A Key Part of the Fed *JUST* Flipped.

is it possible the FED could pull a

March of 2020. remember what they did in

March of 2020 they came out on a Sunday

and cut interest rates two percent they

didn't indicate beforehand that they

were going to cut interest rates they

just did

which is somewhat similar potentially to

what we could face coming up just

consider the fact that right now the

fed's got to keep the mask on of we're

hiking hiking forever keep strong strong

they could u-turn on a Sunday just like

that and I want you to keep that in the

back of your mind as you listen to me

give you some updates about what Mr

Bullard just had to say James Bullard of

the St Louis Federal Reserve has

flip-flopped in this video I'm going to

break down what he just said in an

interview and how it builds into the FED

narrative that we're being fed and told

and what should we believe let's Analyze

This in detail hey everyone meet Kevin

here I'm a licensed financial advisor I

run an actively managed ETF and I sell

programs on building your wealth link

down below we are changing pricing

tonight so if you want to join me on a

shadow day or you want to check out

those programs and join me in the live

streams we do every day when the market

is open take advantage of the new

lectures we're releasing today or any of

the existing content use that coupon

code holidays below because we'll be

switching everything up very shortly

okay so what did Bullard just say

Bullard just told us that he thinks 2023

will actually be a year that is

disinflationary that means inflation

going down heavily and this was shocking

he thinks that even though we're not yet

at the rate where we need to get to he

thinks the odds for a soft Landing have

actually greatly increased from the fall

of 2022. now remember James Bullard used

to be the hawk guy he was the guy

pounding his fist on the table going we

need a hundred basis point hike

which is shocking because that was

really hawkish back when we're like oh

the fed's gonna lift off and they're

gonna give us a 25 basis point hike yeah

boy how times have changed now we're

like oh God thank God we're done with

the 75 going to 50.

we've been through a lot so James

Bullard is the guy who was pounding on

the table for 100 basis point hike early

in the cycle now he's actually pounding

the table going yeah we're we're close

to there and the odds for a soft Landing

have actually increased from the fall in

the fall James Bullard told us he showed

us a chart and I'm just going to

simplify the chart here basically and he

told us that the terminal fed funds rate

might have to be somewhere between five

to seven percent that was before we

actually got two soft CPI reports

indicating that maybe inflation has

peaked and maybe it's not just peaked

but maybe it's about to plummet

especially as housing inflation which

makes up about 32 percent of CPI

inflation or pce inflation or pce based

housing inflation which is about 20 to

25 percent of PC inflation is also set

to plummet this year that's because we

could look at leading indicators of

rental prices and we see the housing

market slow down and we think that

massive core of inflation will be

plummeting in 2023 and so James Bullard

is actually now implying that he thinks

maybe we need to get to here and stop

now this is really incredible because

it's a big shift from what we've been

hearing from the FED we keep hearing

from the FED do more raise rates more do

more more more more keep going but

bullard's actually telling us hey maybe

we've done enough

because if inflation actually plummets

the way Bullard thinks inflation is

going to plummet

the FED might not have to destroy the

labor market as much as they think they

need to consider this real wages right

now which are wages adjusted for

inflation are negative even though

people are making more money on paper

right their nominal pay is going up

they're making less money when you

factor in the inflation we've had over

the last three years compared to 2019

so when we look at data and we say oh

but you know people are making more

money you know is this going to lead to

a wage price spiral it's entirely

possible that the gains we're seeing in

annual pay are actually just catch up

gains now that's an interesting argument

that kind of develops on bullard's

thesis here because look right now if

you stay at your job maybe you've

experienced about a 7.3 percent pay bump

if you change jobs you might be looking

at like a 15.2 percent pay bump I'm

going from a staff of about four

construction guys to a staff of about 12

here uh in in over the last couple

months and over the next few months here

as we finish out our hiring so I'm kind

of part of the problem I apologize okay

like we have seen some real growth here

in the ADP numbers that came out this

morning that we weren't expecting like

Business and Professional Services where

I am yeah I'm part of this hiring you

know 52 000 jobs created here these were

negative previously Leisure and

Hospitality obviously exploding but you

have to remember that Leisure and

Hospitality these sectors were actually

negative relative to pre-pandemic levels

so really you have catch up happening

right here and you probably have

catch-up happening with wage gains

because the reality is we've had all

this inflation but when you consider

inflation next to wage gains people

haven't been making more money

so if it's true that the labor Market's

price increases are just catch up then

maybe the FED doesn't actually have to

keep hiking to the point of destroying

the labor market maybe if inflation

plummets the way Bullard thinks it will

the FED can stop in fact listen to some

of the things he said he said that 2023

is a deflationary or disinflationary

year there's a big difference between

those two remember deflation as prices

going down that 100 Apple iPhone that

doesn't exist selling for 95 the next

year that's deflation right that 110 or

that hundred dollar iPhone turning into

110 10 inflation next year goes to a

hundred and say 15 approximately five

percent bump rounding a little bit there

it that's disinflation because rather

than growing at 10 you only grew at five

percent right so he thinks this year is

going to be a disinflationary year he

thinks we're not quite yet

sufficiently restrictive but we're very

close we we've almost completed our

front end loading and he thinks the next

rate hike is going to be dependent on

the next inflation report the next CPI

report which comes out on the 13th and

it's going to be based on or it's going

to either be a 25 basis point hike or

it's going to be a 50 basis point hike

right now the market to the tune of

about 96 of the market is expecting uh

the the uh about a 25 basis point hike

which is pretty nominal uh and I'm sorry

I want to clarify CPI actually comes out

on January 12th not the 13th so mark

your calendar for the 12th of January 8

30 a.m I'll be covering that live I'll

also be live tomorrow for the jobs data

at 5 30 in the morning so you're welcome

to come for that as well anyway for for

Bullard Mr Hawk pounding the table for

100 basis point hikes to tell us hey

maybe 25 50 depending on how CPI comes

in next really good what he also

suggests though is that we're seeing

stronger GDP and what I like doing is I

look like looking at the Atlanta fed

real now GDP tracker and what's really

remarkable about this is It's been

exploding this is absolutely remarkable

in my opinion and it does create a risk

I'm going to tell you about that risk

but look at this latest estimate as of

January 5th that's today the GDP model

estimate for real GDP seasonally

adjusted annual rate of the fourth

quarter of 2022 is 3.8 percent about the

same basically as the 3.9 percent

estimated a couple days ago now that's

actually phenomenal given that this a

GDP estimate was has actually been

negative last year

and this is the consensus based on Wall

Street right here this blue range over

here and you can see the Atlanta fed

data is suggesting GDP might be a lot

stronger than we actually think it is

which might mean maybe the recession and

the hard Parts already behind us now

that's crazy if that's potentially true

because nobody in the stock market seems

to think this the recession is behind us

everybody seems to think the recession

is in front of us that has to do with

the inverted yield curves right

inversions of the yield curve tend to

Signal a recession coming ahead of time

and quite frankly the fact that rates

are so high now does imply that the FED

is going to restrict growth

substantially

but if you've got the big hawk in the

room at the FED all of a sudden saying

no no we have a greater chance of a soft

Landing what he's saying is inflation

might go down

GDP might stay positive and we might not

have to kill the labor market let people

get paid more money they're still

getting paid less than they were in 2019

so who cares let wages rise a little bit

as long as that inflationary number

comes down we're good now this is

similar to a video we talked about this

morning but James Bullard hadn't come

out yet this morning to say exactly this

stuff

that's really incredible and suggesting

that five percent might end up being the

peak for the FED if we get another few

soft CPI reports over the next couple

months here

maybe we can get through what will

hopefully prove to be and I don't want

to sound like a broken record but what

will hopefully be a form of transitory

inflation where yeah we had two years of

hell

but then it went away and as long as it

doesn't come back Michael burry will be

wrong and so I have to say for once I

actually find myself cheering James

Bullard now don't get me wrong I also

agreed with him early on that look the

FED is way behind the curve

didn't necessarily want to shock the

market but uh hey you know what you got

to do what you got to do with the fed

the Fed was behind the curve and I think

they gave us some of the fastest rate

hikes that we've ever experienced now to

indicate that maybe the time has come to

uh pause and a soft Landing has actually

increased enchants

pretty bullish now I don't want to sell

hope because keep in mind Jerome Powell

tells us now which he hadn't done

previously that a recession is just as

likely as not he's actually been more

hawkish so this is why I say even though

right now the FED doesn't want to tell

us that oh they might cut rates soon if

inflation plummets all of a sudden we're

actually starting to face deflationary

numbers the fed's gonna cut so freaking

fast remember they can talk dirty to us

all year long up to the day they realize

they've gone too far and they could just

U-turn remember when they u-turned in

March of 2020 during the covet pandemic

it's on a freaking Sunday and they cut

rates two percent it's insane so I don't

want to suggest that you go all in on

stocks right now it's a lot to pay

attention to but let me just say

this is a start to a positive sign

fingers crossed CPI affirms it