What Jerome Powell JUST Said [FED FOMC].

hey everyone me kevin here boy oh boy

here's exactly what just happened with

the federal reserve first off they gave

us the 75 basis point hike which had a

79 chance a likelihood of happening and

that's what ended up happening jerome

powell talked about starting to

significantly reduce the balance sheet

and quote we will be looking for

compelling evidence that inflation is

coming down this is the second 75 basis

point hike that we have we have had

considered to be unusually large and

jerome powell says that quote while

another unusually large hike could be

appropriate at our next meeting that

decision decision is dependent on the

data that we get in other words remember

folks it is currently july they are off

in august other than going on the tv to

blob about blah blah blah blah keeping

inflation expectations low but they do

not have another fomc meeting until

september

in september we will probably we should

have two cpi opportunities in fact we'll

be able to verify that right now by

looking at the fomc calendar and then

the cpi calendar we will probably have

two cpi reports before the september

meeting which is september 20th to the

21st which means we will next be meeting

on one of these fomc

reports and news conferences on

september 21st to mark your calendar for

that we have two cpi reports coming out

august 10th that's lauren's birthday

wish or a happy birthday on august 10th

that'll be the july cpi inflation report

and on september 13th which is before

september 21st

which comes which represents the august

data set so we have two cpi reports to

go

before the next federal reserve a

meeting and the federal reserve chose to

only hike by 75 basis points as a result

the 10-year went plummeting down to

2.765 percent break-evens fell even more

consistent with the idea that the bond

market is correct that inflation

expectations are consumed consumer

expectations of inflation are plummeting

because inflation will likely be coming

down in the next two to three months

which hopefully in the next cpi reports

the next two we will see that so that

way we could get a soft raise from the

federal reserve in the september

november december meeting

now the federal reserve was extremely

clear in multiple instances to argue

that the sep from july or i'm sorry from

june was still valid now it is very

important to note this is a very di big

divergence from what we have previously

heard from the fed when the fed had

their meeting in january they said man

if we could go back to our december

notes we would change all of that in

other words they thought they were wrong

they said the same thing when they came

out with the june notes boy oh boy the

march notes were so wrong because

remember the summary of economic

projections only comes out on average

every other federal reserve meeting so

we did not get a new

summary of economic projections or scp

instead jay powell reaffirmed this scp

rather than giving us some vague oh yeah

it would be worse this time he didn't

say that he actually softened his

statement by saying that

what we said in june is pretty much

accurate which means that the fed

expects to get the rate or fed funds

rate to about 3.4 to 3.5 percent by the

end of the year which implies we have

one to one and a quarter percent to go

one two one and a quarter percent to go

could literally be a point seventy five

a point two five and a point two five or

more likely if we get any kind of

softness in the data something like a

0.5

which would bring us to

2.75 0.25 which would bring us to a 3.2

uh sorry bring us to a three-point even

and then a 3.25 on the next 0.25 basis

point high so really we don't really

need these 75 bp hikes anymore i believe

that by jerome powell reaffirming and

revalidating this scp he has basically

taken 100 and 125 or any form of rug

pull and said no chance baby no chance

the only chance you got is that you got

the best chance right now to get the

best deal on cameron's programs on

building your wealth which have a coupon

code expiring on july 28th because then

the price goes up as we add more value

and more content but folks this scp

really really really really important

and it is the first time jerome powell

has actually reaffirmed one of these

scps in a very very long period of time

in addition to that jerome powell also

changed the first line of the statement

usually the first line of the statement

suggests that hey following a brief

decline in the first quarter we've seen

a meaningful progress of economic

conditions but instead what did we get

this time folks we got the following as

a very first freaking sentence

which if you are a youtuber you will

appreciate the following statement right

here at the first sentence you have 99

retention

right here or about uh you know almost

halfway through you have about 45

retention and over here you've got about

23 retention

okay so jay powell and the crew they

know that they're most likely to have

most people read the first sentence

which is recent indicators of spending

in production have softened which is

basically the fed saying hey what we're

doing is working hey but in the meantime

we still have the jolts indicator that's

pretty damn strong which suggests that

there are 1.9 job openings for every

single unemployed person and hey keep in

mind that as long as we average 2 over

the long term via flexible average

inflation targeting also known as fate

we're gucci so it's okay if we had a

little bit of high inflation as long as

we can end up averaging two percent over

the long run but folks we had some

really big bangers today like some juicy

bangers today in addition to the first

statement changing this was probably one

of my favorite statements right here

although there's some more juicy ones

folks jerome powell said the following

about getting to neutral he said getting

to neutral is important i think we've

done that now 2.25

is where we are now and he believes that

is roughly the neutral rate now jerome

powell does believe it is appropriate to

go slightly above neutral to tighten

monetary and financial conditions

appropriately

however he believes we are presently at

neutral which neutral is where we expect

to go back to after these rate hikes

complete and inflation ends up proving

to be transitory okay you can watch the

full live stream that i did at the

beginning the first 20 minutes or so

when i talked about transitory inflation

if you want to dispute that but anyway

jerome bowell did do something that

bothered me a little bit again but he's

been kind of uh you know he's kind of

been pretty typically doing this lately

at the beginning of the year he's like

oh yeah we look at core cpi don't worry

we don't look at anything other than

core

then in the last meeting in june so this

was like in january okay then in june

he's like oh no no we look at headline

we just look at all cpi

and now here in july he's like well

actually we look at both

so if you're trying to figure out what

the hell he's looking at regarding

inflation he don't even know okay he he

don't even know the answer and that's

fine

that's fine as long as it all goes down

we're good now he was drilled multiple

times about his definition of recession

and every time he was asked he says we

think it's necessary for growth to slow

down we think we're coming off high

growth that we had during the reopening

year of 2021 and that you are seeing

tighter monetary conditions which could

have a lagging effect on the economy

especially with softening labor numbers

coming in but jerome powell as expected

completely blew off the definition of

inflation and completely ignored the

question of biden's re-defining of a

recession he says that he's not trying

to receive a uh uh you know trying to

put us on the path of a recession and

that he's really not going to comment

about whether or not we're in a

recession or not because while he'll

look at the data he doesn't really care

okay fine whatever he does believe

however that acting too slowly is a

danger because if he acts too slowly

then inflation could become entrenched

fortunately he does say though that

inflation does not seem to be coming

entrenched because break even rates are

coming down this is a very very critical

argument that i have previously made

many many many many times this year

and was actually one of the reasons that

i sold in january because these

break-even yields were skyrocketing but

generally break-even yields as shown on

screen now generally break even yields

precede inflation coming down they also

generally go up before inflation goes up

so break-even yields are a really good

indicator because the market is telling

you what they expect that cpi will be

and right now the expectation is that

that is going to plummet at this last

reading when i took this screenshot it

was sitting at about 2.6

now that doesn't necessarily have to

align exactly with cpi it's really the

direction that you're looking at and the

fact of the matter is the direction is

the lowest we have seen in literally the

last 12 months that means the market has

had

lower

inflation expectations at no point in

the last 12 months put another way at

every other point during the last 12

months we have had expectations that

inflation would be worse rather than

better uh and so this is good we're in a

very good position right now

now he does again say regarding the

hiking pace that we're going to watch

the data for september that we do think

that demand is moderating this is good

this is him saying that hey if demand is

moderating our work is working so he's

telling us that the economy is

softening

he's telling us that demand is

moderating he's telling us that he's

going to wait for the data and he's

telling us that he believes that there

are lagging effects of monetary policy

i don't know about you but i don't think

he could be any more freaking clear that

we're probably not going to get anything

more than a 50 basis point hike in

september unless of course there's some

kind of crazy data that comes out so why

are we seeing a rally in the nasdaq in

tech right now because nasda the nasdaq

and tech probably bottomed last month

and if you've been sitting on cash i

don't know if there could be any better

of a sign to go by although then again

i've said that before and things have

gone lower so no guarantees i am your

financial advisor and i ain't

responsible for you losing money just

like i'm not responsible for you making

money although if you want to send me a

10 commission of any money that you do

make in the market any market it is i'll

take it but let me put it this way

nobody ever does okay so continuing on

regarding qt he actually thinks markets

are fully accepting of quantitative

tightening which is very interesting

because the more we tighten the more

demand the federal or i should say the

more supply

the market uh puts on or the fed puts on

the bond market which means yields go up

and we're actually seeing yields kind of

soften we're seeing break-evens come

down and

drone powell gave us zero mention of the

forward three-month treasury and nobody

asked about it which was really kind of

shocking regarding unemployment jerome

powell almost verbatim copied my video

this morning about inflationary

pressures coming down if job openings

come down and he goes on to suggest that

if the pandemic caused the labor market

to move up then you should see it come

down soon which means we don't actually

necessarily have to run pull markets to

see it come down because in time it will

come down because it was the temporary

effect of the pandemic propping it up he

does see that potentially lower wages

suffer the most during inflationary

times although this morning we also made

a video suggesting the data shows that

lower incomes are actually the ones

seeing the highest wage increases maybe

they're actually not having the biggest

burdens in terms of needing to slow down

spending well yeah usually food and gas

prices and rents are most

felt by those in the bottom quartile of

incomes and ultimately i have to say if

i were bullish on anything at this point

it would be tech and honestly

potentially real estate sucks hate to

say it but it's true

anyway thank you so much odani for the

10 commission thank you so much hope to

see you when the program's on building

your wealth because we're going live in

the course member live stream right as i

end this thanks so much we'll see you in

the next one good luck everybody and

enjoy the attendees goodbye