*Exactly* Where the Fed CUTS Rates | Buy ON THIS DATE.

I may have discovered a chart the

Federal Reserve is using to determine

when it's time for them to stop Hawking

and if you are a long-term investor or

Trader I think this chart could be

really critical for your investing it

almost perfectly seems to line up with

the behavior of the Federal Reserve

though I will say

I I just had the stomach flu last night

uh it started at like eight o'clock and

I I feel like I lost a fight like I got

kidney punched and and like every part

of my body hurts I don't even want to

sit here right now so sorry uh

the shot must go

anyway uh I hope I'm better but who

knows okay so look I don't want to bore

you so I want to I want to speed this up

for you okay you've seen this chart

before but you haven't seen the other

two probably uh mostly because I've only

been kind of talking and brainstorming

with course members about it and I'm

like I don't know is it is it and I'm

like oh my gosh it is uh so we've been

brainstorming and it just aligns it's

perfect almost it's really interesting

so it's worth noting that drone Powell

does look at charts like this this is uh

something that is called the five year

Break Even rate you've heard that a

million times this year it's uh you've

seen this chart but you haven't seen the

other two it is basically a measure of

the spread between uh treasury bonds and

treasury bonds that are inflation

protected and basically the the higher

uh this number goes the more the market

is seeking inflation protection because

they fear that inflation is going to go

up the lower the number goes the less

the market is seeking inflation

protection that's why the the spread

between the the two the break evens we

call them can be a market indicator of

inflation you could use the five year or

the 10-year they're almost exactly the

same so this is year to date obviously

this chart looks pretty good right it's

clear that we are at the lowest points

year to date and uh we this somewhat

aligns with uh actually I would say

pretty well aligns with the behavior of

the fed from Jerome Powell calling War

Game Changer over here uh to the war

actually really commencing uh and uh and

break even inflation skyrocketing and

then you get these sort of peaks in the

summer as we started having concerns

that wait a minute like inflation is

coming down no it's not inflation's

coming down no it's not oh my gosh and

then over here you have Jerome Powell

getting a little bit more Angry after

Jackson Hole right so this very much

aligns with not only the what the FED

says when they talk uh but then also the

Market's expectations of of the fed's

actions so in other words the more

aggressive the FED is the more we

actually see this line go down and what

I've noticed is the more this line goes

up the fussier j-pow gets he wants this

line down uh and the last press

conference was right about here and I'm

like I don't know I mean that's that's

low right ish I mean it's not as low as

it once was uh earlier like the end of

September over here but but it's

trending down right I think the reason

Jerome Powell got as aggressive as he

was in this last press conference where

he's starting to send the signal that

hey like we're not close like we still

have a long way to go here we don't know

how long that way is but he was pretty

aggressive in the last fomc meeting and

their SCP projections their summary of

economic projections data released was

pretty hawkish and so then I zoomed out

for the five year this goes all the way

back to 2018 on the left side and I

realized a little bit more okay this is

why Jay Pal's Hawking we can't stay

around that level there on the right

it's way too high in fact if you extend

that line all the way across you're at

2018 highs over here when Jay pal was

potentially going to get fired by Donald

Trump for hiking rates they're looking

at this charcoal we have we have to come

down we have to bring it down bring it

down and uh Jay Powell and the FED

U-turn leading into obviously this is

the pandemic but they u-turn at the end

of 2018. now what's remarkable and I

want you to think about this because it

really makes sense of this okay the

Federal Reserve where they u-turned at

the end of 2018 where do you think it

was I wanted you're like you will

understand this chart and then when I

zoom out to 20 years it's going to make

a lot more sense but I want you to think

where did the Federal Reserve you turn

and get more dovish remember what I said

over here it's too high for them so

they're being aggressive well if it's

too high for them and they're Hawking

where do you think they u-turned the fed

you turned right

here right at the bottom of the break

evens so in other words break evens had

to start coming down this is about

October of 2018. break evens start

coming down and the FED u-turns all

right we'll pause rate hikes and

inflation expectations go up then

because it's like wait you know that

could be bad but then they actually

continue to Trend down which is why they

kept rates stable and then of course

they substantially cut rates uh I can

perfectly align this here they their

rate cut they're Unlimited

foreign and then over here in covid

where do you think they cut rates

remember the fed's aggressive when the

number's high and then they cut rates

when it's really really low so if you

had to guess where was March 23rd

it's honestly not a trick question it's

right there

so like when's the FED gonna U-turn oh

when expectations hit their bottom okay

so are we anywhere close to the bottom

well we're at a low for 2022 over here

but are we at a low enough level where

the FED can cut well I mean after all

rates over here worth noting we're about

two and a half percent right and rates

over here right now are about 4.25 so

we're like way higher we're way higher

the terminal rate could be double on the

right side there uh it means we could

hike to five percent right and that

should really drive this Breakeven

expectation down but now I'm going to

zoom out 22 years and this is remarkable

you ready for this okay look at this

folks

where do you think the Federal Reserve

you turned over on the 20-year chart

well the u-turned in about February of

2009 which on the 20-year chart is a

little harder for me to pinpoint but I

believe that is right here so it wasn't

perfectly at the bottom but I think you

kind of get the idea here right over

here the FED U-turn was basically at the

bottom we know in 2018 the FED U-turn

was over here and if we go to the.com

era we know that the federal reserve's

U-turn was right about here the

beginning of 2023. so look at that folks

this is a pretty blunt instrument here

that kind of tells you exactly when to

buy it's really interesting so if you

want to time the perfect re-entry to the

market if you're you're heavy in cash

you want to make big money or or you're

you're all in and you're like dude I

wish I was Heavy in cash right and

you're like I'm all in maybe that new

money that you're earning right now

don't put it in yet right look I'm a

personal financial advisor I'm not your

personal financial advisor so I can't

give you personalized Financial advice I

don't know your situation right you know

you're buying a house tomorrow your

situation could be different than

somebody who's like I don't need my

money for the next 30 Years right anyway

uh so Point here is that we probably

aren't going to see the rate Cuts start

when the FED is or when the break evens

are this low because we're still going

to have too much residual fear I would

guess if we would get to levels that

were in line with 2018 right about here

I think that would be a little bit more

acceptable for the FED to certainly

pause if not even start cutting now the

difference between where we sit now and

here works out to roughly

0.7 0.7 points so we sit right now at

about 2 19. we need to get all the way

down to about 1

149. so when we get to about a spread of

149 that's probably like high time that

they cut it is possible that they pause

before that because remember rates over

here were two and a half rates right now

are four and a quarter so maybe this

number goes down to one which we're on

our way to going down to one I wouldn't

be surprised that within a month within

30 days we're probably at least if this

trend continues we're probably going to

be under one and that would Pro that

would in my opinion potentially align

with the FED pausing Feb one

that would be enough for a pause now

there's a danger What If the Fed pauses

and then the market

skyrockets right so the FED can

manipulate this what they'll do is they

might say something like you know

they'll send Nikki leaks a text or

they'll do some press thing like oh yeah

you know some people are talking about

pausing in February right all it takes

is a little hint like that and then like

I think they all get around like it's a

football game or something like all

right let's see what happens all right

they just went on CNBC or Bloomberg

let's let's see what happens to the

break evens huh huh oh it's going up oh

no okay no no we can't do that if it

stays stable or it goes down oh oh yeah

yeah it's going down you know like I

that sounds simplistic

but I believe it it just it almost

aligns perfectly uh with history it

aligns with the federal reserve's

Behavior Uh or like when they're gonna

be hawkish and when not and I think you

could use this tool for trading uh or

long-term investing quite well now it's

no guarantee uh you know you could

always use the four most dangerous words

of investing this time is different but

this is a pretty good one anyway thanks

so much for watching folks we'll see in

the next one good luck oh and subscribe

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