The Fed is now BLUNTLY *LYING* to our FACES!

this is the first time I've read minutes

from the Federal Reserve that actually

made me feel like they are blatantly

trying to cover up their real concerns

now obviously they're telling us them in

the minutes but I frankly think that's

because they recognize the vast majority

of people just aren't going to read the

minutes in fact if as usual we just

refer to what the mainstream media is

telling us about the FED minutes what do

we find out we hear oh fed to consider a

gradual cooling of interest rates in

other words they're kind of sending the

signal ah maybe the f cut in December

maybe they won't but the FED feels like

things are broadly balanced well yeah

that is the impression that you would

get if you go to page 13 where they say

all members agreed that the post meeting

statement should affirm their strong

commitment to both supporting maximum

employment and returning inflation to

the committee's 2% goal great but that

statement implies that the risks to

employment and inflation are

balanced but that is a complete lie

compared to what they're actually

telling you in the document if you go

through and read it I'll try my best to

start with the juicy stuff so we're

going to start with page eight and we're

going to go in order here of some of the

juice first while the staff reduced its

assessment of the downside risks they

recognized that the incoming data could

be heavily skewed and that although

labor market conditions today remained

solid it was possible that the easing in

the labor market seen over the past 2

years years could give way to a more

pronounced slowdown in economic activity

this is a red flag this is already the

Federal Reserve telling us uh you know

things might get worse here and they're

not talking about inflation either

they're specifically talking about

employment why because in the next line

they say the risks around the inflation

inflation forecast were seen as roughly

balanced no extra commentary on

inflation there pretty much solely

commentary on how all of a sudden labor

could rapidly decline and this is what

fed ghoul warned us for as well he and

we just landed here he warned that once

you have a beginning of a downturn in

the labor market it's really difficult

to work your way out of that so I want

you to tell me if these fed minutes

sound balanced because remember at the

end they're like oh yeah let's just tell

everybody everything seems balanced but

that's not what they're saying in the

actual document listen to this

participants cited various factors

likely to continue downward pressure on

inflation including waning business

pricing power folks every single day in

the market open live stream in the

course member live streams where we're

reading earnings calls I keep talking

about how everybody's peee is going soft

no business has good peeee right now

it's everybody's got weak pricing power

small it's all it's all this is like the

greatest shout out I could possibly ask

for the Federal Reserve literally says

including waning business PP when are we

going to get to the waxing phase I don't

know but but anyway the committee still

restrictive monetary policy stance as

well as well anchored long-term

inflation expectations in other words

not worried here about inflation because

pricing power is super weak right now

some other comments on this they talk

about what about those month-over-month

movements that we see they call those

movements volatile and they expect those

to remain volatile and that incoming

data should generally remain consistent

with inflation returning sustainably to

2% notably in both core goods and

non-housing services categories price

prices were now increasing at rates

close to those seen in the earlier

periods of price stability we are also

receiving corroborating reports from

business contacts that firms were more

reluctant to increase prices as

consumers appeared to be more price

sensitive and increasingly seeking

discounts yeah Black Friday is going to

be a big ta a lot of people wondering

what are those coupons going to be for

Friday anyway and everybody knows I'm

the king of coupons anyway uh some

participants remarked that although

increases in Housing Services prices

remain somewhat elevated they continue

to expect that these would slow with a

subdued pace of rent increases faced by

new tenants eventually reflecting in

Housing Services pricing so in other

words think about this they're telling

you oh yeah things are mostly balanced

then they have a whole page talking

about how good things are inflation how

things are basically like they were

before the pandemic and oh wait what

were they before the pandemic below 2%

remember they had to do flexible average

inflation targeting to make us think

that they were going to try to have

inflation at 2 % because we kept running

at 1.7% because inflation was too low

and at the same time they're like oh

things can get really bad in labor

really really quickly and even though

things are good in labor right now that

could flip really really faster uh we're

also lowering our 2025 to 2027 real GDP

growth Outlook uh but don't let anyone

uh say anything about that uh we uh uh I

just locked myself out that's a very

inconvenient timing uh standby for uh

commercial uh intermission as I get into

this get yourself life insurance in as

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slife over okay uh moving on so then

listen to this wage increases were

unlikely to be a source of further

inflationary pressures which by the way

was also remarkable because they were

talking about how people when it comes

to getting jobs are basically like look

I'll uh I'll take whatever work

Arrangements you want and I'm willing to

take a more moderate wage they literally

said some participants reported that

businesses were becoming more selective

in hiring as they faced larger pools of

more qualified applicants and job

applicants more more more willing to

accept less accommodative work

arrangements and more moderate wage

offers participants generally noted

however that there were no signs of a

rapid deterioration in the labor market

conditions with layoffs still remaining

low and businesses preferring to use

attrition that's for now but what

happens when the layoff strike in Jan

they talking about how not just

businesses are having smaller PPS but

people are having less pricing power

smaller PP at the people as well the

humanity it's a terrible uh but then

when it comes to talking about data

that's actually potentially worsening

listen to this in discussing labor

market developments participants

generally viewed recent readings as

consistent with labor market conditions

remaining solid okay that sounds good

right but wait a minute although labor

strikes and devastating hurricanes had

been important sources of temporary

fluctuations in the data particip

continue to site declines in job

vacancies the quits rate the turnover

rate as consistent all as consistent

with an easing and labor demand and

businesses becoming more selective as

they faced a larger pool of more

qualified applicants participants

generally noted no rapid sign of

deterioration yet again because they're

preferring attrition over layoffs at

this point however and this is the

interesting part there goes Southwest

this is the interesting part

the Federal Reserve continued to be

challenged with difficulties in

measuring the effects of immigration on

labor Supply revisions to data there's

that Sout shout out remember the huge

revisions we had to data over the two

months uh August and September terrible

revisions that basically brought us from

a a pace of over 200,000 job gains per

month first 6 Months of the Year down to

about 100,000 jobs uh per month for the

last three months which is a massive

decline but anyway listen to this they

talk about the effects of natural

disasters and labor strikes among the uh

factors complicating the evaluation and

the assessments for Outlook of the labor

market currently being associated with

quote considerable uncertainty and the

agreement that labor market indicators

merited close monitoring notice how

they're not saying that about inflation

they say nothing about inflation when it

comes to close monitoring indicators

potentially creating elevated risks lab

additional risk that quote the labor

market could deteriorate even further

though many participants see an

excessive labor cooling as having

diminished potentially since the

September meeting it still is an

elevated risk but wait a minute the risk

diminished since September hold on a

second what happened in September oh

that's right we had 785,000 gains in

government workers likely polling

workers we already adjusted out the

seasonal jobs for uh teachers instead

somehow we had a 785,000 job increase

for uh uh uh you know seasonally

non-seasonally adjusted excuse me

workers for the government which is

crazy because if you removed government

workers we would have been negative in

fact even if you go to October we were

at negative 27,000 private payrolls if

it weren't for government jobs we would

have had a negative report of course

government jobs are going to go up

before the election and you can't

seasonally adjust that because that

happens every four years as opposed to

every single year so

using that data they suggested oh okay

well you know maybe the risks have

diminished somewhat because uh you know

numbers weren't that bad in

September so you're getting this really

weird messaging here where the Federal

Reserve on one hand is saying um you

know everything's good on inflation we

do have problems with labor things could

get really bad with labor let's talk

about how good inflation is and how

uncertain and how bad things could get

with labor but then remember at the very

end of all it let's end with uh let's

just tell everybody in the statement

that things are mostly

balanced in addition to that they

briefly mentioned how lower to moderate

income households were having more

struggles this is old news higher credit

card delinquencies although Auto

delinquencies slowed a little bit and

Commercial Real Estate actually seeing a

little bit of a moderation maybe it's by

the dip time for commercial they're

suggesting that you're sort of seeing a

bottoming out of the pain in commercial

maybe house hach needs to start a

commercial fund

uh remember go to house act.com if you

want the 5% convertible that ends

December 13th uh but otherwise other

than that the Fed was pretty

straightforward and trying to punt any

responsibility of issues couple

participants remarked there was

considerable uncertainty about the

durability of recent gains in

productivity due to potentially

transitory factors uh such as shorter

term productivity or artificial

intelligence how long is that

productivity going to last we don't know

we also noted some signs of

deterioration

uh uh lessening in commercial real

estate I just mentioned that and uh

that's it so if I had to summarize this

uh in 10 seconds I would basically say

fed inflation is cured we have a lot of

problems on labor but let's tell markets

that everything is fine on both

inflation and labor and that those two

risks are balanced even though we're

just going to talk to you in the fine

print about how good everything is in

inflation and how bad everything is in

jobs it's all good and there you have it