The Powell Curve.

in the next 36 hours your opportunity to

get first access at the series a by just

being a course member which is like

triple quadruple value goes away because

the pricing will be substantially worse

if you try to buy in the future so try

to get yourself into the programs of

building your wealth before the end of

the day of July 28th we'll see you

there's have you heard of the Powell

curve well this Powell curve could be

what determines whether or not the FED

ends up pushing us into a recession

forcefully to bring down inflation or

not the Powell curve is very very

important in fact the Powell curve is

Jerome Powell's answer to why we're not

going to have a recession or at least

that's what he said so in March which

what's very interesting here is in March

Jerome Powell said fear not we will not

have the r word no matter whether you

define it via Biden's definition or how

the markets actually viewer recession

which is two coordinates of negative GDP

we won't have the r word because fear

not the Powell curve is steepening what

do you mean potentially the Powell curve

going down my line is going up and as

long as my line is going up we won't

have a recession yes folks literally the

Powell curve is drone Powell's excuse

that as long as the line goes up we are

Gucci and as long as the line goes up

the FED should continue to be a little

Hawk and not a dove but those big boy

pants on and talk dirty to us about how

they're going to raise interest rates

make everything more expensive constrain

our wealth and force demand down because

by forcing demand down inflation will go

down and then we can go back to printing

more money in the future which is what

makes j-pow happy if you saw my uh

Halloween video you remember it was all

about giving away money because that's

what j-pow does anyway he wants to go

back to being happy but right now the

power curve is going up or was it well

yes it was that was March so what has

happened to the power curve and what

even is the power curve and why is it

important for you to know about it well

again it's important for you to know

about it because it dictates how J

Powell responds and Jerome Powell was

right going up through March the pout

curve has been doing this in a very very

dramatic fashion now I'm going to tell

you what the pow curve is Powell curve

and then I'll talk to you about what

it's been doing by showing it to you so

the way you do the Powell curve is you

simply take the three-month treasury

yield so that sounds fancy but it's just

basically if you put your money into a

three-month t-bill what's the annualized

yield that you're expecting from that

bond in other words since it's only

three months you have to multiply it by

four and then you get an annualized

yield right don't worry so much about

that what number is the chart at for the

three month yield and if that is at 2.5

percent great we got ourselves part one

of the equation then we want to look at

the three month yield 18 months out and

that's because people play in the

Futures market and go we think treasury

yields are going to be at X percent in

18 months on the three month annualized

of course and if that number is three

percent then the spread or the distance

between these two numbers is 0.5 percent

well folks the difference between these

two numbers has run up to in excess of

2.5 percent roughly around the time

Jerome Powell said hey my curve is still

going up which says no recession and we

keep on hike hike hike doodling well

what has the curve done since March

here you go folks this is the Powell

curve the Powell curve has plummeted and

could potentially be at risk of

inverting within the next month which

generally when the Powell curve inverts

as you could see what happened over here

in early 2020 when the power curve

inverted we ended up having a recession

within 18 months thereafter oh and take

a look at other times it's inverted oh

right before the.com bubble oh and right

before the 2008 recession so no it's not

only because of a 100 Year pandemic it's

because economic and bond market

conditions have aligned in such a way

that when you get an inversion of the

Powell curve you could potentially have

one of the most reliable indicators of a

recession even more reliable than that

famous tend to inversion potentially

because as the Powell curve inverts it

can be a sign that you're even closer to

a recession than we previously thought

now we have not had an inversion in the

power curve yet you can see here we sit

around that 50 basis point spread

however because the power curve is

falling so rapidly because of

expectations of the federal reserve's

actions and what the Federal Reserve has

actually been doing that is they are

literally starting to walk the walk

rather than just talk the talk well now

we're starting to see an inversion or

the direction of a potential inversion

coming in the power curve what's great

about this is that the more we get the

Federal Reserve walking the walk the

more the market say okay okay well we we

trust you now we trust you now you're

you're gonna do what you say you're

going to do we believe you can we scale

it back a little bit now okay can we

just scale it back a little bit because

here's the thing no matter what happens

at today's fomc meeting the big thing is

going to be what's going to happen in

September November and December the

markets have pretty much told us that

today July 27th we are expecting a 75

basis point hike that is going to bring

us to a Fed funds rate of about 2.25 and

the odds of this is sitting at about 73

percent right now so we're pretty

certain we're going to get this kind of

hike then we get to about a 50 50 chance

that we're going to get a 75 basis point

hike again and then a 50 over in

September and then in November and

December we're probably looking at

either 50s or 25s TBD that so much

doesn't matter right now what really

matters is the following factors okay

this is what I want you to pay attention

to I don't want you to so much get

confused by Waller and Ballard planning

for a 75 basis point hike or Esther

George dissenting last time going for a

50 basis point hike that's that's not so

much really what matters right now here

is the exact list for the next three

months what you got to pay attention to

when it comes to the Federal Reserve

because remember they're often August

and they don't have a meeting in August

so we're not going to be seeing Jake

Powell talk to us for uh well at least

in the capacity of of standing in front

of the fomc Federal Open Market

Committee I'm sure he'll be having

plenty of wonderful interviews to talk

our Market to death between now and then

so he won't be gone but he won't be in

front of the fomc but in the meantime

what is it that we're looking for from

J-pop well folks number one is we want

his reaction to the Powell curve the

reason we want his reaction to this is

because if he says okay the market is

telling us we've done our job now it's

time to do the famous old U-turn that is

going to be a huge Buy Signal to markets

remember markets have bottom every

single time the Federal Reserve has

u-turned whether that was in 89 in 2003

in 2009 at the beginning of 2009 in 2018

in December or in March of 2020. all all

of these Market crashes bottomed when

the FED u-turned therefore if the Powell

curve is enough for Powell to finally go

okay yeah my curve is no longer going up

into the moon it's it's time to U-turn

because I want my curve to go back to

the Moon uh then then you know what if

he recognizes that that would be deemed

as bullish so we want to see some kind

of reaction to the power curve now

that's going to be dressed up so you're

gonna have to look for it because you're

going to hear them talk about the

difference between near-term rates and

Futures rates when you hear those words

near term rates Futures rates that is

power curve talk okay nobody's gonna

stand there at the fomcb and go so

Powell your curve looks like it's about

to invert any kind of talk about the

three-month near-term and medium-term

rates that's what you're going to look

forward to or even forward rates might

be another way to say it okay pow curve

pay specific attention to this very very

critical today number two we want to pay

attention to Jerome Powell's reaction to

GDP data well GDP data comes out

tomorrow which is July 28th which is

also the day the coupon code expires on

the programs I'm building your Wealth

live streams with me every day the

market is open when I'm in the office

and as much as I can when I'm traveling

which is very very difficult sometimes

but I plan not to be traveling much

anymore after this trip here but anyway

awesome continue to add a beautiful

fundamental analysis lectures whether

it's in real estate or stocks and

greater discussions with the community

there so make sure to check out those

programs cut that coupon expires the

same day as GDP data which is tomorrow

now why do we care about j-pal and GDP

data well the reason we care about j-pal

and GDP data is very simple because

Biden is trying to redefine what it

means to be in a recession he says no no

a recession is only called when the

National Economic Bureau research Bureau

whatever when these folks say it's a

recession the problem the problem is

those folks tend to take 4 to 14 months

after a recession to actually tell you

yeah damn I guess we were in a recession

so the markets are like we don't care

about these morons at all if we get two

quarters in a row of negative GDP we are

technically in a recession so take your

definition and shove it where the sun

don't shine and we're gonna be in a

recession stop trying to BSS why don't

you actually talk straight to us for

once oh right because you're a

politician anyway so GDP data comes out

on the 28th and obviously Jay Powell has

having his meeting on the 27th so we

want to get an understanding from Jay

Powell hey Jay Powell

really gotta know man

do you think if we get two quarters in a

row of negative GDP we're gonna be in

recession and he's gonna be like well

yeah you know the textbooks have uh

traditionally told us that uh that is

the definition of recession and uh

that's generally what we're inclined to

believe now I don't know why all of a

sudden I sound like George Bush but

whatever we want to know his definition

of GDP uh because that will also impact

his uh response to the power curve the

potential inversion of the power curve

next up number three

oh God

I'm coughing because this one's so full

of BS

we gotta understand

does Powell think that we're at Peak

uh Peak CP lie I mean CPI data so uh CPI

data thoroughly by the bond market is

being told to have hit Peak and that's

because a consumer inflation

expectations have peaked and are going

down inflation Expectations by the bond

market have peaked and are plummeting

they're at the lowest levels that we've

honestly seen in a year which is

remarkable commodity prices are falling

copper Industrial Metals like iron

falling nickel falling lithium

stabilizing uh wheat we've got some

drama here recently because of some

rockets that uh that came uh over to the

Ukraine after a wheat deal between

Russia and the Ukraine but we don't do

so much talk about this the point is if

Peak is behind us

and Jerome Powell admits that the peak

is potentially behind us

it could be very very Gucci for the

markets in fact uh let's just take a

look right here okay all right uh this

uh this right here is what the chart

looks like you can see we are literally

below where we were a year from now on

inflation breakevens and this chart

usually plummets three to four months

before the CP lie Falls uh and um yeah I

I personally would be planning for the

CP lie to be coming down uh and and I

kind of am so anyway uh this this is

important these are the three important

things that we gotta watch for for Mr J

Powell going forward whether it's at the

fomc meeting or thereafter along with

that coupon code folks we'll see in the

next one goodbye