Jerome Powell's New Warning | What was JUST Said.

hey Jerome Powell just responded to

questions about the economy where we sit

today pausing rate Cuts or potentially

going slower and some Donald Trump

insights as well as tariff insights and

markets weren't really happy with what

they heard uh in fact if you just take a

look at Bitcoin for example you could

see that Bitcoin just didn't like this

at all and maybe it's something to pay

attention to you've got Bitcoin that

basically topped right as the fed's

statement came out right here and you

moved straight down after that uh Tesla

also accelerated its decline during that

going into the close here uh so let's

talk a little bit about what just

happened and why markets maybe cooled a

little bit going down to that 508 level

after Jerome Powell's uh discussion and

his pressor uh that is his his prepared

remark statement uh one thing I do want

to note quickly as well is I did send

out uh a free Alpha report to text an

email this morning talking about how

Tesla was likely to go to 318 today

you'll notice when it opened it actually

opened at about 327 ran to 329 and no

lines on this chart but guess where

Tesla Consolidated uh before falling

right around that 318 level so if you

want to watch that 31862 if you want

that report make sure you go to

meetkevin.com

Alpha and you can get those insights as

well I do believe that if we don't hold

318 on Tesla which right now we're not

we're closing uh around 311 probably

trending back to that 295 to 300 range

but we'll see okay with that said let's

get into a summary here and that's

meetkevin.com alfas sign up for those

text and email so you get that for free

every day before the Market opens so

what we have right now is a market

that's somewhat tenuous you have a stock

breath in an extreme fear territory and

this is important because it means the

market is really searching for a reason

to go higher and you're not finding it

from Drome Powell and that creates some

nervousness take a look at this this is

the CNN greed and fear chart I actually

have pretty good charts on this even

though I know a lot of people don't like

CNN but stock price breath is at extreme

fear levels this really means you have

very few stocks pushing pushing indices

to highs like Tesla really took QQQ

NASDAQ 100 uh ETF from 500 to 513 by

itself just one stock out of 100 in the

NASDAQ 100 uh and and Tesla has a strong

weight in the S&P 500 as well but take a

look at this as well put call ratios

right now at extreme greed levels only

today did we see a little bit of of

pickups of puts but these levels of

extreme greed we haven't seen since the

top of the market on July 10th and I

think this is why markets were really

looking for something juicy from Jerome

Powell today so they can get a little

bit more confidence that we have a

license to go higher because what you're

finding is 52- we Highs are actually

rotating into the fear territory and

even though Market momentum overall with

the S&P 500 at 6,000 is at extreme greed

levels it actually screams to you that

we might be trending closer to the

moving average and back down rather than

up so in other words there's more of a

risk factor here and this is something

to pay attention to and so why did

Jerome Powell not give us extra

confidence today or at least not extra

confidence to the markets after all most

people think the stock market's going to

keep going up look at this chart right

here percentage of Americans who think

stock prices will move higher it's at

nearly one of the high highest levels

that we've seen since 1987 at over about

52% of Americans we've only been there

one other time thinking stock prices are

going to keep going higher we just

haven't seen that very frequently

usually you have people under the 50%

threshold so again that put a lot of

Burden if you will on Jerome Powell to

deliver some real bullishness and I

don't think he actually delivered that

uh now I do personally have some

enthusiasms about certain stocks and I'm

going to be making a video on it and

we'll talk about it more in our Alpha

reports and that uh hint hint end phas

one of them uh but that's really a topic

for a different video for now let's

focus on some of the things the fed's

talking about yesterday yet had fed

speakers suggest that they really need

more data to determine how many rate

Cuts we should be expecting this is

nothing Burger news this is old news we

already know that but Barkin gave some

interesting insight Barkin mentioned

that we should build more homes and we

should not suppress demand any further

in my opinion this was barin's way of

screaming that we should actually be

trying to get the longer end of the

yield curve down because we continue to

we continue to suppress demand and

that's not good for the housing market

to create the stability uh that we're

looking for now I personally think if

you look at something like a 20-year

Bond or a 20-year Bond ETF like TLT I

think this 90 level is roughly what I

like to call my jpow floor it's really

somewhere between the 9065 and about

8065 levels so it's somewhere in this

range right here the reason I call this

the jpow floor is because I think jome

Powell in Prior meetings and when you

combine it with some of the other

speakers they kind of recognized that if

we stay at these high levels they're

going to start causing restrictiveness

and problems and that's what bark and

actually mentioned as well he said look

the current level of unemployment is

fine but if it weakens more we could

have a problem and that problem could

come very rapidly ghoul spe also argues

that once you start sustaining real

labor market weakness it's extremely

difficult to stop that labor market

weakness Barkin goes then as far as

saying look good right now but let's be

really clear if we have uh a a place or

if we turn it if we be enter a situation

where higher income Spenders start

spending less money because all of a

sudden they are in a place of oh wow the

stock market's gone down we're going to

spend less well then you have less

retail spending support from wealthier

consumers and when that spending support

goes away you might lose your last prop

on this economy so think about that

right now retail sales numbers are

fantastic right now everybody's really

happy about retail sales everybody's

happy about consumer sentiment but a lot

of these numbers are actually driven by

higher income individuals who have the

capacity for spending more well if the

stock market Falls and corrects you can

see a very rapid shift in some of those

retail spending numbers and you could

accelerate unemployment levels down even

more which is also not good especially

since we're already at the one:1 ratio

like Jerome Powell successfully weakened

the labor market to the point where

we're like okay cool we've plummeted the

labor market now let's just perfectly

stop it's kind of like trying to land a

plane on a dime you know rather than

landing on a Runway you're kind of

like and then perfectly stop like yeah

right it's not going to happen but you

know that's that's at least the hope

that they have and they're talking the

state of the economy just like Powell

did today he's talking up the state of

the economy to try to and hopefully self

fill that hey like maybe if I say how

strong the economy is because it is when

we look in the rearview mirror and we

just sort of discount the October job

numbers everything's fine Jerome Powell

even today reiterated that look you know

the October job numbers were uh you know

messed up by uh uh hurricanes and Boeing

layoffs and

Strikes Okay cool so you're going to

brush off the October jobs report shpe

out are you just going to go Mega dark

and quiet on the fact that the two

months before that we had massively

negative revisions and that the trend

has been down that at the beginning of

the year we were growing by a 200,000

job pace and now we're at 100,000 job

Pace I know he knows that because he's

mentioned the decline in that pace but

just ignoring the revisions is a little

bit of a problem talks up bullish

revisions but not the bearish revisions

which makes you wonder if even though he

says his views on inflation and the

labor market are balanced his commentary

doesn't really align with that he kind

of really talks up the economy because I

feel like he wants to see the labor

market get propped up and every time it

comes to talking about inflation he's

actually talking about how they've

basically won in fact even in his

prepared remarks today he says we're

closely tracking the gradual decline in

housing and services inflation which has

yet to fully normalize he has you know

frequently been referencing how Housing

Services inflation will come down but I

think this is really his way of trying

to convince the economy that like hey

you know we're good on inflation okay

just please get back to hiring would

you he does say that the labor market

has cooled and there's no concern about

being it it being a source of inflation

and I have to say yes the labor market

is probably going to be a source of

deflation now this sounds like a broken

record I've said that a million times

before and I apologize for sounding like

a broken record on that but I want you

to see one of the reasons why the labor

market has been such a source of

deflation and uh sock genen actually put

together a pretty good piece here Albert

Edwards put together a good piece on uh

questioning how is Trump going to handle

the collapse of workers share of

national income now I'm going to save

you reading this whole thing just out of

respect for your time but basically what

they argue is when China joined the

World Trade Organization and we really

were able to start uh oh RFK just got

picked as the Secretary of Health and

Human Services anyway when when um China

joined the World Trade Organization uh

you actually ended up finding the unit

cost uh per person relative to Output

prices plummet uh so basically it's a

ratio right if your labor costs plummet

and your output goes up uh then then you

know if if let's say previously we had

100 divided by by 10 let's say and now

we have that's 10 and then we have 50

divided by 20 now we have 2.5 that ratio

plummets so in other words as as the

denominator goes up and the numerator

goes down which is what we're seeing in

other words companies are making more M

money and workers are making less money

when that happens uh individual workers

need to be more cautious about what

they're wishing for and sock genen

argues corporations are able to maximize

profits and may be able to do that even

more under Donald Trump but Donald

Trump's protectionist policies against

China could help but you're going to

want to see clear policies around this

rather than just threats of

negotiation because the Main Street

worker is getting screwed by high price

levels

and by wage gains that are so weak

they're actually potentially trending

towards deflationary wage gains rather

than inflation and frankly that has been

the historic trend of globalization

people keep talking about oh we're going

to De globalize people have been talking

about that during covid and and and I

keep saying that that is the stupidest

thing in the world we're not going to De

globalize we may have de globalized

briefly right we may go from a phase of

deob alization oh there we go Del

globalization right then Co and then we

you know uh sorry so you Global

globalization first then covid then you

Del globalize SL localize your supply

chains and then what do you do then you

reg globalize because you could get much

cheaper labor in in India or in um uh

you know China or whatever and

Manufacturing has actually gotten you

know pretty fre decent in some of these

areas uh so I would I i' would be paying

attention to

this uh so this I think is very

important and they make a good point

here that no of course you're not going

to see wage deflation uh or sorry wage

inflation as a problem any more japal

that's right you if anything you're

going to see more wage deflation thanks

to China and and you know other factors

uh but anyway Jerome Powell then goes on

to say recent economic strength gives

the Federal Reserve the ability to be

patient and this is where he does talk

about tariffs and potentially skipping

some rate cuts which was a little

bearish for markets markets are still

right now pricing in a 59% chance so

almost a coin toss of us getting a 25

basis point rate cut in December but

they're only pricing in a 27% chance for

January and that's because what and then

they go back to pricing in a 53% chance

for March that's because markets right

now are taking him for his word and

they're basically saying all right we'll

get a 25 in December we'll skip January

and then we'll get another 25 in March

now I personally think that's ludicrous

and I personally think rates are going

to drop like a freaking Rock and I think

there's a lot of opportunity for rates

to drop like a freaking Rock because the

economy and the labor market is in my

opinion destined to to slow

substantially more than people are

expecting right now but I don't know

exactly when that's going to happen uh I

I think sometime over the next 12 to 18

months uh Jerome PO says we don't need

to be in a hurry to cut rates and we're

not going to let debt at the at the

government level guide us even though

we're on an unsustainable path right now

we are not at an unsustainable level of

debt now that was somewhat bullish on

people who are worried about how much

debt we have but jpw said that for a

while so that's not particularly new uh

additionally uh the uh one of the or the

interviewer asked J pal hey what happens

if the workforce shrinks and and she was

basically asking about what happens if

you get deportations under Trump and

he's like look I don't want to talk

politics but you know if you have fewer

workers less work gets done and this

basically implies lower potential GDP so

there are actually risks through you

know some of the Trump plans that have

been threatened whether it's higher

tariffs or deportations you could

actually see reductions in workforces

that that actually lead us into a

recession now I personally think there's

a chance Donald Trump opens the door to

the White House and boom we're in a

recession you know in in January or

February uh but if not it is possible

that in the near term some Trump

policies like deportations or tariffs

could lead to uncertainty which then

ends up leading to a recession I think

in the long run Donald Trump's policies

will probably be very expansionary

they're capitalistic they're generally

very in my opinion you know uh Pro Fair

you know free market and I'm a big fan

of that but in the near term some of the

policies could EX exaggerate an already

large issue and that's an issue that we

have with jobs okay now the next thing

uh J pow chimes in on is he does chime

in on artificial intelligence which I

want to hit uh but just a quick reminder

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I'll keep adding value to that so drum

Powell does talk about how artificial

intelligence is also reducing jobs in

whether it's fast food for ordering

through you know menus basically which

isn't really artificial intelligence but

he also thinks that call centers are

going to basically become fully

artificial intelligence-based

uh he uh additionally mentions that uh

you know this this could increase

productivity but also does potentially

lead to more job or people looking for a

new job which is a downside risk factor

because then if they have to go find a

new job they end up in a position where

oh no you know there aren't actually

that many job openings and you could see

the unemployment rate rise and this is

where he does say look we're mindful of

the risks it seems like we're in a good

place if we can stay here and honestly

jpow you're right if we can stay where

we are you're probably in a good spot

you're probably in a good spot if you

can stay right here but personally I

think it's wishful thinking to say that

this time is different and you know that

we're we're going to be in a place of uh

uh you know everything is all of a

sudden um going to just like all the

decline in job openings is just all of a

sudden going to stop the increase in 27

weeks or more unemployed folks is all of

a sudden just going to stop the decrease

in temporary worker hiring is all of a

sudden just magically going to stop the

uh you know sudden 785,000 worker boost

that we saw is going to continue so we

can prop up how many government workers

we have that's that's supposed to

stabilize and stay strong I mean I don't

even think doge is going to allow that

to happen with Elon Musk and Trump so I

think that's wishful thinking you know

and then when you take out government

workers you're already negative on

payrolls you know you've been NE you've

been a negative over 20,000 jobs in the

last jobs report negative negative

private payrolls it's a bad Trend that

you're in uh so at the same time Jerome

PA's talking and I think this is Looney

I think this is just his sort of way of

saying like yeah the economy is so

strong right now we might skip a meeting

or two so you effectively have 12.5

basis point Cuts every meeting okay well

that's ludicrous because what you're

doing is the economy is so weak uh in

the jobs Market in the direction of

decline that if this continues we'll go

into recession if we stay here fine

we'll be okay but if we continue we're

in recession and yes Financial

conditions have loosened right now but

that's only because the stock market has

ran to all-time highs the bond market

has absolutely tightened Financial

conditions look at the 10year I

personally and look I'm biased okay I've

got exposure here but I think this is

potentially the best time to buy bonds I

think you're at a japal floor you're at

the lows of the bond market from the

second wave of inflation fear that

people had during March April and May

after we had three hot inflation reports

in a row you know a quarter of hot

inflation reports everybody's like oh my

gosh second wave of inflation uh you're

at those levels and people think Trump

tariffs day one are going to cause all

this inflation blah blah blah blah I

don't think so I actually think you have

a much better opportunity uh seeing uh

you know bonds actually move up from

here and therefore yields move down uh

and I also think that today uh you know

I'm biased here as well but I also think

that today Nas finally hit a floor we

hit $59 3 days in a row boom boom boom

and face today up 5% over

5% uh you know my exposure somewhere

between 62 and

64 and I want to DCA on this because I

actually think there's a good chance

we're going to get back to the 7580 line

within the next few weeks you know I'm

going to make a whole video on N phase

and why I think that blah blah blah but

you know anyway we'll keep an eye on it

o enas um bitcoin's bouncing a little

bit so I'll make a full video on it we

we'll break that down in detail but uh

let's I want to see quickly if Nick T

has anything uh to add to this but these

are my thoughts now another thing too if

you're a member of the courses and you

saw my fundamental analysis on N phase I

made a new channel under stocks where

we're doing sort of uh like a more Forum

uh format encourage you to check that

out and we can chat about um uh in Phase

there and then let's go just take a

quick peek to see what Nick the has for

us and uh see if he has any added

commentary he usually does 28 minutes

ago the FED staff modeled the impact of

a tariff increase on economic activity

and inflation and presented their

findings in

2018 Powell was asked about this staff

presentation the staff basically

suggested you could look through or not

react to an increase in the price level

with little lasting effect on inflation

if inflation expectations were anchored

and the pass through effects of CA

shocks were

shortlived asked about that today Powell

reiterated that view and the view that

it was too soon to tell so it's kind of

interesting it's basically a way saying

the fed's just not going to really care

about tariffs until they hit and they

see some underlying changes uh so that's

useful so anyway uh these are updates

for you on what's going on with jpow

what's going on with the fed and uh some

of my thoughts as well on fed uh chair

Jerome Powell's pressor remember go to

meetkevin.com

Alpha to learn more and then subscribe

to the channel and we'll give you some

fundamental analysis breakdowns we'll

start with uh end phase next soon thank

you so much see you in the next one

goodbye everyone good luck do not

advertise these things that you told us

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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