WOW | Market Tank, Jerome Powell goes DOVISH [Full Fed Explanation]

well drone Powell just canceled

stagflation canceled the recession and

cancelled really any potential of raate

hikes that was the biggest fear that we

had that after a quarter of hotter than

expected inflation data of hotter ECI

data hotter ADP payrolls numbers we

actually got jpow going nah Moon baby

how' he do that how' he do he basically

Unwound some of the most hawkish

expectations we could have had for the

fan he Unwound the fear that we would

actually have higher rates instead his

paths forward are either we stay or we

lower and he gave us a few paths he

actually gave us paths he said there are

three paths more persistent inflation

hold off on rate Cuts greater confidence

in inflation cut unexpected weakening in

the labor market cut but what about

these wage gains I mean wage gains That

Could set off a wage price spiral right

I mean if we have wage gains that all of

a sudden are too excessive we're going

to be back at a wage price spiral right

that would be bad Jerome Powell's take

we're not worried about it we want

people to make more money in fact last

year we saw wage gains that were

elevated and inflation collapsed and we

expect the same thing will happen this

year wow this is way more doish than

expected now the first sign that we were

going to get a doish drone pow today was

that we were expecting to go from $60

billion of Treasury runoffs down to 30

instead we got it go all the way down to

25 that extra five bill was your heads

up from JP that this was going to be a

doish meeting at the beginning of the

meeting I said okay I'm now flipping 60

doish 40% hawkish because of solely

because of that a flip and then

throughout the meeting we got more and

more doish in fact he even addressed our

inflation expectations concern quite

frankly jpow if you're not a course

member yet we'll extend the coupon for

another few hours for you we got McKay

an email will let you come in because

clearly you're you're reading off our

bingo card okay you did a great job you

address basically everything we've been

bitching about on the channel it was

really impressive I mean quite frankly

there was a point it was almost as if he

was reading our bingo card he addressed

both of uh the second half of inflation

should be lower on our bingo card and in

the same box we're talking about the lag

effect of real estate coming eventually

and explaining why there's this lag and

split effected real estate he almost

write it off for bettim so thank you JP

for being a supporter and a subscriber

we love you okay but let's uh in in

seriousness uh you know jpw addressed

three really important things number one

inflation expectations he finally

addressed look inflation expectations

moved up at the beginning of the year

the uh 5-year Break Even level moved up

from January all the way through about

last week we went straight up on

inflation expectations and what did we

end up getting we got Jerome Powell

saying in recent D inflation expectation

uh inflation expectation data sets have

come up on in the shortterm but the

long-term remains well anchored so he

washed the short-term concern

then what about the fact that GDP came

in at 1.6% in q1 well as we expected he

would on our bingo card in fact we wrote

that down as well we wrote down on our

Bingo cart that he would split out uh on

I'll show you the bingo card here uh

that he would split out GDP that some

parts like exports and inventories were

weak but GDP was overall strong almost

read that off verbatim how because he

told us while GDP growth moderated to 1

. 6% in q1 private domestic final

purchases complicated phrase there

excludes exports and inventory buildup

and that level came in at

3.1% which to them sends a clear signal

that the economy is still actually very

strong so washed the inflation

expectation concern washed the rate hike

concern washed the wage price spiral

concern washed the stagflation GDP

concern washed if I didn't say the rate

high concern and then of course we have

the real estate concern like oh but but

you know owner's equivalent rent is

still high yeah it's taking longer to

come down that makes sense Market rents

he says are flat we've seen that in

housing as well Market rents are either

flat to slightly down in most markets

across the country the difference is

people who are already in can't really

realize a lower rent until they move you

know when you move you get Market rent

when you stay in you might be locked in

higher until you actually move move

because sometimes there's a low chance

your landlord's actually going to lower

the rent right so this entire meeting

was Jerome Powell washing fears about

the economy he says uh you know says

look it's going to take longer than

previously expected to lower rates

remains committed to 2% the labor

Market's been softening somewhat but

nothing that's extremely concerning at

this point feels like a normalization in

fact when looking at surveys so leading

indicators of employment he thinks we're

back at prepandemic levels not

substantially weaker uh he says

obviously committed to the current

stance uh clearly you know didn't want

to delve into when rate Cuts will begin

or how many we would get not a surprise

but again the washing of these bearish

factors in the economy was extremely

doish now some people are saying oh it's

doish that maybe he realizes something's

wrong that something's coming but quite

frankly he tried addressing that too

that he doesn't actually see large

damage in the labor market right now

because if he did we would be cutting

rates right now even in the face of

inflation around 3% they'd be cutting to

preserve the labor market uh when it

comes to stagflation he says I was

around for stagflation stagflation then

was 10% unemployment slow growth High

single digit

inflation uh and he says I just don't

see where that is coming from today he

says I don't see the dag or the flation

now I was tweeting during this as well

and updating

eac.gov or uh check out the ec.com page

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and read the information over at

house.com that'll serve as a perspective

right and a solicitation so let's keep

going we've got uh Market implied

interest rate Cuts right now let's

understand some of the movement in what

we're getting in the market we started

this meeting with

1.18% expect sorry 1.18 rate Cuts

expected for the year we ended with 1 uh

37 38 rate Cuts expected for the year so

we actually increased the level of rate

Cuts we expect for this year we saw gold

move up about 1.28% we saw oil drop 3%

we saw 10year treasury yields drop 6.2

basis points and we saw all indices the

Russell the nas the S&P and the down all

up 1 to 2% after this meeting when

beforehand a lot of them were down as

much as half perc like the NASDAQ so

this was clearly a very optimistic

meeting now going through our a bingo

card just to make sure we've got all of

our bases covered here this was our

bingo card we got Bingo across the board

we got the purple High maintain the 2%

Target weakening in jobs could lead to a

sooner cut have not gained greater

confidence yet and he did address that

at least longer term inflation

expectations are well anchored he got

very angry about somebody implying that

politics won't affect us in fact I

tweeted 911 I'd like to report a murder

uh for how aggressively he responded uh

he says we still have a goal of cutting

rates uh sorry he didn't say that he

still has a goal of cutting rates this

year that is something that he said

previously so we did not get that uh we

got the uh split in Immigration jobs

data we got uh split on GDP Jal was on

time we did end the meeting more doish

than where we started didn't get uh too

much detail on why they went for that

extra $5 billion so we didn't get that

didn't get a repeat of question uh we

did get a Nick T sitting next to the New

York Times Blondie uh somebody in the

chat's like she's a valid dictorian I

went to high school with her I'm like

dang uh but anyway stagflation and then

he ended up I wrote stagflation

described stagflation literally did uh

the lag effect of real estate or the

second half of the year should be lower

inflation we got all that got data

dependent and uh basically we got we

believe we're at Peak and he didn't say

specifically that word but that's I mean

he must have made that clear 17

different times it was very clear he's

very opposed to raising rates he's

sending an extremely clear signal here

that yes sta dependent it's going to

take more time optimistic that the

second half of the year's inflation is

going to come down lower so what does

this now put pressure on well this now

puts pressure

on May 15th now what is May 15th could

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it be the expiring coupon code or the

deadline to invest in house no it's the

next CPI report see the next CPI report

just got a lot of pressure

because drum Powell is basically like

look the economy's fine inflation's

going to come down things are good yes

it hasn't come down as fast as we' like

but we think it's coming he got rid of

so many bearish concerns again the wage

price spiral the

stagflation the uh real estate lag he

got rid of a lot of concerns of hiking

these are huge removals of pain from the

economy all of that was really removed

and what he did is he put the onus on

let's just see what happens in the

second half of the year and get these

inflation reports next April inflation

report is obviously May 15th I don't

actually think we have uh reports for

that yet we do think that wage growth

could continue to push up because of

things like what are happening in

California where you're raising minimum

wages as aggressively or the

aggressiveness that you're seeing in

wage gains from unions but quite frankly

there was nothing extremely bearish in

this in fact there wasn't really

anything even slightly bearish I mean

the fact that we're not going to get

rate Cuts in the first half of these

year that is not a surprise it's not a

surprise we're probably waiting until

September to December uh and the fact

that we didn't get punched in the face

here we didn't get JPB is quite frankly

neutral to in my opinion very d uh

dovish which is bullish for risk assets

that's obviously of course why we've

seen uh Bitcoin move up during the

meeting but I'll tell you there's

something about the lines folks there's

something about the lines these lines

are magnetic and so you have a lot of

speculation on that doish going in

during the meeting ran from about 575

all the way to about

594 but look at that drop right back

down to the line and so if you want to

study those lines make sure you're part

of the stocks and site course while I

was live somebody joined the course is

wait we we're going to change the

pricing in a few hours there were just

too many emails um and um what is it

yeah somebody joined the course and the

name they signed up with is

djt like oh man they must be in a djt

stock that's shout out to them whoever

they are uh so there you go that is a

full summary of what's going on with Jal

I have to say this is probably the best

version of jpow you could get uh you

know purple tie on time very

straightforward uh aggressively

passionate about how strong the economy

is now could they be wrong yes but he

the fact that we don't have to so much

worry about wage gains the fact that he

unhelmed that and he addressed Our

concern about inflation expectations I

see that is reasonable bullish and uh

thank you so shout out to jpow he he he

did a he had a very good meeting here so

good job 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 paffrath there financial

analyst and YouTuber meet Kevin always

great to get your

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