Will the Fed CRASH the Market Tomorrow | Answer.

well folks it's no surprise about three

weeks ago I reported on this channel

that we were expecting massive

compression in software evaluations now

take a look at this I'm popping to live

CNBC downgrading software stocks

JPMorgan Cuts 13 names this is also

following the drama that we've seen

unfold with DocuSign there is a lot of

pain in the markets right now and we are

seeing substantial compression

especially in higher valuation companies

and a lot of this is coming because of

the pain we expect coming out of Jerome

Powell's mouth tomorrow in this video I

want to talk about my strategy in this

market my expectations for tomorrow

which I'm actually going to start with

my expectations for tomorrow what Jerome

Powell is going to do then we're going

to talk about my strategy for this

market and we'll talk about my thoughts

in terms of specifically what kind of

companies you should be paying attention

to going forward in 2022 I've already

given a lot of course members a preview

of a lot of these thoughts and so if you

ever want to get my thoughts at first

check out those beautiful programs

listed Down Below on building your

wealth you're going to make money or I

expect you to make money I guess I can't

guarantee it but I expect you to make

money either in saving money through the

Partnerships that we've got in the

program The Amazing live streams the

lectures on building your wealth whether

it's the real estate youtubing agent

stocks crypto you name it take a look at

that I'll link down below I think you'll

find something excellent for you all

right folks let's get started first drum

pal okay here's the thing Jerome Powell

I believe strongly expects that

inflation is still transitory now hold

the phone I know that's going to piss

off probably about 60 of people watching

this video he said he's dropping the

word transitory yes he said he's

dropping the word transitory but he only

did so after he was threatened to lose

his job and after he met with Joe Biden

multiple times

somehow right after he met with Joe

Biden multiple times and then he got

reappointed to the job of Fed chair and

then suggested he was going to basically

share some of the power with lail

Brainard and that he stood up on a

Podium with Biden Brainard and him it's

almost like there were three buddies all

of a sudden after that you know we've

got to accelerate the pace of the taper

you know we're gonna retire the word

transitory this comes after more than a

year of Jerome Powell being Crystal

freaking clear with his attention his

intentions his Crystal Clarity has been

such that a we would see inflation Peak

uh first a two points he's mentioned two

points we would see inflation Peak and

this is very very important because it

kind of happened the way he said I know

that sounds crazy but it's true he said

number one we would see inflation rise

and potentially pee when we compare to

the base of effects of the pandemic now

we need to understand that because

that's very very important the base

effects of the pandemic are right here

this is the chart of CPI inflation when

we had the pandemic we actually had a

brief period of deflation prices falling

when prices fell to this level over here

of about 255 as a measure of CPI it goes

up from 100 over time it's just a

charting measure don't worry so much

about the number then when we compared

to May the next year it felt like we

were comparing back into a hole we had

substantially higher inflation watch how

this works right before the pandemic we

had the CPI read at 2 58 right if we

measured from 258 to that next February

of 263 263 divided by 258 we have about

1.9 percent inflation okay but what we

actually had to do was measure from a

low of about 255 256 will round call 256

to May to May 250 a or 268 so 268

divided by that's the new number divided

by the old number of 256 there's that

4.68 percent see that's measuring into

the whole measuring into the hole this

is the first form of inflation that we

expected Jerome Powell told us it was

going to come he told us there was going

to be inflationary fear between March

and April of 2021 that fear started in

February of 2020 when Markets started

panicking tech stocks started selling

off remember this folks it's important

to in in my opinion highly worthwhile

looking back at tech stocks in February

of 2021 because it's going to show you

the relative drama okay so here's

February we hit highs boom Apple Falls

but look at where we are now on

companies like apple look at where we

are now on companies like Microsoft look

at where we stand now on companies like

Google we're higher than we were in

February now that's not to say that all

stocks are higher don't get me wrong a

lot of stocks especially certain

category stocks which we're going to

talk about in this video are a lot lower

than where we were in February but the

point was the first Catalyst for people

selling off stocks and again we're going

to get into the specifics in a moment

was the base effect uh comparison okay

we expected that to happen then

inflation we had the higher inflation

rates inflation rotated up we had higher

year-over-year projections in the summer

inflation slowed down you see this right

here the slope of the line has

decelerated that's an inflection point

right here when inflation slowed down in

the summer we expected inflation to no

longer become an issue bond yields fell

surprisingly crypto hit lows maybe

potentially even unsurprisingly in the

summer as inflation fears subsided

nobody was talking about inflation in

June July wasn't that big of a deal I

would do CPI report videos and nobody

cared about them in the summer

and then what happened folks

well two things number one

Jerome Powell told us the second place

that we're going to see inflation is

from when people go out and they start

spending money again like crazy

but coupled with people going out and

spending money again like crazy and

people not staying at home in quarantine

we got another punch in the face and

that was called Delta the Delta variant

shut down many factories in Asia and

substantially backed up our ports as

ports got shut down a lot of that is not

being caused by Omicron you've got

southeast Asia uh Asian countries and

companies and ports they're all like hey

bring it on we're ready for the next

wave of covid we ain't shutting down

again because what happened in the last

shutdowns was a complete and utter

disaster okay so we don't expect to see

the same sorts of shutdowns but we got

slapped with Delta Delta created more

inflation thanks to our supply chain

issues combining with people getting out

there and spending money like people are

way less worried about covid this winter

than they were last winter coveted

winter last year people were staying at

home covered winter this year people

like omicron's mild get out there and

spend your money which people still have

more money even though unemployment

benefits ran out in September we got the

child tax credit that basically started

around the same time to offset a lot of

what people missed out on those

unemployment benefits so stimulus money

is still flowing Federal Reserve is

still printing money it's kind of insane

that we're still doing that but put

these things together you've still got

stimulus money flowing the Federal

Reserve still printing money which is

just utterly insane

at the same time as Jerome Powell was

right about inflation being bad a during

the base effects B during the reopening

but then everything stayed more

persistent that is inflation lasted

longer why because of those darn Delta

supply chain aspects that really we

couldn't have predicted a Delta variant

right who knows we could have had the

Alma Burger I mean the Omicron uh before

the Delta variant and then hopefully

covid would have just disappeared by now

right which is what we're hoping with

Omicron anyway is that this more mild

cold-like uh version of covid is

ultimately the predominant uh variant

and and then that this this is the

beginning of the enter coven uh that's

at least what professionals are are

talking about and you can see my

statistics and research in my coveted

videos but this is an inflation video so

we're going to stick to the topic now

right now we are dealing with the result

of extremely high producer price

inflation and high uh Consumer Price

inflation substantially because of the

pain that is coming out of all of the

issues that I've just listed

and when you look year over year you're

going to see something very interesting

on the inflation chart so I printed the

CPI report sorted all of the

year-over-year increases

from ascending to declining and what's

incredible is you'll really notice a lot

of these are either Commodities or

energy related or meat yeah meat I did a

whole video of meat yesterday you can

watch that one but look at this up here

you got gasoline motor oil uh cars and

truck rentals energy uh beef beef beef

veal whatever blah blah blah blah these

are all your big inflation numbers right

here right anywhere between 14 year over

year and 60 year over year

problem is commodity prices it's worth

knowing this commodity prices do not

tend to remain high we've had a unique

move in Lumber where we had this insane

surge in Lumber than it fell now it's

kind of coming back but a lot of our

Commodities uh like wheat or aluminum or

iron uh rebar a lot of these are off

their highs or starting to potentially

turn negative more in the case of Iron

and Steel we're expecting that to turn

negative next year but in the case of

aluminum we're still at elevated prices

don't get me wrong still at elevated

prices but we're seeing the inflection

point down

we're still not seeing the inflection

point down though in things like used

cars but somebody's not buying a used

car or new car every month so it's not

like you're in affected necessarily by

that form of inflation regularly energy

costs it's a problem meat costs it's a

problem but interestingly we're also

seeing a lot of the meat manufacturers

and companies raising prices because

headline inflation is high and it's

almost like they're molding into oh well

inflation's High let's raise prices

Chipotle is a perfect example of that

Tyson meets a perfect example about that

but again we talked about some of this

yesterday so we're not going to

relitigate this whole thing when we

actually scroll down the list of

inflation

we still have higher levels of inflation

don't get me wrong seeing eight percent

increases in things like uh coffee or

salads or apples carbonated drinks

instant coffee peanut butter uh you know

six percent increases in fresh fruits uh

women's outerwear 5.4 these are still

elevated levels of inflation don't get

me wrong like the amount of money

printing that has happened is

substantial and we're just getting

started on seeing rent-based inflation

this is going to be a headliner but what

is Bloomberg actually expect going

forward Bloomberg expects that by 2022

in uh in December November and December

we're going to be at a CPI read

of 2.8 percent

that implies that we are ready to hit an

inflection point either in January

February March and don't get me wrong

I've been I thought we were going to hit

the inflection point in September and

October because I was not expecting the

Delta disaster

I was wrong that I never said that

inflation would go away at the end of

the year but I did expect that inflation

would start ticking down now that has

been delayed because of Delta but it's

reiterated by the fact that we're not

seeing that kind of pain again coming

from ports

uh to suggest that supply chain issues

will get worse

rather we're seeing them slowly get

better they're taking a while to get

better don't get me wrong solar industry

just cut its forecast for 2022 because

the supply chain issues are still an

issue they're going to be a lingering

issue probably honestly for years but

what do we do expect in terms of

inflation well again we saw this run we

saw the flattening in the summer we see

a crazy run right now and what are we

expecting well at some point and we

don't know exactly when this point is

right here but at some point we expect

to see that inflation start ticking down

again and trending down now you're going

to have winds that push this inflation

up things that are going to push this

inflation up are specifically I should

say going to be rent-based inflation and

that's because rent-based inflation

substantially lags

but the point of everything that I've

just outlined is to try to preface what

I believe Jerome Powell is going to do

tomorrow and that's very very important

because I believe that Jerome Powell

would listen to this explanation here

and agree with what I've said I believe

that because I've studied Jerome Powell

a lot I studied the Federal Reserve a

lot I studied economics a lot of studied

inflation a lot I believe that inflation

will Trend down in 2022. again supply

chain issue is still going to be an

issue rent still going to be an issue

don't get me wrong but some of these

insane prices are going to start coming

down because what's going to happen is

we're going to compare the insane prices

of 2021 to 2022 and even if they stay

flat guess what your inflation reading

is folks zero

so we would literally have to have an

insane growth of prices in 2021 and that

same growth of inflation again in 2022

to see these same ridiculous numbers

again in 2022. I think it's unlikely

highly unlikely so I'm going to say I'm

95 certain we're going to see an

inflection point in inflation at some

point in 2022. hopefully that's early

Jan Fab March something like that I

believe that Jerome Powell is going to

believe the same thing and here's what I

believe that drum Powell is going to say

tomorrow at his Federal Reserve meeting

keeping in mind everything that I just

explained about inflation I believe he

is going to agree with and before I tell

you why or what I believe that drone

Powell is going to say I want to make

sure that you understand the bond market

is literally reiterating exactly what

I'm saying so if if you thought Kevin

you're smoking crack thinking you can

predict the future you can fact check me

solely by looking at the bond market

look at 10-year treasure yields if why

is it that we have the highest inflation

CPI and PPI reports ever that we have

seen in the last like 40 years basically

ever

certainly at least for me I'm not even

30 right I'm 29 So In fairness I get it

uh why is it that we've had the highest

reports ever since again 40 years or so

and we have 10-year bond yields not

anywhere near the highs where we were

around 1.6 1.7 if we're heading towards

this 1970s great hyperinflation

shouldn't bond yields be freaking out

right now wouldn't it make sense that

people would say why the hell would I

take 1.4 on my money I'm gonna sell

those bonds because I'm gonna lose money

to hyperinflation I'm gonna sell those

bonds when you sell bonds the price goes

down when price goes down yield goes up

but folks yield's not going up yields

going down

that means people are still buying the

bonds and it's not just the FED it's

institutions as well

this is why we're seeing yields Trend

down remember the Fed was buying more

bonds when we were actually on higher

yields than they're buying now and we're

getting into the taper phase so we're

gonna be buying even less and less and

less hit the market is still continuing

to buy bonds keeping yields low why

because they don't actually believe that

inflation is going to remain persistent

it's a Hot Topic it's wonderful for the

Ben shapiros of the world and this is

not an insult and Ben Shapiro I would

expect nothing less from him okay it

makes entire sense for right uh

individuals as people on the right

Republicans uh politicians to and

complain about Joe Biden and how bad all

of his policies have ruined inflation

this is not a political video okay I'm

just saying that amplification of all of

this uh this this uh inflation drama I

think is

overdone and what it's doing is it's

taking the flavor of the day and it's

applying it to the flavor of the year

now I understand we've seen increasing

inflation for quite a while I get it

but at some point we will logically see

an inflection down not just because of

why I said but also the bond market is

pricing in exactly that

we do expect rates to go up in the short

term

don't kid yourself in fact that is where

you're going to see yields going up in

the short term this is what we call the

flattening of the yield curve short-term

rates are going up that's because we do

expect the Federal Reserve to raise

rates and we're going to talk about what

I think Jerome Paul is going to say and

that's why you're seeing a little bit of

this movement up here in the two-year

actually quite a bit of a movement up

here in the two here but not on the 10.

because we expect rates to go up in the

short term but not in the longer term we

don't actually expect inflation to last

okay so what do we think Jerome Powell

is going to say so here's what I believe

dronepal is going to say and do number

one

as of two months ago we were printing

120 billion dollars per month we tapered

by a pace of 15 billion dollars we

expect that pace to double to 30 billion

dollars which means we are going to go

from instead of printing 120 to printing

105 down to printing 75. so we're still

going to be printing 75 billion dollars

which is kind of insane there is a

possibility that drum Powell is going to

accelerate that even more than expected

would not be so ideal for markets if he

accelerates more than that double the

double is priced in

but the taper is not so important the

taper is more of a signal of potentially

what's to come what's to come is a

liftoff when interest rates go up folks

let's understand this

if we taper by okay that is a weird

little Crown thing if we taper by a pace

of 15 billion dollars the taper ends in

about June which means the earliest time

that we're likely to actually raise

interest rates is probably June or July

if we taper by a pace of 30 billion

we'll probably end the taper somewhere

in March which means we could see rates

go up somewhere between month three and

four so March and April

if we taper any faster then that is

going to move up rate expectations and

we would expect the market to react very

negatively however Jerome Powell is a

man of trying to be as transparent as

possible with his beliefs and so my

expectation is he is going to meet

the 30 billion expectation for taper

okay good

but what's more important is what

dronepal is going to say

what I believe and this is his first big

speech after getting reappointed chair

I believe Jerome Powell was going to say

the following

he is going to bag on inflation

he is going to say that price stability

is worrisome that it's something they're

strongly paying attention to that as a

result of price instability they are

going to taper sooner and because

inflation is so high we must react and

we're going to react by tapering sooner

as for rates though we are going to

complete the taper first and we're going

to watch for the incoming Data before we

make a decision on rates

look at what Jerome Powell accomplishes

by doing this he appeases Biden by

coming across as a hawk by coming across

sir we are fighting inflation but at the

same time he can actually maintain his

belief that inflation is not necessarily

going to last he buys himself time he

buys himself three to four months over

three to four months folks we better

better better better better better see

this the inflection point because if we

do not see the inflection point you

better believe rates are going up

if John Powell buys himself three to

four months which I expect he will in ex

and he's going to allude to buying

himself time

but he's still going to talk tough on

inflation as long as he alludes to

buying himself time and watching the

data before committing to raising rates

and waiting for hopefully inflation to

fall which is a very real possibility

that in Jan Feb or March inflation

starts ticking down and then hopefully

we see an inflection point in actual

inflation readings which if we don't

it's going to be really bad news but if

that's the case and if that is the chart

that Jerome Powell sort of lays out

ahead of us

then I am hopeful

that the stock market will see that as

an opportunity as an opportunity that

uncertainty Over The Madness of what

Jerome Powell is going to do tomorrow is

going to be gone he's not going to raise

rates he's not going to taper to zero

right away we don't expect that if we

got like a rate increase tomorrow or a

full taper tomorrow I think the stock

market would probably crash so I

wouldn't want to blow everything that I

have right now but I do think there's an

opportunity to do some dip buying

because I do believe a lot of

uncertainty is going to go away after

Jerome Powell speaks and that's because

I expect him to lay something out like

this and maybe he's just gonna soothe

the market maybe it's just gonna be kind

of like aloe vera on a third degree burn

yank gonna heal a third degree burn with

aloe vera but it makes it feel a little

bit better in the short term maybe maybe

he'll just end up pandering to the idea

that oh don't worry there's still a

chance that inflation will go down

and maybe if markets react that way we

continue to get a sell-off and we see

something like what we saw at the end of

2018 where the S P 500 sold off 20

percent

within three months only to take three

months to recover created a very nice by

the dip opportunity it didn't last

because Jerome Powell ended up u-turning

on too quick of a an interest rate uh

sort of uh increase which is exactly

what the bond market is predicting as

well the bond market is predicting

there's a limit to how much you can

raise rates it's exactly what the

European Central Bank says when

Christine Lagarde says wait a minute

we're not ready to tie it tighten

because the effects of our monetary

policy are going to take effect on our

markets 18 months late

so we taper now we're going to see the

lack of that sort of monetary stimulus

in 18 months it takes time when we raise

rates now it takes 18 months and is it

and if any 18 months down the road our

economy is slowing down well now all of

a sudden we're in a place where we're

tightening at the same time as the

economy slowing down that's bad this is

why the European Central Bank is

actually more cautious on tightening as

rapidly as Jerome Powell maybe will

sound like he's interested in tightening

but again I feel like he's doing so for

political reasons to justify why why Joe

Biden kept him in the seat

just my thought it was the perfect case

scenario for for Joe Biden because if

Joe Biden picked somebody else then Joe

Biden would be married to whatever the

inflation outcome is but if he threatens

Jerome pile and says you got to be a

little bit more hawkish and I'll give

you your job back it's still Jay Powell

Who was appointed by Donald Trump so you

can still point the finger politically

right it's all a political game it's

ridiculous so how do we react in this

market okay now let's get to that so

first massive fear right now right lots

of fear right now volatility index is

high it's not as high as it was last

week but it's it's high and a lot of the

the prices that we've seen are actually

kind of similar because we've been slow

bleeding on a lot of smaller stocks not

necessarily all stocks like apple

Apple's obviously been doing

phenomenally but a lot of specifically

software stocks fintech stocks

technology stocks anything with anything

that's losing money has substantially

been getting burned uh so or anything

with a higher valuation Cloud flare

great company higher valuation really

glad you two you turned right back to

trendline in my opinion long term this

is a buying opportunity for cloudflare

uh Adobe not much of a U-turn here

because it's a profitable company notice

that when you're looking in the stock

market the very profitable high margin

companies are the ones that are not

u-turning as much why why did DocuSign

U-turn as much because it's not

profitable it's got a substantially

higher valuation look at that plummet

you've got here

the money losing companies are getting

reamed look at lemonade money losing

company getting reamed look at Robinhood

money losing fintech getting reamed the

money losing companies are the ones

getting reamed the ones that have high

growth and high margins are doing better

look at trade desk it's come down from

its Highs but it's still way up the

money making companies with high margins

like end face down from its highs which

is great but still up look at Etsy high

margin money-making company down from

its Highs but still up relative to when

I say still up relative to like six

weeks ago okay like the price where we

are now on Etsy is still incredible

relative to six weeks ago right so uh in

my opinion there are opportunities to

increase your portfolio allocation to

companies that have and I've mentioned

this before but I literally have to

reiterate it high margin high growth but

also folks and this is my big secret

that I've been working on Advertising

companies the advertisers I think are

going to be huge in 2022 because

consumers are going to probably be

spending less money companies are going

to have much more inventory their supply

issues are going to slow down they're

going to want to advertise more they're

going to want to advertise even more to

try to compare to the 2021 figures they

had and we're going to see an

advertising freaking Bonanza Google

trade desk Snapchat Facebook Twitter

Pinterest uh I'm not investing in all

these companies but these are that's

just to name a few servicenow is another

one I mean I mean there are plenty of

different advertising companies some

some of these I'm not interested in

investing in uh but the point is

there are some very real opportunities

Adobe Salesforce uh some phenomenal

companies that you can invest in

and in my opinion we are at a point of

substantial fear where the market thinks

that this inflation is going to last

forever I don't believe that this

inflation is going to last forever uh I

am investing as such that I do not

believe that this inflation is lasting

forever I've almost spent all of my cash

I've got a little bit more cash to go I

send every single buy and sell alert

when I buy or sell not because you

should copy that trade but just to give

you an idea of where my head is every

single Alert in the stocks and

psychology of money group linked down

below which you can get using the Xmas

coupon code merry Christmas and happy

holidays uh and uh I'm I'm considering

especially depending on how Hawkeyes

strong Powell sounds tomorrow because I

think he's going to be putting on a

facade I'm considering dipping my toes a

little bit into margin on some of my

favorite companies that have sold down

more or have come to what I deem to be

very juicy levels I have not done so yet

but I am considering and preparing for

that eventuality we'll see uh I do

expect Jerome Powell to be hawkish

tomorrow I don't think he's going to be

nice to the market tomorrow however I

think if you if you look for the Silver

Lining he's going to make it crystal

clear that he's going to wait to see

what the signs of inflation readings are

over the next three to four months if we

continue to get high readings gonna be a

problem rates are going to go up bond

yields are going to go up and you'll see

that reaction in the bond market

very quickly and and then you know okay

now it's now it's really time to start

getting worried I don't think we're at

that time yet I think the time to worry

was actually like four weeks ago when

prices were at all-time highs and if you

watch this channel you saw me post

videos about I think the Market's gonna

turn I'm selling I'm shorting I'm taking

profits I'm closing options uh I'm I'm

prepping cash people were calling me

insane for shorting Arc and prepping

cash but I knew this fear was coming I

didn't know exactly what the fear was

going to be but I knew a level of fear

was going to be coming in December

because there were so many opportunities

uh for small things to blow up into

larger things

and that's exactly what happened again I

didn't know what it would be but we did

expect that something would happen uh so

anyway these are my thoughts on the

market these are my thoughts on jpow

tomorrow

and folks

I'm a loyal by the Dipper I'm sorry I

like catching falling knives because

that's how I grabbed the knives and I

turn around and stop people make lots of

tendys in the market maybe not stab

people slice up my attendees there we go

that's a nicer way to put it with them

knives you know people tried to

perfectly oh I'll wait for the very

bottom those are always the people who

are like oh the Market's gone up 10 oh

it's a dead cat bounce oh no the

Market's gone up 30 oh it'll come down

again and it never comes back down

the time to buy is when there's blood on

the streets people are finally more

fearful I love it and I'm dying is there

more potential for more fear and fall

absolutely

do I think we're gonna follow that full

20 that we saw at the end of 2018

probably not because there's way too

much money sloshing around

my thoughts thanks for watching goodbye