The Fed & Powell **JUST** U-turned AGAIN!

well there we have it Jerome Powell did

not cut rates today we are now stable at

roughly an average of about 4.3% on the

FED policy rate and while we've made

progress towards that 2% in the

commentary Jerome Powell did remove the

phrase made progress towards the 2% goal

from the letter or the statement that

comes out now he says that's because

they got rid of the from the prior

portion of the year because now they're

in January and they're not comparing to

the first half of the Year anymore right

uh so he's kind of like walking back

don't worry don't worry the reason we

removed the term we've made progress to

our 2% inflation goal is

because we were just comparing to the

early part of last year there uh but I

think the big takeaways here and we'll

go through some of the other details

here as well but a big takeaway big big

big one is that we actually started

getting Dron pow walking back what

happened on December 18th now if you

look at the stock market since December

18th it's been a little bit more tenuous

and part of that is because hedge funds

have been starting to degross after the

December 18th meeting because a lot of

people were comparing December 18th to

December of

2021 basically what they were doing is

they were saying whoa first of all for

two months in a row Jerome Powell's like

we're not going to consider tariffs in

our policy we're not going to consider

tariff Cent our policy and then all of a

sudden in December you get Powell and

gang going yeah we consider tariffs in

our policy and that's why we think we're

basically closer to a pause and a lot of

Institutions freaked out over this and

thought wait a minute that's the

opposite of what you said two months ago

now you're flip-flopping this is bad

let's get rid of Leverage let's sell

some stocks and let's take some risk

away but Jerome Powell really walked

that back today he basically told us

that so far they haven't seen much of

anything on tariffs which is true we

haven't had any actual tariff start yet

and the president was inaugurated 9 days

ago we have not seen any tariffs yet

we've had talk we've had threats but so

far no tariffs so Jerome pile's right

about that in saying we haven't seen

much yet and so right now we're just not

going to anticipate any kind of actions

from Trump and we'll just take it as it

comes so basically we're going full

circle here we're going from we're going

to take it as it comes to oh we're pre-

pricing in tariffs and we're going to

tighten down the hatches so to speak uh

to yeah we're gonna take it as it comes

it's a full freaking uturn again we just

went three into a 360 degree circle but

honestly the stock market kind of likes

it it's it's a good thing I mean if you

look at the cues this is when uh drum

Powell really came out to start speaking

we got uh our statement came out right

about here this is where our statement

came out so straight down until Dron pal

started yapping when jpow started

yapping within about two minutes of him

yapping it went up continued up stayed

up so in other words markets are pretty

happy with what we got from Dr Powell

today that is big pulling that back

something else that was pretty big is we

actually got a a solid acknowledgement

from Jerome Powell that if the

unemployment rate uh or sorry rather if

we ended up getting layoffs then we

would likely see the unemployment rate

move meaningfully up now the good news

is we don't think we're going to get

layoffs we're not seeing layoffs right

now but it is possible that we end up

seeing layoffs uh and they would

substantially move the unemployment rate

this is something that Jerome Powell

made pretty clear uh he says we're we're

in a lwh hiring environment and

therefore as soon as you see layoffs

we're going to see a meaningful move in

the unemployment rate up that would not

be so good and to that though he says

we're not seeing it now and we think

we're going to end up seeing uh uh a

stabilization essentially of the labor

market to where we don't have to so much

worry about it which is kind of good now

when it comes to inflation uh he

reiterated some of Nick T's numbers that

hey we're basically uh on on standby in

terms of um of of watching inflation

come down that we're in a place where uh

the pce levels are sitting much like

Nick T said uh sitting at about 2 .8%

over the last 12 months the

recalibration they've done has enabled

them not to be in a hurry that inflation

is somewhat elevated but they're kind of

happy and this is really what you wanted

from Powell today you didn't want Powell

today to suggest that rates were on the

table rate hikes were on the table he

didn't mention it in fact if we look at

our bingo card today for sort of

expectations versus reality take a look

at we what we got uh we didn't get any

comments about will you resign uh uh he

basically uh said he's not going to

respond to the political questions uh he

did start with good afternoon and had a

purple tie but again that doesn't matter

and J you know Smiley act from The New

York Times wasn't actually there he was

on time he was actually asked about an

AI bubble bursting uh and he said hey

yeah valuations remain high on almost

all metrics right now including or

mostly on Tech and uh artificial

intelligence uh he some what alluded to

deep seek though we didn't get too much

on deep seek uh on deep seek we had uh

some sort of reference to we're all

watching it but it's really the macro

impact that matters uh he said higher

rates are probably at the moment holding

back housing and that while they control

the overnight rates they're just

watching the longer term rates uh he

does say that uh when asked about a

bubble that households are in pretty

good shape household or banks are in

pretty good shape and that he supports

the innovation of crypto in some kind of

regulatory framework so that people are

understanding of what kind of investment

they're getting into now we've talked

about this as well regulation coming to

crypto how you can have two different

types of crypto one that's regulated one

that's not just so you could really read

like an S1 or some kind of perspectus

Jerome Powell actually reiterated to

that today it's almost like he watched

my video on it I know I'm just patting

myself on the back there but anyway uh

you know he says crypto activities

probably don't belong in inside side of

banking in the sense that if there's any

risk they they could potentially

jeopardize FDIC insurance but uh as far

as serving customers who uh invest in

crypto he doesn't see a problem with

that he's Pro Innovation and encourages

that as long as people understand the

risks and have some kind of perspectus

hey this is great and maybe regulation

can help that happen he says the the

quote by the way on that headcount

reduction on the unemployment rate going

up was if you saw headcount reduction

AKA layoffs you would see the

unemployment rate go up because the

hiring rate is low now this is just sort

of like a problem that I personally have

with markets right now because I think

that you have a PO that today says hey

everything is fine there's no problem

but what you what you sort of have to

balance is this issue of okay well from

an economist point of view just not

political just from an economist point

of view what you have is tariffs

restrict growth government hiring

supports growth but we have a government

hiring freeze so that doesn't support

growth right government jobs that are

not needed are kind of like Universal

basic income in my opinion I made that

argument this morning with course

members like if somebody's at their

government job and they're not doing

anything it's kind of like they're

getting a stimulus check right and that

is inflationary that is stimulating uh

it stimulates the economy okay fine does

that mean it should be done no I'm just

saying it leads to more consumption and

more inflation it creates demand

basically induces demand removing that

makes the government more efficient yes

and it makes the government more

responsible but it's actually counter

stimulus think about that you lay off

government workers who aren't doing

anything

anyway you end up having what counter

stimulus so remember that uh you've also

got um uh AI capex spending potentially

to slow you know give it six months to a

year you'll see it slow down pricing

power companies going down you know

Starbucks just yesterday minus 4%

year-over-year comp sales now the

Stock's going up on hopium that the

Chipotle CEO is going to you know be

able to do some really cool things but

but the point is you are seeing all of

these ends of a candle so to speak

burning and and slowing the economy

eventually now Jerome Powell doesn't

really acknowledge these and just sort

of says eh if we see those become a

problem we'll cut my concern is that

that sort of cutting will end up being

too late uh because really the upsides

of a trump Administration like cutting

regulation fiscal spending tax policy

tax cuts and all that that stuff will

take time uh and time is something that

an economy that's on the doorstep of a

recession a deflationary recession at

that generally just does not have but we

didn't really get much from the FED

Beyond uh a shout out uh for the meet

Kavin courses over at meetkevin.com

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reports included for free text email

everything uh I did take your

suggestions though and stocks and psych

and trumponomics will be getting uh that

Alpha report and uh we'll see we might

have a monthly option as well for people

who just want the alpha report but I

suspect it'll be cheaper for you uh to

be part of the courses so take advantage

of that before the prices go up uh as

far as the economy Powell makes a clear

look we're 100 basis points lower so

we've loosened and but we are still

meaningfully restrictive right now so he

actually does acknowledge that the

economy is still getting compressed

somewhat by rates but then on the flip

side says GDP is fine the economy is

fine growth is fine jobs are fine we

just need a little bit more progress on

inflation and everything is fine this

kind of the way he came across he also

watered down uh fate again flexible

average inflation targeting suggesting

that that was really only designed for a

moderate overshoot of

inflation and uh other than that uh we

had some immigration commentary now on

immigration this was interesting he

actually talks about how Donald Trump

has uh first of all had had no contact

with Powell so you know everybody's been

sort of worried about the potential for

uh Powell to get fired or threatened by

Trump to lower rates so far there's been

no com contact between the two uh and uh

Dron Powell said flows across the border

have decreased very

significantly he actually sees that as

potentially a way of uh tightening again

the labor market which could keep the

unemployment rate low now this depends

though because e and he says this he

said even though you have less or fewer

people coming over you are in a

situation where you also have less new

jobs being posted so you kind of have

them moving in coordination and again

this is where we have to be careful

because if layoffs start happening even

though we say downside risks the labor

market appear to have Abad and inflation

is trending down we don't need to be in

a hurry if layoffs start we will will

see a rapid increase in the unemployment

rate to a little hiring uh and uh and

will probably cut a lot faster so to me

bottom line out of all of this I think

that this is probably as bullish as you

could have had Powell you had no warning

that uh we were going to have a market

uh that should start preparing for a

rate hike which I don't anticipate

anyway I thought was kind of ridiculous

that the suggestion of it but a lot of

people on Wall Street were worried about

it so I brought up uh but uh it's

definitely the wrong direction my

opinion where uh markets seem most

focused now is going to be on earnings

and I'm actually not an earnings bear I

kind of think there's a there's a good

chance we end up having really good

earnings I mean we've got Facebook

coming out uh in a little bit we've got

Tesla coming out in a little bit

Microsoft who knows maybe this will age

like milk uh to say that but uh I don't

think you're I think you're going to see

record profits at some of these

companies and I don't think you're going

to see them say that deep seek is bad I

think you're going to see them say that

deep seek is uh actually in uh you know

something that's going to drive

efficiency and drive earnings per share

and this is a good thing for for

Facebook and for meta and everyone else

welcome Steve to the chat you'd be uh

you'd be happy to know that we're now

using a Adele Uh 4x4 computer screen you

have to watch this morning's course

member live stream to see about it but

anyway uh to see which one but anyway we

did not get fed Bingo and uh that's what

we got on the FED today so I would say

overall bullish uh in that it really

just kicks the can down the road and now

you just have to see what is the impact

of potentially uh any other Black Swan

uh a further uninverted yield curve you

know that 50 to 90 range and of course

what we get through earnings I I I have

a hard time thinking that earnings for

Q4 are going to be bad but I also don't

think we're in a place where we're going

to see data that says the bond market

should see higher rates anytime soon

which does mean I I you know there's a

chance in the 80s here tickers like TLT

might be closer to their bottom uh but

then again who knows you know

everybody's been trying to look for a

bottom including myself for a long time

on TLT and it just kind of keeps going

down so we'll see but it just doesn't

seem like we have new inflationary

effects and I do think it's interesting

that Powell specifically mentions that

uh we haven't seen much in the way of

tariffs yet that's pretty bullish from

the bond uh POV there so uh that's what

we have on what your own pow said today

do 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 PA there financial analyst and

YouTuber meet Kevin always great to get

your take