report to see if they're

reiterating each other or if there's

some kind of uh disconnect between the

two we'll get consumer credit on the 7th

nothing on the 6th and then we'll get

initial jobless claims uh for the week

as well as wholesale inventories but

really we're not going to get much this

week other than revisions to CPI on the

9th uh and frankly what will be more

interesting will be next week when we

get to the 13th on the 13th we're

looking for CPI looking for 0.1 on the

month over month and three on the X food

and energy core uh month over month

figure with no estimate yet for the

year-over-year headline but

year-over-year core looking at 37 uh

something else that I thought was really

interesting about Jon Powell was his

suggestion that we don't actually need

data that's as good as it has been in

other words the data has almost been too

good like inflation falling so rapidly

on the six month that inflation you

could honestly get a report that's a

little worse and they would still

probably be comfortable with May Cuts

this I thought was fascinating that they

have nearly a fully unanimous group over

at the fed and they see so much

inflation in terms of well so much uh

inflation declines rate of inflation

declining so rapidly that uh they're

almost all on the same page that yeah

look even if numbers start coming in a

little bit warmer we've made enough

progress to where we can begin the

process of cutting I do think they're

probably just looking for uh the not

only the two reports that we have now

and this is sort of a hedge of his right

because if you have two more reports so

you get the uh January report and the

February report which come out in

February and March before the meeting

then they can update their guidance in

the summary of economic projection

the economic projections come out uh

with the Federal Reserve meeting the

fomc meeting on March 20th and then they

can sort of like see how the market

reacts to their projections and then

they can decide do they execute on those

projections or do they sort of adjust

their projections so March will really

be a messaging meeting May will probably

be our first cut meeting and then we'll

get another messaging meeting thereafter

uh in June I'll give you the

date uh meeting calendar of the uh June

meeting the voiceover from CBS did

indicate that uh rate Cuts would come in

the middle of the year which would align

with May to June maybe July right that's

sort of the middle of the Year range

there May 1st June 12th and July 31st

those are your next fomc press

conferences and the summary of economic

projections will be released March 20th

along with June 12th so this gives you

an update on what Jerome Powell just

said we'll have some more updates coming

out and I did post this summary on

ec.com as well so you're welcome to view

that there it's always free building an

app out for that uh that'll be built out

in conjunction with what we're working

on uh in terms of app uh work for house

hack which is very exciting we've got

some really cool things coming uh stay

tuned also for some house hack updates

there's a chance we uh might not do

anything other than just call for

warrants there's a chance so stay tuned

for that we might not do a fund raise

might just call for warrants don't need

the money so uh that'll be really

interesting I'll have I'll have a fuller

update on that within the next uh few

days probably we'll do some kind of

video on the house hack Channel maybe

the main chel I haven't figured it out

yet what we're going to do but um that's

something we've been uh we we've been

discussing and what's being uh sort of

what we're toward leaning towards right

now we want to get into phase two as

soon as possible on house Haack so it

gives you a little sidebar update there

anyway thank you so much for watching

appreciate youall so much and we'll see

you in the next one why not advertise

the these things that you told us here I

feel like nobody else knows about this

we'll we'll try a little advertising and

see how it goes congratulations man you

have done so much people love you people

look up to you Kevin paffrath there

financial analyst and YouTuber meet

Kevin always great to get your

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