Fed JUST Told IMF: Yes, We will Raise Rates [Details]

okay quick preface in this video i want

you to look for two

big shifts in what jerome powell says

there are two big shifts

and you gotta watch to the end of the

video to catch two of the shifts

that happened in which jerome powell

said today let's get into it right after

you get yourself two free stocks with

weeble link down below deposit a hundred

dollars get up to eighteen hundred fifty

dollars

we're in two free stocks with weeble go

to mckevin.com

weeble hey everyone me kevin here jerome

powell just spoke at the international

monetary fund on a panel

moderated by sarah eisen from cnbc

shout out to sarah we love seeing her

when the closing bell happens

so anyway folks in this interview we

learned some more insights from jerome

howell here's a summary of what was said

first jerome powell complained that

eight and a half million people are

still out of work

and that unevenness in our recovery is

very

serious and jerome powell said look we

had a good jobs report in march

but we don't just want a good jobs

report in march

we want a string of good jobs reports

to actually start seeing unemployment

get back to even levels

so we want real progress not forecast

unfortunately today

what happened unemployment claims came

in higher than expected

so we're still seeing that uneven

recovery

and that's something that fed chair

jerome powell says

is very important that we see an even

recovery

before having any kind of tightening he

also says that look it's not fair that

basically

the people who are the ones with the

lowest

wealth and generally the lowest amount

of pay

got hurt the most travel leisure hotels

restaurants

it's not fair and that these people are

even

suffering trying to get back to work as

companies decide maybe they want more

technology

and less people this is something we

talked about early in this pandemic

that this pandemic is going to lead

companies to do tons of layoffs

they'll maybe lay off 20 000 people as

an example and then go

ah all right we're hiring back but we'll

just take back the 5 000 that we cherry

pick

i mean think about it best job interview

ever the company already knows how well

you perform

you got laid off and they just decide to

hire back one fourth of the people

they're probably gonna pick the top

performers of those 20 000 people it was

like the best

reason to basically fire a bunch of

people and then just rehire

the best of the bunch which sucks that

leaves a lot of people out of work

that leaves a lot of people uh in in

jerome powell's mind

receiving potential scarring or even

potential

permanent damage to their entire lives

as

their job skills decay and their ability

to find a new job that was paying even

what they had before reduces and jerome

powell thinks this is very

bad and that congress and then he

specifically said this is not relating

to any specific bill

but he said congress should really be

spending more focus on supporting

the people who are hurt now this is

actually a big shift for jerome powell

jerome powell has regularly said hey i

think it's not a bad idea

to help people who need help but that's

up to congress

today he actually came out and bluntly

said quote

we should continue to support those

people

at risk of labor market scarring that's

a big shift for j-pal

and then from here we go into transitory

inflation

how long is transitory inflation so

first part of what we heard

is drum pile saying look we want

consistent jobs growth

we're not seeing that right now we had

one good report

we today had bad unemployment claims

data

so we got to see consistent up up up up

up up

and we're not seeing that right now to

even start thinking about or start

talking about

tightening monetary policy but sarah

eisen then hit

drum up and said look how long is

transitory inflation you all keep

talking about

inflation that's going to be here

temporarily and then it's going to go

away

how long is that and sir jerome powell

added some clarity

he said that in his opinion inflation

means persistent inflation

seeing prices go up two to four percent

year after year

after year that's the definition of

persistent inflation

in the mind of drum powell so regularly

seeing prices go up

up up up up he says that when we look at

long-term inflation dynamics over the

last 25 years

we've actually seen inflation go down

and that countries have had to deal more

with disinflation mature countries i

should say

like mature capitalistic and democratic

countries

have had to deal more with disinflation

and low inflation

or trying to get to two percent

inflation but struggling to do that

then over the past 25 years countries

have actually had to deal with

large inflation this is different

obviously from

less mature maybe a more unstable

governments like you might find

in venezuela or

zimbabwe and so this is something that's

a big contrast to keep in mind

and jerome powell says long-term

inflation dynamics

trend down what we're seeing in the

short term

are supplied bottlenecks and jerome

powell expressed frustration that the

market seems

very convinced that the short term is

going to predict the long term

but what he's basically saying is i'm

going to draw a little

comparison here he's basically saying

we're on this this

raft that's flowing in this direction

towards low inflation but because of the

whirlwind

of covid where we've had all of these

insane supply shocks to lumber

sheet metal used cars chips

circuits graphic cards uh certain foods

remember the beginning of the pandemic

meat was skyrocketing right like a lot

of things out and about have gotten more

expensive

but jerome powell is saying look this is

a short-term consequence of supply

bottlenecks

that that little raft that we're on has

been now making this analogy right has

been turned around

and now it kind of feels like the raft

is going towards inflation

but the longer run current is going

towards disinflation or lower inflation

and then at some point the raft is going

to catch

supply chains get more efficient and the

little raft goes

along the lines of lower inflation again

and that's his expectation

he said quote we think supply chains

will adapt

and become more efficient but gave us a

time frame

he said it might take a year this is

what we talked about yesterday

in fact yesterday which i highly

encourage you watch that video if you

haven't yet

watch my fed video yesterday where i go

through this particular chart i'm not

going to rehash it here because i'm

always trying to provide

the latest info and the latest sort of

way that jerome powell is describing

things

a lot of people are very focused on

what's going on with the fed

understandably so because it's a big

market catalyst

but this little scribble scrabble right

here make sure to watch that in

yesterday's video on the fed it'll be

very useful

i think in in helping us understand uh

what's going on but look

don't get me wrong i totally see what's

going out there

on out there i think i think folks think

that like i'm crazy not seeing that

prices are going up and

not agreeing that you know oh it's

bullcrap that cpi doesn't really show

inflation and

everything around us is going up oh but

those things are conveniently not in cpi

i agree i think it's bogus like i think

the way inflation gets measured is crap

but every little thing that we look at

when we're like and ask yourself this

even if you think big inflation is

coming

seriously ask yourself why are lumber

prices up well because real estate

demand is through the roof and everybody

wants to build a house right now

i experience this too i gotta buy lumber

too i'm renovating places too i

it sucks i feel it you know when the

bills come in i'm like oh man

that's how much the lumber cost is this

month it sucks

i get it but anyway ask yourself

individually why is this up

is it because of a supply chain issue or

is this because

we expect like look lumber prices double

do we think lumber prices

are going to go up again next year or

down what usually happens like in the

stock market

after something goes skyrocketing

parabolic it usually comes down again at

some point in the future

to find an equilibrium the same is going

to be true of a lot of things i don't

think we're going to see lumber prices

constantly go

double and then up another 50 and up

another 30 i think it's unlikely

anyway moving on to what jerome powell

says uh jerome powell

also changed his verbiage a little bit

on inflation and this was interesting

usually he's been saying

we don't think inflation is going to

happen but this time

he actually said we don't think

inflation happening like over two

percent

is quote the most likely outcome

it's kind of a change in his verbiage a

little bit he's leaving that door

open a little bit more lightly to look

maybe

there will be inflation uh so that is an

interesting shift that i did pick up

on which i know is a little bit counter

to what i just talked about

uh but i i look i give it to you

straight both ways okay

uh i i think jerome powell is doing that

in a way

uh pot i don't think he's doing that

because he thinks big inflation is

coming

i think he's saying that because he

wants the

he knows the market wants him to address

it so he's saying look

yeah there's a chance we don't think

that's the most likely but if it happens

we have the teal

the tools to deal with that to guide

inflation to two percent

if the need arises he says sarah eisen

then

nailed them with like the best question

she goes

well what would you do would you raise

rates and you go well

yeah yeah that that is that is the

principle tool we use when there is

inflation so in other words if there is

inflation the waves are going up faster

which is what the market is anticipating

uh but then he did reiterate though

that's not what he thinks is

the most likely outcome he says again we

focus too much on the short term we need

to focus on long term

supply side decision making

and then he also says we need to invest

in making this recovery more

inclusive so definitely some changes

here very interesting

but anyway thank you so much for

watching this video make sure to get

yourself two free stocks with weeble use

the link down below or go to mckevin.com

weeble get two free stocks worth up to

eighteen hundred fifty dollars and folks

we'll see the next one

[Music]

you