JEROME POWELL FLIPS AGAIN | CRITICAL SHIFT.

Wow, we just heard a lot of good news from Jerome Powell and this morning I predicted that Jerome Powell would stop being hawkish and tell us that we're at a level where we can be a little less hawkish by talking down on the economy and Talking Down. down in the stock market, I predicted that the power of the drum would relax and sort of recede that incredibly tough attitude he gave us at the last press conference after that reporter asked a really stupid question saying that stocks were going up when that wasn't even true and friends.

I have good news, I think Santa Claus is coming to town this year, as long as the CPI is right on the 13th. I think we have Santa Claus coming and this is exactly what we predicted this morning, it's exactly what Jerome Powell did and I'm I'm very impressed with what Jerome Powell said today and I'm very excited about the discoveries that we have and the great results that I want to bring to you. We have three major discoveries that we just learned from Jerome Powell and we also got a beige book released. This is very, very exciting, let's start with the publication of the beige book because this is exactly what Jerome Powell had prepared for him before going into this.

Only five of the 12 Federal Reserve Districts reported any growth and most of them reported flat or mild to modest declines and this is what the Federal Reserve Jerome Powell told us today: They don't want to collapse the economy because that creates human difficulties, they do not want to destroy the economy they want if growth is usually around two or three percent. they want us to be between zero and one percent, they don't actually want us to be negative and guess what Jerome Powell told us today: he told us that GDP is basically just above zero, this is exactly where Jerome Powell wants the economy and it doesn't.

You don't actually have to be more aggressive, in fact you have to be careful not to be too aggressive because then we go down and we're not negative so you're really trying to do this balancing act, it's like flying a plane and you're trying. to keep your attitude at the right level and you say, oh, a little too high, oh, trim up, trim up, trim down, you know, back and forth, to the right, run the trim wheel Anyway, so what were the three big discoveries that Jerome Powell told us about? one and this one is a little deeper, but worth understanding.

Look at what Jerome Powell did first: he says inflation is too high, old news, then he breaks down inflation into three things: basic goods, which he tells us are plummeting, good core inflation is plummeting, OK? the first part of three resolved the second part of three, he says he has to do with housing services, which have increased rapidly; However, as new leasing signings continue to decline, we expect housing services inflation measures to plummet in 2023, in other words, controlling goods inflation. Housing services inflation so far verifies that the third and last has to do with salaries and this is because basic services are mostly supported by salaries and the most important data that we obtained this morning was actually the Joltz report that showed we are finally moving forward. from around two vacant positions per unemployed person to around 1.7 vacant positions Jerome Powell said this was actually in line with expectations and although wage growth is only showing tentative signs of easing, we are not seeing signs of slowing down. a wage price spiral, so while there is still work to be done here, we are on the right track, so think about what we are seeing so far, the economy is in the right place.

Check property inflation. Housing services so far check salary inflation. We are working on it, but with a trend in the right direction. the economy telling us like the attitude of that plane, the level of the plane is right where we want it, it's right where we want it, slowly going down a little bit on that inflation curve, that was the first big core, so we have the beige book where the economy is in GDP and then we have him talking about inflation of the three parts of inflation that he talked about, he's basically telling you look, we're winning, this was him, we're winning, this was his victory lap. before he won and why he was doing this because you don't want to relax.

Financial conditions look good to you, maybe actually they do, because the second central finding was that they feel they have tightened financial conditions substantially. He says we have positive yield curves. real rates on all the curves we are paying attention to the inverted yield curve, which is a dangerous sign that we could enter a dark recession, right, dirty recession, really high unemployment potential, uh, and right now the Inflation expectations are stable, both consumer and market inflation expectations. inflation expectations, which if you watch my video this morning is exactly what we predicted Jerome Powell would reference and it's exactly what he did so we made him talk hey.

Financial conditions are strict. GDP is where we want inflation measures to be coming down. We actually agree that maybe financial conditions will be eased a little bit because we don't want to tighten them too much now. This was actually very interesting and this was the third big discovery that Jerome Powell told us earlier at the last Federal Reserve meeting. He said we can always print more money if we push too hard. He said it with an arrogant attitude in response to a journalist saying something false, prompting Jerome Powell to speak harshly. Jerome Powell previously said that if we push too hard we simply print more. money, we loosen financial conditions

again

, right, what did you tell us today?

He said well, we don't really want to squeeze too much and that's why we're slowing down, we want to go slower and hold a stable rate longer in two separate cases, those rough quotes Jerome Powell's paraphrases practically guarantee a 50 basis point increase in December. Basically, he just told us that we will get 50 basis points in December. I mean, anyway, we've had plenty of anticipation for that, so that's not really a surprise, but you also told us with respect to the terminal rate that you just expect it to be a little bit higher than 4.6 percent, the market had been pricing it at 5.2 percent, well, 5.2 percent is quite a bit higher than 4.6, it's somewhat higher to be determined, but based on the rest of what you're saying. a little higher might be like 4.8, we may never get to five because you're starting to recognize the human costs of overtightening, something you never mentioned before, on top of that, you also suggested that our recession risk in the The federal government's last few minutes The reserve was set at 50 50, but we don't actually think there is a greater chance of a soft landing, that is, the path without a recession or a shallow recession without a large increase in the unemployment rate, for which despite the fact that the committee jointly thinks 50 50 he is on the non-50 side the non-recession or soft superficial recession Landing side what he wants to create is another long expansion another 10-year expansionary cycle where we go from 2010 to 2020 and everyone is getting rich and the people who get The richest are the people who own assets, whether you own assets like venture capital in an insider hack that has a deadline today for accredited investors, if you own real estate, if you own stocks, if you own exchange-traded funds, if you own bonds. yourself, people with assets make money in long expansions and it is not until the seventh or eighth year in Jerome Powell says that poor individuals, disproportionately black and Hispanic, begin to reap the benefits and that is because they disproportionately own fewer assets than whites and Asians, so Jerome Powell's talk today was very dovish, it's entirely possible and this is a risk factor that I want you to keep in mind, it's entirely possible that because this was so dovish and the market responded so good that in the next few days you end up having uh Well, we will soon have the FED blocking window for the Fomc meeting on the 15th, but there may be some kind of leaks from Nikki or whatever that tries to bring down the market

again

, so I would caution against getting too euphoric because even though we might have a little bit of euphoria here, we're probably going to go into the CPI a little bit softly because I promise you this if the CPI gets dirty.

The high drilling power will come back out and go, we are wrong. we're going to go up again, we're going to go up, it doesn't sound like that, but yes, he gave us a warning from the beginning in his speech, he said, look, inflation has gone down before only to go up again over the last year and more. In the last 12 months we've basically made no progress when you look at core inflation, it's been at five percent all year core inflation, PC core inflation and he doesn't see much progress there, so There are asterisks in this, but if we get a soft reading in December on the CPI and you combine a soft reading of the CPI with this drone friend we had today, the next six months in the stock market I expect to be glorious.

I wouldn't short this market, that's all I have for you, thank you very much for watching. this video If you appreciate this type of content, make sure to subscribe, share the video, we'll see the next one, bye.