YIKES. What the Fed JUST Said.

asking ourselves what's going on here

with inflation in the at the aggregate

level and you know and of course if

if any price that contributed to ongoing

inflation would would matter any any

price that contributed to ongoing

disinflation would matter too but I

wouldn't sing alloud housing as having a

a special role there thank you very

much boom there was jow and the FED

meeting and the attendees on the FED

trade were so delicious I'm so happy we

are back this is a great tendies day I

took some tendies I'm gonna have more

trades but man this is a good day let's

talk about what jpow just had to talk

about it is also coupon expiration day

it's kind of crazy day CPI fed Day

coupon expiration day check it out at M

kevin.com pitch out of the way you know

the drill email us at staff atme

kevin.com if you have questions let's

get into what jpow just said okay first

of all jpow gave us the usual little rug

and tug in which you kind of get with

the summary of economic projections I

think every every single time we get one

of these summary of economic projections

we kind of get a little bit of a rugg

and tugging we get things that are a

little worse than than we'd really H for

them to be uh and then jpow basically

pours cold water on them uh he there

were a few issues in this one first of

all we saw the FED funds rate projection

go up to 51 at the end of the year the

expectation was that we'd see two rate

Cuts in this this is only one we saw the

dot plots really consolidate up a lot

higher than where we thought they would

end up being wasn't great now jpow was

asked as as we expected like hey well

did you you know put together the

summary of economic projections with C

this morning's CPI report in mind and he

said yes we put it together with this

morning's report in mind but most people

don't end up revising what they said uh

after the data comes out so in other

words this is probably a summary of

economic projections that says hey uh

you know it's probably a little more

hawkish based on the first half of the

year we got and probably doesn't

incorporate the good news of today

that's probably because they don't want

to overreact to the Euphoria of this

quote unquote welcome news and they're

keeping uh or sticking rather with their

sort of old positioning which is ah you

know if we didn't get this good CPI

report today maybe we'd be a little uh

how should you say um bearish and this

is a bearish summary of economic

projections but as usual during the

presentation and Q&A session uh J pound

did water down the impact of these uh

quite frankly summaries uh and uh

projections regularly calling them just

projections and that they could change

that whatever labor market conditions

back to the eve of the pandemic one of

the good questions that I thought came

out of this is hey um you know are you

just going to wait until the economy

tanks and we start getting negative

payrolls reports or like when are you

actually going to uh you know cut and uh

he says look we're we're cognizant of

the pressures on lower income individual

uals people on the fringes of the

economy the damage this is doing to

smaller businesses whatever uh which is

nice to hear him say that but it's not

actually great from the point of view of

getting a bullish pow here it's kind of

like hey we see your suffering and he

literally said quote it will be painful

for especially for those on the margins

of the economy so it wasn't the most

encouraging power I have to say if

anything this was this was probably a

relatively neutral how is how I would

put it I don't think I could cheer that

this was the dove that I was really

hoping for uh I was hoping and and

expecting to get a little bit more

enthusiasm out of him uh we expected him

to water down this sort of bearish

summary of economic projections but he

made a good point over here you know I'm

like hey PC right now is already at 27

on on Headline core PC is at 28 you're

projecting it to be the same at the end

of the year what gives like you're

basically saying no progress and so we

were looking at this and we're like what

the hell and uh Steve Leeman from CNBC

picked up on it and he's like yo JP

palal like are you giving up on progress

on inflation JP is sort of like H we

just think we're going to lap some

higher numbers so it's not that we're

not projecting other progress but it's

just that as we lap higher numbers it's

going to be harder for that number to

come down more so in other words he's

kind of reiterating that stickiness he

still sees as the economy broadly strong

the labor market back to the quote Eve

of the pandemic that's an interesting

kind of standard oh yeah Eve of the

pandemic okay interesting but no greater

confidence yet just that we had a

welcomed report today obviously it

wasn't a great uh it wasn't like I mean

it was actually pretty great let's just

be real about it was a pretty dang good

report but it wasn't something where we

were able to get a super Dove fed uh and

it's not something that I think went as

as a as beautifully as it could have as

doish as it could have now uh asked

about being uh potentially too slow uh

again he reiterated they don't want to

break things they want to try to keep in

mind what's going on but he does say

look it's going to suck and really he's

asked like is a 25 basis point cut at

the end of the year you know one or two

of them basically is that really going

to make a difference and Jerome Powell

acknowledges here he goes you'd have a

really hard job if your job was to

figure out the impact of a 25 basis

point cut so he basically he I mean if I

had sum them up today I was hoping he'd

be doish we kind of got a hey man we're

in a good place we're just going to

Coast here until the end of 2025 and

quite frankly nothing changed we told

you in March we're going to Coast until

the end of 2025 and we're going to try

to get rates to about 4ish percent and

whether we have two rate Cuts now or one

rate cut this year or or an extra one

next year and one you know one fewer

this doesn't make much of a difference

so we did get a little bit of Hawking

there not great didn't really love that

kind of pow not super happy about that

again I was looking for some more

doish uh so um One Rate cut not making a

difference good to know we did also get

some be I mean we we would have

anticipated that already anyway but the

other thing and and uh I don't know how

to pronounce her name correctly Gina

smiac whatever she mentioned from The

New York Times the girl who always sits

next to Nick t uh she mentioned hey it

looks like you revised up uh your uh

sort of Target long-term federal funds

rate from 2.6% to 2.8% and it's

interesting because I didn't

actually uh noticed that uh in the first

moment I did notice when we went from

2.5 to 2.6 and I'm

like Ah that's not great that's not

great uh now it went from 26 to 28 it's

also not great it's a way of the FED

suggesting that the neutral rate is

higher it's a little hawkish I didn't

love that at all so not ideal here now

uh I believe that uh this is you know as

JP said hey you know these are just

estimates we don't know is it possible

that uh uh you know uh we're just trying

to look into a crystal bar years down

the road ball down the road yes and he

did also say keep in mind that long-term

Target assumes you're not going to have

any shocks in the economy but the

reality is and he says this himself

himself quote we're still getting shocks

in today's economy we're still kind of

like we're like in the ocean bobbing

around and it's it's not ideal it's just

it's not great today so not wonderful

little off of a position to be in not

great uh because it the bumpiness

creates uncertainty and he's suggesting

that uncertainty is implying a higher

fed neutral rate and they're starting to

kind of blend out into their projections

here I don't love hearing that that much

now grand scheme of things does any of

this stuff really matter does it change

my position from being about a 6 and 1

half to seven on the bull scale does it

change the night swoosh does it change

my

positioning no in the grand scheme of

things this doesn't really change

anything we're going back to let's get

are we going to stay on this trend of

declining inflation can we continue to

get good inflation reports here the goal

is obviously yes will we time will tell

so that's the issue at hand right now

obviously the market rallied into the

japal meeting and following the japal

meeting the question now is is how is

the market going to respond in the last

30 minutes of trade my anticipation is

this is good enough confidence to where

maybe in the last 15 minutes you could

see a nice little sort of buy the dip on

on sort of the post fed closeout dip

that we've had here uh on you know the

cues you're down about 50 basis points

since japal stopped talking could the

tip keep dipping I think it's really

hard to argue that funds should be

dumping and going bearish after this JP

there's nothing here that suggests

anything other than jal's probably just

going to take more time unfortunately

time is money so again was this a doish

Fed no was this a hawkish

Fed I'd say it was like neutral to

hawkish if I had to put them as a 10

Hawk a one uh uh Dove I'd probably put

them at like six and a half so they

leaned a little on the hawkish side

today uh and I think they're trying to

project that they're so steadfast that

the economy is strong it's not falling

apart yet we don't need dramatic rate

Cuts we're willing to be patient to get

inflation down as a long-term investor

does that really change anything no in

the short term does that softens some of

the gains of the euphoric Market that

we've seen

absolutely will people probably swoop in

and buy the dip on that probably we'll

see we'll see so I personally still

maintain long thesis on Apple uh you

know still obviously long exposed to

Nvidia but um uh shorter term here

you'll have a little bit of turbulence

on a little bit more of a you know

hawkish fed that said I think going

forward you've got a lot of catalysts

removed here you've got PPI tomorrow

which remember to subscribe to the meet

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subscribe to both of those that doesn't

cost you anything expiring coupon code

today you already know about that uh so

again if I'm looking into trade for the

rest of the week as long as ppi is

stable tomorrow and I'll give you the

numbers I expect we're probably just

slowly going to continue to trade up

nice and slowly some sectors where

you're going to get AI pricing you might

get some bigger pops PPI tomorrow we're

looking for final demand at 0.1% down

from the 0. five of the prior month uh

PPI X food and energy looking for3 X

food energy and trade looking for three

as well so we'll see what happens

tomorrow I'll be covering it live uh the

next day so that's tomorrow at 5:30 a.m.

on Friday we'll get import export prices

and the University of Michigan consumer

sentiment report so uh with that said

thank you all so very much for being

here let's go ahead and play the

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maker yeah see that sell down you're

hitting the bottom you're already

knocking on the door of the bottom so

you got uh Tesla sign kind of knocking

on the door of the bottom there nvidia's

trying to Microsoft so everything sold

down after the meeting which is really

interesting but it looks like you're

trying to create a bottom here no

guarantees it looks like you're trying

to form a bottom on a lot of different

uh uh uh you know indicators here we'll

see if Bitcoin can end up holding that

bottom there as well but it looks like

the big selloff now might be behind us

after those comments uh and often times

no guarantees uh that can lead into a

push into the close or people are going

to take profits I have no idea but we'll

see um overall bullish on the economy

until we really start getting some bad

uh um uh jobs data but I'm very watchful

of that that's why I'm a six and a half

on the bull scale as opposed to like a 9

or 10 I still think there are large

risks in that labor market anyway thank

you so very much for being here we'll

see you in the next one goodbye and good

luck why not advertise 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 PA there financial analyst and

YouTuber meet Kevin always great to get

your take