SHOCKING Fed Flip **JUST** Happened!

all right this is embarrassing I had a

piece of like cereal or flaxseed on the

tip of my nose like Rudolph the entire

video but I'm definitely not going to

refilm it so you're just gonna have to

deal with it enjoy oh it finally

happened today's the day it finally

happened and it comes on the heels of a

very unexpected move that just happened

it's gonna have huge implications for

the market okay first we're gonna talk

about what just happened because it's

unexpected then after what just happened

we'll talk about why it happened and why

it could be a potential good signal uh

for markets in the stock market so if

you're still still sitting on the side

pretty much in all cash you know you

might want to start paying attention to

some of these things so Jerome Powell

has previously told us one of his

favorite metrics of understanding how

tight monetary conditions are are by

looking at something known as the

10-year three-month treasury curve so

basically 10-year treasury rates are

your longer term expectation for the

economy uh and shorter term uh rates are

sort of your more near-term expectation

for the economy and generally what

happens is when you go into a recession

you see the nearer term which tends to

trade at a minimum of what the Federal

Reserves policy rate is you see that go

up and then you see longer run growth

expectations kind of trend down although

they both tend to move up together you

just kind of get that convergence

between the two as they're kind of

moving up with the base of of the FED

policy rate and so when they flip flop

you get an inversion of the yield curve

and by far the one Jerome Powell cares

about the most is the 10-year three

month curve long term short term and so

when policy gets tight enough to where

the short term is actually more

expensive than the long run growth rate

assuming at least that base of that fed

funds rate then the FED believes that

they have adequately tightened or at

least they've started to add adequately

tighten and this just happened today

folks here it is right here in this

corner we have officially today inverted

we have the inversion of the yield curve

today the important one not the 10-year

two-year you hear about frequently but

this one this one tends to Signal a

little recession is six to nine months

away now I know many of us are like

heaven we're obviously already in a

recession maybe you know what's really

interesting is you're just now starting

to see companies like poulton homes

talking about their buyers for new homes

coming in worried about job loss Google

still hiring people like crazy and just

now saying yeah we need to pull back and

the amount of people we're hiring you're

just now starting to see the start of

some of those real recessionary

pullbacks and Rain ends of of spending

and so this curve which is a very

accurate predictor of recessions that

just inverted could actually help

provide ammunition for a dovish move

from the Federal Reserve in fact take a

look at what the Bank of Canada just did

Banks and economists were widely

expecting the Bank of Canada to increase

its policy rate today October 26 by 75

basis points that's what the market was

pricing in look what we actually got

folks 50 basis points and what's weird

about this is listen to how similar this

sounds to the Federal Reserve check out

that coupon code linked down below it's

the Halloween coupon code sorry okay

pricing goes up after hour you got it

you got to get it in at least once per

video yeah no look at what how similar

this is to the Fed

uh by the way this morning in the course

member live stream we went pretty deep

into into Google and end phase and face

boy oh boy I mean even when we saw the

earnings yesterday just killing it and

the earnings call actually gave us our

first mini red flag uh and we'll see how

that one expands but it's a really

interesting what happened in this

earnings call this morning but anyway uh

that's in the course member live streams

so what how similar is this to the fed

well look at this inflation remains high

and broad-based inflation is being based

on a dis supply chain disruptions Global

inflation though is expected to come

down even though it's broad-based and at

the same time as we have pressure on

inflation and we have Labor shortages we

are seeing an economy that is starting

to slow this is almost verbatim What the

Federal Reserve says Banks or the Bank

of Canada projects no growth in the U.S

economy that's actually more bearish

than the FED no growth in the U.S

economy throughout 2023 and the Euro

area they expect a recession in the

quarter ahead largely because of energy

shortages and China's economy is

expected to grow slower than expected

because of the property Market Weighing

on their growth housing activity has

retreated sharply and spending by

households and businesses is softening

however prices remain broad-based super

similar to the FED right and core

inflation is not yet showing meaningful

evidence that underlying price pressures

are easy I mean I'm telling you this is

and look policy interest rates will need

to rise further this is almost verbatim

Federal Reserve talk here which is

inflation is high and broad-based core

inflation hasn't meaningfully gone down

the economy is starting to slow

businesses are starting to slow even

though the labor market is tight we're

starting to see an inflection point

we're starting to see the housing market

react that is almost verbatim Federal

Reserve and yeah what do they do

rather than going hawkish 75

they go dovish 50. at the time of having

some of the highest inflation with no

signs of it peaking at least in the CPI

data if we look at forward-looking data

like uh commodity prices shipping prices

uh used car prices of course we're

expecting to see some forms of Peaks but

still despite these metrics that they

say they care about so much we're

already seeing a little bit of a dovish

pivot in the Bank of Canada and many

folks believe that the Federal Reserve

is next that they are going to Blink in

the face of inflation that we are going

to see businesses like Google rather

than hiring 13 000 people in a quarter

start slowing hiring so dramatically

that the companies like Google that we

invest in or or that maybe you invested

I don't know what you invest in uh are

companies that ultimately could become

extremely efficient during this

recession as they start cutting expenses

and really focusing on okay let's get

back to growth while at the same time

the yield curve inversion and dovish

pivot from the Bank of Canada somewhat

signals that wait a minute wait a minute

the FED will almost certainly bring up

this inverted yield curve at their next

policy meeting and it could give some

Credence to the idea that hey maybe 75

basis points isn't a done deal for the

FED that would be remarkable because

markets are highly anticipating a 75

basis point hike in fact as of one week

ago we were at a 96.6 certainty of a 75

this point hike after the move from the

Bank of Canada today we've actually

started to see this get watered down a

little bit look at this we're now at a

12.2 percent probability of a 50 basis

point hike and an 87.8 chance of a 75 so

we're still obviously leaning towards 75

but we've got a whole another week to go

now that's not like really remarkable

one week in the grand scheme of things

is relatively nominal but we've got

another labor report and a Fed meeting

coming up very very soon uh the FED

meeting is next week on Wednesday the

labor report actually comes out two days

after that because it's the first Friday

of every month with the exception of

sometimes when it lands on the first

then sometimes they do it sometimes they

don't depends on how their data

collecting is going but anyway we've got

a Fed meeting a week from today

where we're going to see 75-50 if they

go 50 next week oh I think we're going

rally mode now they're trying to prevent

rally mode that's why we saw that Wall

Street Journal article where the Federal

Reserves like ah we want to keep things

tight but we don't want to create rally

mode but even with the Bank of Canada or

probably because of the Bank of Canada

it turned dovish what did we end up

getting from the yield curve inversion

and this means that the federal

reserve's job is finally starting to get

to the point where okay they've

tightened enough they've battened down

the hatchet is enough to where they've

got enough of a grip on the market to

slow it appropriately to actually bring

inflation down meaningfully over the

next couple years of course we do expect

a 15 to 25 housing correction to come

out of that again that's why I'm

starting my startup house act we do

expect that they're going to be big

opportunities for you to go shopping in

real estate even if for yourself if

you're not investing with House High

just make sure you get educated like on

my programs I'm Bill building your

wealth through zero to millionaire or

the do-it-yourself property management

and Rental Renovations group check that

out link down below and ultimately most

important is there is a a very real

possibility

that we could start seeing some real

rallies in the stock market if we do end

up with this dovishness coming through

over at the Federal Reserve now that

would come as very welcomed since

certainly we've been through one hell of

a time already but it's not to say that

the worst is over I have to say if

there's ammunition for the FED to go

bullish or or should I say dovish they

go devish repairs this this is good

ammunition so this is good I'm happy

about this now if you're just somebody

who reads the titles and you never make

it to the end of the video well you

probably have no idea by actual thoughts

oh well they're a loss all right folks

thank you so much appreciate you coming

back and we'll see in the next one

goodbye