**Watch BEFORE 2pm Eastern! Will the Fed Crash the Market?**

hey everyone me kevin here we need to

talk about the fed because the fed could

literally destroy

the market uh well you might be watching

this tomorrow so i should just say the

date

on wednesday march 17th which is almost

one year to the date almost the bottom

of

the market march 23rd of 2020 when the

market was

totally in the big old doldrums and

things weren't pretty good

on march 17th last year either okay

because march 16th was one heck of a

sell-off

but the point is the federal reserve

could do some serious

damage to markets tomorrow and i'm not

happy about it and i'm not very

enthusiastic

there is a reason why i have not sent a

single freaking buy alert to my course

members in the stocks and psychology and

money group

in seven days now which is a long period

of time for me not to buy stocks

that's cause i'm loading up on that cash

cause the fed could be pretty nasty

tomorrow

there are two big catalysts that we're

looking for

tomorrow all right let me first explain

details here as well the federal reserve

chairman jerome powell will be speaking

at 2 30 p.m

on a march 17th and he will be

discussing the outcome of the two-day

policy meeting

the fomc federal open market committee

policy meeting essentially they'll be

discussing the results of those

federal reserve chairman jerome powell

will give a prepared statement

and then he will answer questions for

about 45 minutes what jerome powell says

or

does not say during this discussion

and initial speech will not only be

picked apart

word for word but could make or break

the market tomorrow

the market's already very tenuous and we

saw that today here on the 16th

we saw a lot of tenuousness in stocks

and i mean look we had a good open

but after the first hour here on tuesday

the market just started selling off

because it's like wait a minute

tomorrow's fed day

it's almost like the suits woke up and

they're like oh yes ducks are doing good

jerome powell speaking tomorrow sell

everything

like seriously like it used to be don't

fight the fed jerome powell this

savior is coming out to speak now it's

bad

and it's all bad because of what

happened last time around

and that was when jerome powell spoke a

couple thursdays ago

on an interview and he was asked hey

bonds bond deals just skyrocketed they

shot up

at the fastest velocity we have seen

bond yields go up in over 10 years

what are you gonna do about it mr powell

and remember the stock market's like

dude you've been here for us every day

so far you keep bailing us out like what

are you going to do for us this time

uh we're worried about inflation coming

like please assuage our fears of this

inflation coming

and jerome powell's like everything

appears to be operating normally here

we want inflation we're trying to get

interest rates up we're trying to get

rates to two percent or trying to get

inflation to

two and a half percent we're not

planning on doing anything now but i

mean look if

bond yields are going up because they

think there's going to be inflation cool

sweet i'll write that off my list

success

and the stock market lost it lost it i

mean

we had the bloodiest thursday and friday

uh in this crash that we had over the

last month here

because of powell now obviously we could

say we've had the greatest run in over a

year

because of powell and the money printer

but what jerome powell says or does not

say tomorrow

is going to potentially amplify in

either direction

what happens now i have expectations

we'll talk about those expectations but

let's make the two catalysts very simple

catalyst number one is jerome powell

making a statement about anything that

could affect

yields if jerome powell says hey

standard leverage ratio or standard

liquidity ratio over the banks we'll go

ahead and extend that we'll let the

banks have less money on hand

and uh you know what we'll just um

extend the cares act program that

expires at the end of this month which

lets banks have less cash on hand so

that they have more money for

for potential losses or issues that come

up if

fed chairman jerome powell says hey

we're cool with you having less

cash on hand that means banks could

potentially buy more bonds yields come

down market's happy

if we see any kind of yield curve

control

where the fed says you know we're going

to start buying some longer-term bonds

we're going to buy instead of maybe 10

years we're going to buy some more 20 30

yields

that has the effect of pushing down

long-term rates which is a form of yield

curve control

the market's going to cheer that the

market is going to cheer

anything that implies additional

liquidity or lower rates

that will be very very good for the

stock market it certainly will be very

very good for tech stocks

unfortunately i don't think that's going

to happen now there is a second catalyst

but let me talk let me finish the

thought here on on problem or catalyst i

should say number one

and give my opinion on it on catalyst

number one

i don't expect catalyst number one going

any differently

from what we had two weeks ago and that

was fed shared jerome powell going look

money's flowing markets are working if

yields are going up we don't

we don't see a problem with that or if

yields are going up we don't see a

problem with that in fact

uh we'll you know if we think inflation

is getting out of hand or something

we'll do something about that

but we don't think there's going to be

inflation we think we're going to have

temporary spikes due to base effects

comparing to a year ago

and temporary spikes due to a reopening

but we think those will be transitory in

nature he'll say

they'll say we don't see persistent

inflation happening

we think money markets and you know

liquidity is operating

as intended we don't think the banks

need

uh to have these low reserves anymore

because they're writing off less losses

i mean this was something i just covered

all eyes look at this

look at this you think the fed

is going to be nice to the banks after

this on page one of the wall street

journal come on folks

banks i cash reserves for profits

u.s banks are sitting on a pile of cash

that could turn into

billions of dollars of profits you think

jerome powell is waking up on tuesday

going

banks need help no my expectation is not

good for tomorrow for you know when when

chair powell talks

because chair powell is not going to

give the market what the market wants

the market wants some more cheap simi

you want some more print money let's go

come on just just one more hit just one

more hit come on please one more hit

it's what the market wants market's not

going to get it tomorrow and that's why

we started selling

off today i really believe that fed

chair pedro powell

is literally gonna do nothing he's gonna

let this bank thing expire

he might not even address it i think

he's going to get asked about it

and if he gets asked about it i wouldn't

be surprised if he just blows it off and

says ah we haven't determined yet

that's gonna be a blow off it's gonna be

like march 30th and they're just gonna

let it expire

i wouldn't be shocked they'll just kind

of let this bond thing play out and then

they'll just let that bank

uh slr expire wouldn't shock me

whatsoever i mean that's what i would do

if i were chair powell and i were

reading this stuff in the wall street

journal and probably doing research to

reiterate the same thing

and it's true banks didn't lose as much

money as they thought they would lose so

they got plenty more cash they set us a

bunch of money aside for a rainy day

and they didn't need it so

i don't think banks are going to be

happy uh you know

and i think everybody's kind of

expecting that i don't think

they're going to institute any kind of

yield curve controls because

what is happening with bond yields going

up is literally what the fed wants

they want this this is good for them

and the auctions are going fine there

was a panic initially with how quickly

the yields went up but

the auctions are going fine there's

enough balance the supply and demand is

right the fed doesn't have to change

anything

so not expecting change it's just going

to be bad for tech

oh well maybe a buying opportunity again

the second catalyst okay and this is

potentially a bigger one because we

already have this strong expectation

from the last time jerome spoke

that nothing's gonna happen okay so

what's the second possible thing

what else could fed chair screw up

tomorrow

you know sorry i don't want to come

across too blunt but oh well i am

something called the summary of economic

projections the scp

notice what it says here for release at

2 pm

eastern time december 16th 2020. this is

uh this is what the fed does when they

release these

they have these uh documents embargoed

until exactly 2 p.m well we got one

coming up

tomorrow which you might be watching

this on the 17th so today

at 2 p.m eastern time it's the same

thing and they are on time

these people are sharp this is not like

biden or trump

taking 30 minutes to show up because

both of them are late

all the freaking time to their events

this stuff shows up on time

they're on point and there are two very

important pages that we have to look at

page of importance number one is the

change between the last summary of

economic projections

in the next one so for example

what we're looking for is any kind of

change that could signal the fed is

interested in moving

rates higher let's go ahead and just

erase all this jibber-jabber that i

wrote on here from the last time

let's grab a little highlighter here and

let's do a little bit of highlighting

so the this this summary of economic

projections here

from december indicates that the fed

believes we will have

gdp growth of 4.2 percent and that we

will

end up in 2024 plus with 1.8

growth if the fed increases

their projection if this number goes up

if this number goes up

then it's possible the fed's thinking oh

the economy is doing much

better than expected which is something

i do think the fed is going to do

and that number goes to 4.5 or

5 or 6 percent people are going to

perceive that as

oh oh fed thinks growth is coming back

faster that means they're going to

increase interest rates faster it's that

simple and the market's going to sell

off

it already is because of this

expectation if the unemployment rate is

expected to be

below 5 in 2021

it's gonna change expectations people i

think the market might sell off

especially to attack again

if uh we see the unemployment rate in

2022

go under four percent oh you better

believe when that unemployment rate goes

under four percent people are going to

think that's it the fed's raising rates

sooner

and tapering remember there are two

things the fed could likely do they

could begin

tapering their bond purchases sooner and

then they'll eventually raise rates

and the stock market doesn't like the

idea of that even though this is all a

bunch of bull crap short term

crap thinking it's not like i want to

sell out of the market and not be in the

market and not be participating

in the market just just because oh over

time yields are going to go up again

and interest rates are going to go up

again i don't care bring it on i'm still

going to invest in train america

but anyway inflation going up or i'm

sorry gdp going up

the unemployment rate going up and

certainly inflation expectations which

the fed

fed's measure is the pce here any kind

of increase in these figures here

is absolutely going to make people

nervous that oh the fed's going to taper

sooner

and then interest rates are going to go

up so this is a very very very

very certainly over here but we're not

going to see any change down here

they're not going to

clearly signal oh yeah we think interest

rates are going to go up over it's i

don't

expect to see any change down here the

biggest changes we see

are really going to be in this box right

here so you got to look for this page

table 1

economic projections of the fed reserve

board very very important

keep this in mind my timeline this is

kevin's timeline

okay now and i believe between

now and rates going up

is 18 months but

now gets delayed by the start of taper

so let me explain that the day the fed

starts tapering bonds the day they say

hey instead of buying 120 billion

dollars in bonds every month

we're gonna buy a hundred billion we're

gonna put less

money into the market we're gonna print

less money then we're gonna go to 80

billion then we're going to go to

60 billion the day that happens i think

we are 18 months away from rates going

up

now the fed has told us they will tell

us quote and they're going to say this

again tomorrow

they have told us regularly we will tell

you well

in advance of any kind of tapering so i

don't

actually think tapering is going to

happen tomorrow

which would start that 18 month o'clock

where maybe we see rates go up in 22. i

don't see that

but a way that the fed can start

signaling things to us

is this table folks this table right

here

this is this is where the money is right

here that's gonna be a big change

uh the next thing we're gonna look at is

we're gonna look for the dot plot right

here

and so this dot plot says that uh

these are sort of people on on the board

at the federal reserve and they get to

determine hey what do we think rates are

going to be in the future so what's kind

of cool here is you can add these up

right

now 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

16.

so you got 16 dots here uh and

everywhere there's a dot it says oh okay

so two people think rates should be

three percent

in the long run it just says longer one

which is really 20 24 plus right

two people think that you know one

person thinks 2.75

a bunch of people think 2.5 and one

person thinks 2.0 right so pretty much

everyone's pretty heavy on on being at

that 2.5 level

but look at this you've actually got one

member saying no no we should raise

rates in 2022

and you've got uh five members who say

no no no we should raise rates in 2023.

if all of a sudden this gets a whole lot

more crowded

and we and this could this could spook

the market and we start seeing something

like uh

you know we uh you know we start seeing

something like

this here

you know and then let's go ahead and

jump in here and uh

you know we'll take out a little three

dots so we had over here

there we go so we start seeing something

like that

you better believe the market's going to

go

that time pretty there's a reason i

haven't bought stocks in over a week

this is the dark time now look

if the fed surprises us and we don't get

nastier expectations uh you know

we we don't get you know we get the

constant reassurance that everything's

okay we're not gonna taper for a long

time

we're not worried about inflation our

projections haven't changed our dot plot

hasn't changed

the market might do okay i think it'd be

flat to a little bit positive i think

the market would skyrocket

if the fed came out and said oh banks

we're going to give you more

uh you know more latitude to to have

more cash we're going to

print more money and buy more bonds or

we're gonna do yield curve controls

if that happens the market will

skyrocket in my opinion i think we get a

skyrocket

i think there's like a 10 chance of a

skyrocket in fact let's go on record

here something that a lot of people do

not like doing

but i don't care it's what i think and

that's why

i think you come to this channel i think

there's a 10

chance of a shocker

excuse me market skyrockets i think

there's a

we'll say

65 is that fair

no i'm not that now no the next two are

pretty close okay

so i'm gonna go let's go to the worst

case scenario here

like really good projections and and a

big rate increase here right

so big crash crash like

last week uh or this is really like two

weeks ago right so two weeks ago fine

crash like two weeks ago let's give

that a 35 chance of happening uh that

means i think there's a 55 percent

chance of just a flat

and uh soft market after jerome speaks

today

all right well whenever you're watching

this on the 17th so those are my

thoughts uh

and we know what to look for so we know

what to look for

we know these thoughts what am i doing

with money i'm

building up as much cash as frequently

possible

to keep margin as low as possible i'm at

about 30.1 percent right now

obviously if stocks go up my margin

outstanding goes down which

would be great but i'm not going to rely

on that

so i'll have to really see a sweet

opportunity to go buy now if we get a

crash

that 35 thing happens and we get a big

sell-off again

tesla goes under 600 again you know what

i'm doing

uh and i might actually add to some

opportunities then too i might

i might add a few new stocks that i want

to get into but i would have to

i'll wait for a discount to get into

those i'm certainly not going to get

into something that's uh that's up

substantially

and uh is and while the fed's behaving

the way it is right now

so i'm gonna be a little more cautious

because these next three months

could be problematic so keep that in

mind if you want more of my uh sort of

guidance psychology thoughts and

opinions

uh i feel like i do some form of

discussion like this

regularly uh with course members almost

every day in the live stream i guess

sort of a summary of here's my feeling

today this is what i think is going on

in the market

check out that coupon code we expire we

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there were so many requests for that get

38 off use that coupon code hotel and

folks

see you in the next video thanks for

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watching

you