This is a HUGE RESET for the Federal Reserve | Prepare for THIS.

hey everyone me Kevin here this morning

was an absolute and complete a disaster

and we've got potentially more disasters

coming up including the fact that 71

percent of the S P 500 by market cap

reports by July 29th and that is the

29th of this month which means we got a

whole lot of earnings coming up and

we're probably going to get a whole lot

more bad news because the news we got

this morning is probably going to lead

the FED to flip-flop and I hate to say

it this in terms of earnings season

might not help the case the NASDAQ on

the other hand has seen Now 50 percent

of its stocks being down 50 percent or

more from their 12-month highs some

non-profitable tech biotech and payment

services are down all the way up to 80

percent and the msci technology index

for the world has tacked down 30 percent

clearly investors are finally

diversifying their portfolio was out of

tech and out of high growth and it's

leading to pain in the markets but are

they right to do so when we have CP lie

numbers like the ones that came out this

morning let's talk about what happened

this morning and how this could

completely reset what the Federal

Reserve has for us in store and boy oh

boy but first before we talk about what

the Federal Reserve has in store we've

gotta of course talk about this chart

right here which has to do with the r

word folks the r word is recession and

we've actually got to start using the

word rather than calling it recessions

or word just say recession we're

probably in a recession don't wait until

it's too late Tory realize we're in a

recession because guess what most of the

pain tends to be over before we're

actually technically in a recession

that's because not only do you need to

have a 2 quarters in a row of negative

GDP but you've actually got to have

these economic boards the National

Bureau of economy blah blah blah

determine okay we're actually in a

recession and it's all in hindsight it's

a complete disaster the reality is

markets realize and this is why

everyone's talking about it here's a

chart of the number of the word

recession or number of times the word

recession is used in news articles and

you can see it's absolutely skyrocketed

and there's no freaking surprise because

inflation is going nutso so not so in

fact that we can't even report right

take a look at this chart here this

chart here shows you U.S inflation

coming in hotter than forecast the

hottest inflation now in the last 40

years this shows you inflation going all

the way back to 2005 over here you can

see we have the biggest month over month

gain in inflation since 2005 the highest

headline in inflation read in more than

40 years folks this is intense inflation

came in so nasty this morning and at the

same time Pepsi told us they still have

pricing power and Frito-Lay and Mountain

Dew indicated that they have pricing and

power passing on about a 12 percent

higher pricing in the second quarter

that the Bank of Canada Central Bank

said you know what we are actually now

starting to face the danger of the

Spiral that is the wage hike and then

the price spiral wages go up when wages

go up a people end up being able to

spend more money providing purchasing

power to Pepsi Frito-Lay and Mountain

Dew and then guess what happens they

raise their prices and then prices go up

and when prices go up then all of a

sudden wages also have to go up because

people can't afford the cost of living

anymore so what did the Bank of Canada

do today well the Bank of Canada decided

you know what hey look we know know that

the market is pricing in a 75 basis

point hike but uh yeah we're gonna can

that we're actually just gonna put on

some pants and we're gonna raise rates

by 100 basis points which translates to

a full one percentage Point hike

something that maybe Jerome Powell

should actually take a little bit of a

hint from in fact we can even show a

chart now here that shows us what parts

of the world have actually finally

instituted a 100 basis point hike you

could see those pictured here in pink of

countries that have finally given us a

100 basis point hike and you know which

one's oddly missing over here it's right

here the United States put those pants

on yeah it's time to raise rates

appropriately and so we gotta talk talk

about what this means for the Federal

Reserve because the reality is pretty

much Wall Street was expecting inflation

to come in between 8.8 to 8.9 percent uh

and they were expecting that month over

month so this was the year over year

they were expecting that month over

month that we were going to be sitting

at 0.5 percent which would be an

annualized rate of about six percent

right we were expecting core to also

come in about 0.5 again annualized at

about six percent but unfortunately we

didn't get anything close to that we got

9.1 percent on Headline which is crazy

we got the highest month over month read

since 2005 at 1.3 percent and we got

core coming in at point seven percent

which translates to 8.4 percent and this

is going to change things for the

Federal Reserve especially because we

didn't just see what Joe Biden told us

which was oh well this last CPI report

doesn't reflect that gas prices came

down 40 cents no Biden it has not only

to do with gas prices in fact it has to

do with a whole heck of a lot of things

Laundry and Dry Cleaning Services up 0.8

percent and 10.2 percent on the year

Education Services up 1.7 on the year

Airlines down point two percent on the

month of a month basis which is good but

still up 34.1 percent of the Year car

and truck rentals just in the month

3.7 that's crazy home insurance up 2.1

percent folks that's over a 24 annual

hike for homeowners insurance Dental

Services up two percent hair and shaving

products of 1.2 percent on the month

computers and peripherals we thought

these were going to get cheaper no what

are they they're up 1.3 percent that's

over 13

annualized inflation audio equipment up

3.2 percent used cars and trucks catch

wood said these were going to go down up

2.2 percent on the month rent folks went

up 0.7 for rent of primary residents and

even ice cream was up 3.1 on the month

over month basis totally insane the only

thing that was down that actually seemed

to be of interest was the fact that

prices for shirts men's apparel were

down three percent that's it because

even paper towels went up 2.2 percent on

the month absolutely insane so now we've

got to understand what does this mean

for the Federal Reserve well the Federal

Reserve is going to have a very very

important response to this and so what

do we have now well the FED letting us

know that there's a 50 off coupon code

down below that now also starting later

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prices for the programs go up shortly so

what are markets pricing in now and what

is the Fed likely to do to us and what

is something that we haven't actually

talked about regarding the FED yet well

first right now we've got markets

pricing in a 100 basis point hike in

July with a 33 percent chance of

probability and a 33 chance of a 75

basis point hike potentially with

another 75 basis a point hike in

September we're looking at either way we

slice it probably a full 1.5 percent of

rate hikes between July and September

bringing us up finally to the magical

three percent which is actually deemed

to be above neutral neutral being

roughly about two and a half percent so

we're probably going to get above

neutral much faster than ever before and

this is what markets are suggesting the

FED do the FED just hasn't been doing it

so why do I believe the FED is finally

potentially willing to just do it

because there's something really

important to know about the Federal

Reserve okay folks I can't believe this

but when I said it was 33 percent in the

process of us just exporting the video

we got an update that the odds of a 100

basis point hike have actually moved up

to 50 percent but then as we started

updating that we got another update that

now the bond market is pricing this in

fast now folks the current odds for a

100 basis point hike a full one percent

hike bringing us from one and a half

percent to two and a half percent the

odds of that 100 basis point hike

happening in July July 27th are

67 ah and then we get crashed into by

Max who SE a really fast car what kind

of car do you have there a Lambo deal oh

my oh both you got Lambos yeah well

that's how fast inflation is running

away that you kind of need a Lambo or

the FED to have a Lambo to catch up but

folks look it's obvious the the fed and

markets are realizing

dude fed stop with the accommodative

crap you are still buying Bonds in May

wake up and Hike the Federal Reserve

realizes that there's one thing that

they can do very very quickly that the

covet pandemic taught us they can print

money very quickly they can U-turn very

quickly if they need to go soft because

inflation falls off a cliff and they

need to u-turn on us and start printing

money again and start supporting the

economy they can do that overnight they

could do that really really really

quickly what they can't do is fight

inflation by [ __ ] footing around and

they realize that and that's why I think

by the July 26th to the 27th meeting

we're finally going to get the FED that

actually put some pants on we thought

they might do that in the last meeting

but they didn't so what did we end up

getting well not only did we last month

have a much higher inflation read than

we expected but this month as well we

get yet another higher inflation read

than expected folks the FED needs to put

the pants on get us to not just three

percent but probably with these

inflation reads to 3.5 to as high as

four percent as soon as possible this

does mean paying for stocks in the

shorter term and paying for Real Estate

which could create buying opportunities

in my opinion it does at some point

though we do think that those inflation

pressures are going to lead the Federal

Reserve to U-turn and we know that they

can do so quickly and this is something

that I really think is critical that

most of us forget is that the FED can

you turn to our benefit fast they can

help us fast but dealing with inflation

takes time really putting the pants on

now ironically even though the Federal

Reserve has totally been missing it with

putting the pants on the markets are

still pricing in the fact that oh no no

we actually think inflation is going to

come come down let's take a look at this

chart and then we're done then it's time

to go back to Vacation okay because

every time I go on vacation bad morning

comes out and I'm sorry I apologize for

and I swear but take a look at this

folks and I don't know why now but I

sound like Patrick Warburton okay so

what do we got here this is the break

even inflation rate for the five year

this is the Market's expectation of

inflation it's the white line right here

you can see that recently that white

line has been plummeting the orange line

is the 10-year break-even rate of

inflation and one of the things that you

can do is you could run over here and

you can notice that when the break evens

plummet usually you get CPI or the blue

line that plummets after it's really

kind of interesting but take a look at

that over here you could see those break

even start falling inflation drops

anywhere between three to five months

afterwards when the break-evens move up

we tend to see the inflation move up

three to four months after that that's

what we're experiencing right now we had

the break-evens for inflation move up

over here in February and March here you

go break evens peaked what happened then

inflation sits over here two to three to

four months later we've got inflation

now potentially and probably peaking

although the type of inflation we have

is really really broad-based and this is

a danger because if we have broad-based

inflation what's to say it's actually

going to come down the Hope though is

that it will and for some reason the

bond market seems to think they're much

smarter than us who are living that

day-to-day life of going wow prices keep

going up as fast as Kevin raises prices

on his programs I'm building your wealth

but hey you know what that's because we

keep adding more content so you get a

better product every time over time but

this chart the break evens are implying

that inflation should be plummeting

within the next three to to four months

because you could see the break evens

have started to crash within the last 30

days and that implies that within the

next three to four months inflation will

come down but between now and then the

FED needs to act put the freaking pants

on hike the rates already you can always

always talk softly and nice to us in the

future but you turning back but put the

freaking pants on do your damn job show

the markets that you're going to do your

job and get inflation under control

hopefully the bond market is right and

if they are you can U-turn quickly great

but let's not play the game anymore of

oh knows the FED gonna do 50 or 75. it's

not working get it done and get ready to

go shopping for Real Estate because I

think the longer treasury yields stay up

because inflation keeps going up real

estate's going to be on sale more