f*******k: What Powell JUST Said

Well folks, we just had the Federal

Reserve presser and the market had a

little bit of a heart attack for a

period of time. Unclear what this is

going to do longer term, but I will give

you the bottom line of what JPOW just

said and it's not what we want to hear.

We did not get any setup for a September

rate cut. Instead, JPL basically told us

we should be grateful that he's not

raising rates because inflation is

already showing up in goods prices. In

other words, be happy rates ain't going

up.

What? That was not what we were

expecting getting into this meeting. The

market broadly has been pricing in an

over 60% chance that we're going to get

a Federal Reserve rate cut of 25 basis

points in September. And that would

potentially set up either uh cut, skip,

cut, or cut cut. Well, the odds of that

just got poopy dupied and they have

plummeted by uh nearly over 10% already.

I mean, we're down we're less than a

coin toss now chance of getting a rate

cut in September. And I think as more

economists update their projections and

you start getting the bond market

trading on this, we will see these

September rate cut numbers change very

rapidly, especially over the next two

days as we wait for the next Fed jobs

report. But what we also got from JPAL

in addition to this comment of, hey, be

grateful we're not raising rates right

now, is this comment that

we're going to wait and see what the

data tells us. And then people are like,

all right, cool. So like if the job data

comes in weak or you get a cut and he's

like I don't know we'll have to wait to

see what the data tells us and people

are like

what this is not what we expected from a

quote unquote transparent Fed. Usually

when the Fed is getting ready to cut in

the next meeting they tee it up. You

know they put the ball on the tea cuz

they don't know how to play real

baseball. So they put it on they play

tea ball. They put it on the tee and

they're like, "All right, let's get

ready to swing." And they tee it up. No

tea. Okay. No bat, no tea, no ball

today. JPAL took the ball and left. Uh

diabolical. Okay. In addition to that,

people are like, "Okay, well then if the

data on Friday comes in bad, like are

you going to cut at that point?"

Don't know. We'll have to wait and see

for the data. You know, right now we

just want to pay attention to the top

line of the unemployment number because

we're seeing the supply of labor go down

and the demand for labor go down, which

is a sign of a weakening economy. The

only reason the supply is going down

really right now is because of

immigration policies, which we'll see

how, you know, that affects the economy

longer term in terms of consumer

spending. But I mean, consider for a

moment when you have ice raids reducing

the supply of labor, at some point those

ice rates probably chillax

uh after sort of the political wave of

it all goes by and then you still have a

weakening economy. So then you still

have demand weakening and if supply

stabilizes at some point, you're going

to see the number show up. I think

that's what JPAL's trying to suggest

when he says, "Oh, well, you're going to

have to pay attention to the topline

number." But he's never told us before

it's the topline number that matters.

Usually it's always been the underlying

metrics. How many job openings do we

have? What are the quits levels? What

are the uh uh you know um layoff rates.

He didn't mention the word layoff once

today, which was mind-blowing to me

because in previous Fed pressurers, he's

always talked about how important

layoffs are. And as soon as we see

layoffs,

we're screwed. Basically, he didn't even

mention that today. So, he was really

really like this meeting today felt like

it was just designed to be a middle

finger to Donald Trump. That's what it

felt like. Like, we're we're not

cutting. We're not interested in any of

your comments. In fact, like look at

this most diabolical moment here from

Powell. Somebody asked Powell, "Hey,

like are you going to leave?" You know,

basically like Donald Trump's trying to

get you out like do you have any

comments on this or whatever whatever

whatever. Before the guy's even finished

like asking his question, Jpal just

looks down and closes his binder and

walks out essentially. Look at this

diabolical.

>> Sorry, I do not have any update for you.

Thanks very much everyone.

>> Basically, do you have any update on on

Trump asking to leave? It's just like

that was just his mood today. Right. So,

I'm setting you up with a few things

here. Right. We're setting you up with

this mood of close the binder, walk out,

take the ball, and leave. We're setting

you up with this mood of pay attention

to the topline employment number. That

could be a hint. We've never heard of

JPL talk about that before. Are we going

to get a really bad unemployment report

this Friday? Cuz he's never just talked

about the topline number. And then he's

like, be grateful we're not raising

rates. So, I don't know. I feel like

we're kind of expecting something on

Friday that that maybe says, hey, that

the economy is hot and we should be

grateful that rates aren't going up,

which theoretically should be good for

stons, but stons aren't really happy

because he's also setting us up for a

long wait. Now, I'll explain that in

just a moment. I just want to remind you

that in 2 days, coupon code release the

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do-it-yourself property management, you

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release the files. Uh and thank you to

all those who have been joining. So,

what else do we have? So JPA then gets

into this idea that inflation may

actually take a lot longer to see from

inflation to like from tariffs. So we

might not be able to just say that

inflation is going to be a one-time

phenomenon due to tariffs. In fact, he

once again gives a middle finger to

Donald Trump and he talks about uh the

Donald Trump washing machine tariffs. He

says in 2018 under Trump won we tariffed

washing machines which then you would

expect the prices of washing machines to

go up but that's not actually what

happened. A weird phenomenon happened

which could be defined as corporate

greed and it was that the prices of

washing machines and dryers went up. In

other words, both prices went up. So

what you end up with is what Drum Powell

calls this phenomenon of companies will

cross the street in a group. In other

words, some companies will take

advantage of tariffs and the discussion

around tariffs to raise prices. So

basically, hey, we're having a tariff

sale. Get in before the tariffs. Oh,

prices are up because of tariffs. It's

not our fault. It's because of tariffs.

It's just a middle finger to Trump, but

it's also a way of saying, hey, yeah, in

2018, that is a phenomenon that happened

under Trump tariffs number one. So, he's

not wrong to say it, but he's very

clearly highlighting Trump's uh

uncertainty that is that he's creating

uh in this sort of tariff drama around

why the Fed is going to go slow. Now,

this was probably a pisser for markets

as well because Walter Pal said, "Hey,

look, labor conditions are solid.

Payroll's averaged 150,000 jobs so far

this year. Conditions in the labor

market are broadly balanced." He talked

a lot about how tariffs increase unease

and they delay when we get the data. We

don't know yet how many months of data

we need. You know, everybody thought in

April, okay, we're we'll have our

tariffs in April. We'll be liberated and

then it'll take three months to see the

data and then we'll be able to make a

decision. Well, JF here is basically

implying we might not do rate cuts at

all this year. Why why do it this year?

What's the rush? Let's just wait until

the data tells us what the full effect

of tariffs is. Mind you, we still have

no idea where tariffs are going to end

up because they're still being

negotiated. Literally during the press

conference, you've got Donald Trump

announcing 50% tariffs on Brazil

exempting the aircraft manufacturer

Embrier while at the same time uh

removing the dimminimous expense

exemption which will affect obviously

you know Amazon to some extent, Teimu,

Sheen and some of these other Chinese

players. Sounds like because he's in

discussions with China, he's trying to

kind of like re you know ramp up the

pressure on China a little bit and get

some negotiation leverage on China.

That's what it sounds like to me. But

anyway, you know, JPAL tells us, "Hey,

so far payrolls are averaging 150,000

jobs so far. This is good. I I'm looking

for hints for this Friday jobs data."

The only thing I can get is that he's

leaving a big hint here that something

about that headline unemployment rate is

either going to be really good or really

bad. And you know, that's coming up on

Friday. Maybe nothing changes and maybe

he didn't know, right? But that seems to

be the hint that markets are reacting

to. He also talks about averaging out

GDP that you kind of have to average out

the first quarter and the second quarter

and if you do that you see growth is

like between 1 and 1 and a half one and

1.2% 2% which is way lower than the 2

and a.5% rate where we were last year

for final domestic purchases. And he

sees that as a risk that yeah, look, the

economy is slowing. Banks are happy. The

labor market is happy right now.

Delinquencies are decently happy right

now. They've sort of peaked out. Uh it's

not like they're skyrocketing. So things

seem fine right now. And that gives the

Federal Reserve the luxury of waiting.

Now when he's asked about the two

dissents, because obviously we didn't

cut rates today. We already knew this.

We already anticipated that Bowman and

Waller would descent and that they would

want a 25 basis point cut. Now, we

already anticipated that. That's exactly

what happened. When Powell was asked

about that, he said, "Hey, you know,

they have a different opinion and that's

what you would expect in a time like

this because there's so much uncertainty

and we can't really give you a setup on

the data because we don't know. This is

unique and we're just basically going to

wait."

Not great. Then he also poo pooed the

effect of the big beautiful bill because

he said, "Hey, you know, the reality is

a lot of the big beautiful bill is just

extending tax cuts that were already

previously in place that are just

expiring." And so, yeah, there'll be

some stimulus, but not really a big

contributor. I take some issue with that

because, you know, the capital expense

deduction, the 179 getting boosted back

to 100% is pretty powerful and I think

should be stimulative, but maybe that's

the small stimulus he's talking about.

But the feds downplaying the big

beautiful bill. They're upplaying the

impact of tariffs on goods. This to me

just seems like a war between Donnie.

And now the question is how pissed is

Donnie going to get? Because if Donnie

listened to this stream, which I doubt

he did, uh he'll just get a TLDDR from

like Kevin Hasset or whatever to go like

it's time for it's time for Powell to

go.

You know, that that could lead to some

more volatility in markets. I don't

actually think Trump will ultimately

fire Powell, but this was a this was a

pretty ballsy meeting from Powell.

Again, no setup for a rate cut in

September,

telling us to pay attention to the

topline unemployment rate, something

he's never done before. And he's not

giving us a setup on the data. He's

basically like taking away all of the

thing things he used to give us as

guidance. he's taking away and he's

basically saying it's going to take a

lot longer for risks and data to really

be fully understood and we have no

effing idea. And I think that's why when

you look at markets today, markets are

like crap. We've got uh the, you know,

10-year rising, what is this? Uh 4.2% uh

4.2 basis points right here. We've got

uh the stock market losing the lead. I

mean, this is our uptrend line. lost it

immediately here. Down 25 basis points

now on the cues. Uh so, you know, we'll

see. But obviously market's not very

happy. Uh and so we'll see how this ends

up filtering out through the coming

days. Most importantly now the big

highlighter on that Friday jobs report.

I'll be covering it live. So I'll see

you there at 5:30 in the morning. Make

sure you're also getting your alpha

report every single day sent to your

phone. However you want to get it, you

know, you want Discord, you want phone,

whatever. We'll make it happen for you.

Make sure you get that alpha report. Uh,

sign up at mekevin.com. And remember,

use coupon code release the files

because if there's one thing we all

know, it's that Jerome Powell will cut

rates

before the Epstein files ever get

really.

>> 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 Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.