The Fed (Powell) **JUST RESPONDED** | The Trump Tariff Crash

Well, it's official. Jerome Powell just

told us exactly what we thought we were

going to hear. There is time to wait.

This is not what the markets wanted to

hear, but it is what we expected to

hear. Despite Jerome Powell being begged

by Donald Trump to please cut interest

rates today, Trump Powell says, "No, we

have plenty of waiting to do." And this

comes on a day when we are now hitting

the highest volatility we have seen

since the Japanese carry trade in

August. We have the highest buy the dip

volume in a decade with $4.7 billion of

buy the dip on Thursday per JP Morgan in

contrast to what hedge funds are doing.

People are buying the dip like crazy

right now. Whereas guess what hedge

funds are doing? Hedge funds on

Thursday, same day. So yesterday sold

global equities on a net basis. You

know, long short, so neted out the

largest one-day level of selling since

2010. So in other words, in 15 years,

hedge funds have sold the most yesterday

and retail bought the most in a decade.

What a crazy tale of two cities here.

Buy the dip on one side and getting the

f out. GTFO on the other. And we really

saw this if you looked at the market

close yesterday. Last hour was basically

straight down. often when you see a lot

of that institutional trading taken off.

One thing you're not seeing take off

just yet are flows into inverse ETFs.

So, we're going to watch those because

usually that could be a sign of peak

pain when people max out their bets on

those. Now, we're going to talk about

all the details of what Jerome Powell

just said, but some things to pay

attention to in terms of what's news

right now, uh, is there are estimates

now that iPhones are going to go up from

$1,000 to $3,500 due to tear. The Tax

Foundation thinks the average American

family will be paying $2,100 more per

year due to tariffs and they think GDP

is going to shrink

by8%. Clara is pausing their IPO due to

this, you know, tariff turmoil. Kind of

a terrible time to IPO. It's one of the

reasons for House Hack, my startup. We

were going to go public in January and I

had a really bad feeling that things

were going to get a little poopy in Q1.

So, we cancelled our House Hack IPO.

were like, I don't want to IPO during a

really crap time. And look what ended up

happening. Knock on wood when we can

time it like that again in the future.

But except on the upswing. Uh,

Republicans are also considering a 39.6%

tax bracket on those making over $1

million. And so far, Bitcoin's holding

up pretty well. I think some of this

might be because of Micro Strategy

buying, but anyway, stay tuned. Now,

before we talk about Powell, we need to

talk about this Vietnam news because

Nike and Restoration Hardware had a

little bit of a boost after Donald Trump

commented that the general secretary of

the Communist Party of Vietnam wants to

cut their tariffs down to zero if

they're able to make an agreement with

the United States. The first thing that

you have to know about Donald Trump

though is remember he's a salesperson.

And something that happens a lot,

especially in real estate negotiations,

is you'll get an agent calling going,

"Hey man, all the other buyers are

coming up in price. You going to come up

in price?" Right? It's sort of like a

way to get everybody to bid against each

other. So, because this news is coming

from Trump instead of directly from

Vietnam, there's a little bit of an

asterisk on it because of the

salesmanship that could be coming from,

you know, Trump's POV on Vietnam to

encourage other countries to start

bending the knee, right? Once one does,

maybe all do is sort of the thought.

Now, something else that you have to

remember about Vietnam is we imported

about

$123.5 billion from Vietnam to the

United States. They only imported from

us$26 billion. They had average tariffs

on our stuff at about trade weighted at

about 1.1%. Okay? So 1.1% on 26 billion

is what they would give up if they get

rid of their tariffs on us. We have a

46% tariff on their $123.5 billion of

goods right now. So obviously there is

also the argument that Vietnam stands to

benefit a whole lot by getting rid of

their 1.1% which you know maybe that was

the goal all along. It just puts

everybody through some real short-term

pain. And that's obviously why there's

so much by the dipping because people

believe that this is just going to be a

short-term negotiated strategy to not

destroy the economy but rather to

negotiate 000 free trade. Who knows?

Because we're not entirely sure how that

00 free trade is going to align with

this idea of bringing manufacturing back

to America. We had a big discussion

about bringing manufacturing back to

America this morning in the course

member liveream and we're looking at

some of the arguments on both sides of

this. Uh long and short, it's very

difficult to compete globally. Uh and so

there would take a lot of

infrastructure, industrial expansion,

and training in the United States to

actually bring this back. Uh China

obviously had retaliation this morning.

And then we're going to talk about

Jerome Powell. China's 34% retaliation

this morning is significantly more

calculated than what we imposed on China

because they're purposefully in addition

to that 34% trying to hit us where it

hurts. They hit seven rare earth exports

that they're now restricting to us.

Really important to remember that China

controls 60 to 70% of supply of the U of

of rare earths in the globe. Uh I'm

going to butcher some of these names but

whatever. Seamarium is used in magnets,

motors, nuclear reactors. Gatalium

whatever is used in

MRI/LR LED lighting. So for contrast

colors, turbium is used in LEDs.

Disprosium is important in electric

vehicles, wind turbines, high

performance magnets, motors,

uh lutium, medical imaging, petrol

refinering, some electronics and

scandium, aerospace metals as well as uh

utrium whatever superconductors. These

these are important battles. They're

trying to hit Trump where it hurts.

Probably also their version of

negotiating, but uh restrictions on

these rare earths when China basically

controls 60% of the supply is

problematic. This is one of the reasons

why Donald Trump wants a crit critical

minerals deal not only in Ukraine but

also wants Greenland because Greenland

is expected to have access to somewhere

around 40 different critical minerals.

Though obviously mining over there is a

little bit more challenging just because

of the weather. Now, as far as Jerome

Powell, there were these really large

expectations today that Jerome Powell

was going to come in and cut rates. In

fact, I've been responding to tweets on

X and and I hate doing this because it's

so one-sided on X. It's it's a very

right-leaning platform. And you know me,

I just look at the facts and reasonable

data. I don't care about your politics.

Uh but there's so many people on X that

are getting all these likes and retweets

because they're like, "Powell should cut

rates." And this was before Donald Trump

even said Powell should cut rates,

though we know what that's what he

wants. People are like, you know, Powell

should cut. Powell needs to cut. Pow

needs to cut. And everybody's like,

"Yeah, Powell's going to cut." And so, I

think there was some expectation that

Powell is going to like announce some

cuts today. That's insane. Of course,

he's not going to do that. He's totally

stuck in a rock in a hard place. He had

job data this morning that actually

reiterated that he should hold higher

for longer. I mean, consider the job

data this morning. We came in at 228,000

jobs versus the 140k expected. This is

great. Absent tariffs. This is actually

good news. This is fantastic news for

the economy. Now, we did have a minus 34

on the one-month revision. The two-month

revision is minus 48. Still a great

read. We had 20,000 workers coming back

uh from strikes. And we had some state

and local government hiring offsetting

Doge related firing. We also had warmer

weather in March. So, there are

potentially reasons why we saw almost

all sectors, transportation, retail

trade, social work, healthcare move up

in hiring rather than down. Uh there's

also this idea that there's a lot of

pull forward of demand. We need more

workers now to get ahead of the tariffs.

So, the jobs data was really good

though. I mean, you could say bad things

about it, but it was pretty good jobs

report overall. The problem though is

Jerome Powell is destined, and this is

what he talked about. He's destined when

it comes to a choice between jobs and

inflation. He basically implied that

they're going to go for supporting the

jobs market when and if the jobs market

actually breaks. So far, there's no sign

of the jobs market breaking. So, they

could focus on inflation, which is

running around 2 and a half% on PCE now,

and is expected to rise to three to

three and a half% after these quote

larger than expected, that's what she

said,

tariffs. The thing about

Powell is when Powell reacts and

capitulates and we start seeing rates

actually come down from Powell, it's

going to be in response, very likely to

the job market faltering. The problem is

by the time the job market falters, it's

probably too late because it's going to

take a lot of time for those lower rate

cuts to actually work their way through

the economy. And so we probably are

already in a recession by the time they

turn around and cut. This idea that the

Fed can preemptively cut, I think, is

misplaced. Markets right now are pricing

in four rate cuts for this year. That's

double what we were pricing in a month

ago. Mind you, a month ago, markets

peaked out. Right at the end of February

is when markets peaked out. That's when

my fund gave people $40 million back and

said, "Be careful. We're about to end.

We're about to go into a poop show, you

know, after returning 25%." You know, if

it was still open, we'd probably be

substantially outperforming right now

because the holdings we have or had were

very well positioned for rate cuts and

hedging. We were on triple leverage

bonds, which have been skyrocketing over

the last month. We were on uh mortgage

companies like Rocket Mortgage, huge

holding just skyrocketing now and

they're pulling amazing things off with

their acquisitions. We've been talking

about those in the meet Kevin membership

as well. Some of the acquisitions and

the longer term implications of where

the value of Rocket Mortgage actually

sits right now is uh and and is it a buy

the dip opportunity in this market?

Anyway, uh Jerome Powell uh see that at

meet.com. By the way, many of you

already know the price is going to go up

on that Meek Kevin membership on April

15th. If you lock that membership in

now, which is less than a buck 170 a

day, uh you will lock that price in

forever. You know, if that pricing goes

to say $3 in the future per day, you've

locked in 170 forever. So consider that

over at mekevin.com. But anyway, Jerome

Powell, he gets you all the courses, all

the alpha reports, all the lectures, all

the live streams we do, the course

member meetups, you name it. But anyway,

Powell made it very clear that with jobs

holding up, it's not really necessary

for Powell to even consider cutting

right now. and instead it's important

for them to be very patient. He says,

quote, "It's too soon to do anything. We

are well positioned to wait for greater

clarity before considering policy

adjustments. Tariffs are likely to rise

as

infl raise inflation uh in the coming

quarters with more persistent inflation

possible." Now, this is interesting

because it's a total flip-flop from what

we heard like a month ago when Pal was

like, "Ah, tariffs might end up being

transitory." And then everybody's like,

"No, no, no, no, no, no, no. He's

bringing transitory back.

No, it's already gone. It's already

over. It already looks like a joke." So,

it's clear to the Fed that the tariff

effects will be significantly larger

than expected, that the outlook is

highly uncertain, and the obligation to

make sure these one-time increases don't

become continued price increases is

high. And while the jobs market and the

jobs data today tells the Fed, "You have

no rush." Jerome Pal is just going to

sit back and go, "Huh, I guess we'll

just wait and see, you know." Hey, by

the way, I like purple ties. Why do you

wear purple? I like the tie. He told us

that today. Although then he did say,

"Oh, should I wear a red tie?" No.

Should I wear a blue T? Nah, I'll stick

with purple. So, politics sort of

reaffirms his belief, which is not a

surprise. We've all known that anyway.

But anyway, this idea that the Fed's

going to be focused on uh you know, the

dual mandate. Well, of course. And what

does the dual mandate tell the Fed to do

right now? Nothing. It's that simple.

So, this idea that people and and I said

I've been saying this in the course

member live streams and actually on the

channel. Don't expect Powell to bail you

out this week. He ain't going to do

anything for you. He's not going to do

anything for you for a while. Markets

are pricing in the a 36% chance of a cut

in May. I think the chance of that is

zero. Uh although we'll see what happens

between now and then. Markets are

pricing in the first cut for June, fully

priced in. Markets are pricing in a

second cut in July, fully priced in. and

markets are pricing in two more cuts by

December fully priced in. You have four

cuts fully priced in right now. This is

happening while we're seeing some, you

know, inflation expectations start

creeping up. And Jerome Powell does make

it clear that the consumer is critical

to our economy here. So, you know, are

people going to stop spending? We don't

know. People spent during COVID. People

spent like crazy after COVID. People

just say they're negative, but then they

keep spending and the economy keeps

going. So maybe that's a bullish reason

to keep buying the dip. I mean, I

actually think the best coupon code

ending ever is not the fact that at some

point we're going to close the fundra

for house hack where you get, you know,

5% yield, diversify away from the crazy

stock market. Uh you get upside, all of

the upside in the stock, 5x, 10x, 2x,

whatever ends up happening with the

company, 100x, you get all of that with

downside protection. It's a really cool

offer over at househack.com uh for

diversifying, you know, read the ppms

and circulars. But but beyond that, uh

what's a really amazing coupon code is

this idea that hey, buy inventory now at

companies like Restoration Hardware or

buy a car inventory now because it's not

yet subject to

tariffs. Interesting. I mean, just this

morning, we heard that the Nintendo

Switch pre-orders are being delayed

because they're not sure they are able

to price it at the same price anymore

because of the tariff drama. Nintendo

Switch 2 doesn't come out until I think

it was June 5th anyway. So, I guess

there's some time on the pre-orders, but

we'll see. Uh, Jerome Powell says he's

frequently in contact with other central

bankers and sort of he's he's jokingly

asked if you know they have a group chat

or a signal. Uh, and Powell says uh

they're not at liberty to say. Uh, and

then when it comes to housing, Jerome

Powell nails it here. Jerome Powell says

the problem with housing is most housing

markets in the United States, not all of

them, you know, they're definitely

overbuilt housing markets, but most

housing markets in the United States are

underbuilt, under supplied. And this

creates this sustained housing value.

And in my opinion, that's what's so

desirable to what we're doing at House

Hack because you're diversifying away

from this craziness into where there's a

housing shortage. Uh and then obviously

upside in what we're doing as a company

beyond being backed by, you know, over

$60 million of actual real estate.

Anyway, so so this gives you a breakdown

of the jobs data and POW, but I want you

to relate this to what's going on with

tariff negotiations. Remember that the

biggest tariff negotiations we need to

pay attention to are the European Union,

which we still haven't seen the counter

measures there, and they're expected to

be quite big, including potentially a

billion dollar fine to Elon Musk for

spreading misinformation. That's

interesting.

uh topic really for a different video.

But also this idea of China like how are

we going to negotiate with China?

Vietnam is relatively small when it

comes to our total trade. You know, our

total trade in terms of uh imports sits

somewhere around $4.4 trillion that that

we might actually be able to tax. Uh and

26 billion of imports divided by uh you

know $4.4 trillion is less than 1.5%.

So, this idea that, you know, uh,

Vietnam is is solely good news, that's

not the big player you want to pay

attention to. You want to pay pay

attention to the to the big players. Uh,

actually, I'm sorry, it's a little bit

more. 12, it's 123 is what we import

divided by 4.4. Vietnam works out to

about 2.8% of of our imports. Sorry, let

me correct that. Uh, but, uh, we want to

see the big players and we still haven't

heard from Vietnam themselves. You know,

this is Trump's POV. It's a good sign,

though, that Trump is willing to

negotiate even though he kind of keeps

telling us that he doesn't want to

negotiate. wants to bring manufacturing

back to the United States. I think

everybody's pretty convinced that this

is all just a big negotiation to try to

get to zero zero free trade and then

we're right back to free trade. At least

that's the hope. You know, if we really

are trying to bring manufacturing back

to the United States, probably going to

go through a dirty recession and then

you could pull it off because then you

could subsidize the manufacturing in the

United States as a form of stimulus. You

know, industrial work programs like a

new works progress administration or

whatever. Oh, interesting. US judge

rules Trump administration violated

court order by freezing FEMA grant

funding. Interesting. So anyway, we'll

we'll see where it goes. Uh if you want

my trade alerts or commentary on the

market and the course member live

streams, you want to be part of the

course member meetups and be part of a

rational community. We're not like, you

know, we're not we're not going to put

left thoughts down your throat. We're

not going to put right thoughts down

your throat. We're agnostic to politics

and we're just trying to provide

perspective. You want to be part of that

community, join over at mekevin.com. And

then of course if you want to diversify

away and earn 5% per year, you get paid

monthly by the way, go check out

househack.com because on top of that 5%

you get all the upside we're able to

pull off over at the company and uh and

boy, we think we are gloriously

positioned for whatever the heck happens

in this economy. Uh so we kind of think

we're almost like a counteryclical trade

at this point, which is really exciting.

So anyway, thank you so very much for

being here. I really appreciate you

always watching, whether you're on live

or or watching uh uh the videos. I

always appreciate you being here.

appreciate the support. Always leave me

your comments and perspectives. Uh

whether you like me or don't like me, I

hope you appreciate the perspective.

We'll see you all uh in the next one.

So, thanks so much for being here. We'll

see you. Bye. 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 Praat

there, financial analyst and YouTuber.

Meet Kevin. Always great to get your

take.