from video NXci31aedmA in today’s video we’re covering the stock market based on the newest variables so here’s the current situa tion at their last meeting which just happened a few days ago the Federal Reserve raised interest rates by 0.25 so the FED fund’s interest rates is now at 5.0 so that’s at the top end of the range the reserve updat ed their economic projections they’re expecting that interest rates will Peak at 5.25 that means that the pl an is well this is their plan at their next meeting in May raise interest rates One Last Time by 0.25 percent and that would get us from right now from 5.0 to 5.25 percent and then after that the plan according to the FED is to maintain interest rates there at 5.25 for the rest of the year so we’re talking about for at least se ven months investors are skeptical that’s derp said that’s their plan but the market the stock market the in vestors do not believe that this is going to happen the market says that it is more likely than not that at the next meeting in May the FED will not raise interest rates instead that the FED will pause at 5.0 percent th e odds are currently a pause a 64 chance of that happening they raise interest rates by 0.25 a 36 chance of that happening now listen the Federal Reserve raise interest rates by 0.25 on Wednesday right going in to that meeting that was the expectation that the Federal Reserve would raise interest rates by 0.25 perce nt the market said a 65 chance so that was the expectation of 65 chance that they would raise interest rat es by 0.25 percent and that’s what the FED did but even though that was expected still the market did not like that and the stock market had a really rough day a really bad day on Wednesday it ended up deep in the red now imagine how the stock market will react at the next fed meeting if the outcome is worse than expected imagine that the expectation is overwhelmingly in favor of the FED not raising interest rates and then the FED raises interest rates and that would be a disaster at least in my opinion so listen I already tol d you what was going to happen on Wednesday I gave you fair warning in advance I said that I said that t he FED will do 0.25 I said If the Fed did 0.5 percent it would crash the stock market it would it would trigg er the circuit breakers so they’re not going to do it I said that if they go with 25 basis points the Market’s g oing to go up and then it’s going to drift down lower that day so at the May meeting if the market expects a pause if the market expects a pause and the FED raises then it’s it’s going to be ugly it’s going to be a b loodbath the stock market is basically setting itself up for a crash in that event okay but I want you to kno w this because obviously this is very important the pain in the stock market it may come sooner and here’ s why because by April 12th we’ll have a good sense of what the Federal Reserve will do at their meeting in May April 12th is when the March inflation report comes out so that report it better show really good pro gress on lowering inflation so if that CPI print isn’t at 5.7 or below then we’re going to have some serious problems in the stock market if it reads a 5.8 percent then it it could be a bad day but if it’s 5.9 or higher th en it’s going to be ugly it’s going to be we’re going to crash because if it’s at 5.9 percent or above that me ans the Federal Reserve will need to raise interest rates by 0.25 at their next meeting in May and the the market will come to that realization with the high inflation prints and listen I’m telling you the Federal Rese rve they better get inflation down to 5.7 percent or below in March because this is the easy parts the diffic ult part is going to be getting inflation down meaningfully when we’re in the five percent range because th at’s when when we’re in the five percent range that’s going to be the harder part that’s going to be when i nflation becomes stickier now we need to talk about the FED pivot because this is where things get crazy to me this is absolutely nuts because the market expectation versus what the Federal Reserve is saying i s Worlds Apart so let me tell you what’s happening at the Federal Reserve meeting in June the expectatio n is a 55 chance that interest rates will be at 5.0 percent and a 20 chance that the Federal Reserve will cu t interest rates down to 4.75 percent but remember that the Federal Reserve is signaling that in June inter est rates will be at 5.25 so as a matter of fact the Federal Reserve is saying that interest rates will be at 5. 25 for the rest of the year until at least December now this is where things get really crazy and you need t o know this the market is saying by that by the July meeting there is a 100 chance that the FED pivot start s by then a 100 chance that the FED Cuts interest rates by that time again by July the Federal Reserve is saying that interest rates will be at 5.25 the market says that interest rates will be at 5.0 a 15 chance 4.75 percent of 48 chance 4.5 percent a 33 chance 4.25 of 4 chance the market is not even giving a one perce nt chance that interest rates will be at 5.25 at that time so like I just said it’s Worlds Apart the market expe ctation versus what the Federal Reserve is signaling so the market expectation is a Fed pivot will happen by June if not by then that a 100 chance that it will happen by July but Paul said no fed pivot in 2023 that i nterest rate cuts are not in the base case scenario so if the Federal Reserve doesn’t start cutting interest r ates by then then the stock market is in serious Jeopardy of crashing therefore if inflation does not come down hard in March then that’s going to mean big trouble for the stock market because expectations are e xtremely optimistic right now as you can tell another way that this could all play out is if the economy just collapses if something breaks then the Federal Reserve they’ll have to slow down they’ll be forced to slow down they’ll have to pause and not go to 5.25 or they’re gonna have to Pivot sooner than they would like so most likely in 2023 and that is a real possibility just look at what is happening in the banking sector and even as of today even the bigger banks are feeling it well this is in Europe but look at Deutsche Bank loo k at what’s happening there so in this scenario a Fed pivot would not trigger a market rally it would not trig ger stock market rally the FED pivot it would be in response to a disaster and it would be too little too late and this is what historical data shows that bull markets do not begin with the FED pivot but months after s o please note that everything I just told you it was just stats or facts or Market expectations so there’s not I mean honestly there’s not much to argue with here but if you want my opinion uh I’ll give you my opinion okay this is this is what I think here we go I think that the Federal Reserve is stuck between a rock and a hard place and the rock is hyperinflation and the hard places economic depression the FED will try to avoi d well obviously they’re going to try to avoid hyperinflation or economic depression and you know where t hey’re going to take us they’re going to choose the path of stagflation so I believe that we’ll have economi c contraction and elevated inflation which is stagflation which is inflation in a recession so mark my words say you’re going to hear that word in the media it’s going to be popping up much more it’s more and more stagflation just be prepared to see that word the mainstream media is so predictable so I believe that for t he fed and for the politicians stagflation it would be a better outcome than hyperinflation or economic depr ession the Fed if they really wanted to stop inflation they could reduce the money supply or they could im pose stricter reserve requirements on the banks that would stop inflation just like that but that would caus e depression that would not cause a recession that would cause an economic depression obviously they don’t want that and on the flip side the Federal Reserve they can avoid economic Collapse by slashing int erest rates and by printing more money but we all know what the consequences would be that would agit ate inflation that would take us to the brink of hyperinflation so the Federal Reserve they’re going to choos e the best bad option which is which is going to be the slow strangle of stagflation that’s because it’s not g oing to be as traumatic as economic collapse economic depression or hyperinflation but it’s going to be ve ry painful for everyday hard-working Americans it’s going to be especially difficult for people on fixed inco mes such as retirees or Social Security recipients and it’s going to be very difficult well most difficult for lo wer income Americans so I believe that Jay Powell and friends will try to fight inflation for as long as they can until something breaks in terms of the stock market I believe that’s going to drive the S P 500 down to at least 3600 from there I’m just gonna assess how bad the situation is we have highly optimistic expecta tions propping up the stock market it’s just setting itself up for a big disappointment that’s just my opinion we’re gonna see how q1 corporate profits and margins are in a few weeks I don’t think that they’re going t o be pretty and I think that Q2 is actually going to be worse what that’s actually the consensus so that’s n ot going to be a shocker yeah but I agree with the consensus on this one at this moment I would do two th ings so the first thing is I would be heavier in cash right now and the the point the purpose is straightforwa rd it’s to have reserves to take advantage of fire sale prices in the event of a crash the second thing I woul d do I would encourage everyone to have some silver or some silver plays that’s because at the Federal Reserve tries to save the economy with their magical printing pressed then we’re going to get more inflati on and that’s going to be great for silver I like gold too but I like silver for the industrial applications but lon g story short we are on a sinking ship so Market expectations are too optimistic I don’t think that we’ll get a Fed pivot until something breaks and if something does break then we’re gonna go down and the FED p ivot It’s Not Gonna Save the Date corporate profits are going down P ratios are still high unemployment is going up GDP will slow that’s a consensus so you saw the trouble I mean you’re seeing the trouble with t he banks well to me none of this seems like a soft Landing but just to give you the whole picture if you ha ve stocks for the long run I would say just weather the storm the worst thing that you can do is panic cell y ou do not want to panic sell but we encourage people to hedge against the crash because we see the sto ck market going lower just telling you for Preparation purposes and we encourage people to have reserve s to take advantage of Market panic when the time comes best time to buy is when there’s blood in the str eets at fire sale prices so if you want more exclusive investing content please I encourage you please che ck out our patreon website I’m going to leave a link down below we’re officially launching our investing we bsite next week that’s going to be exclusive to our patreon members and that’s just going to be the start s o I’m going to have another very exciting announcement very soon so this is going to be completely outsi de of our patreon or our website so please be sure to subscribe I thank you for all the support and wish yo u a very nice day please take care from video qQCHr8Mb2hw in today’s video we’re covering the Federal Reserve fomc meeting so we’re going to be reviewing the inte rest rate decision Peak interest rates and what this means for the economy recession or no recession let’ s begin the Federal Reserve has raised interest rates by 0.25 the FED funds rate has now increased to 5. 0 percent so this is wild considering that not too long ago interest rates were zero to 0.25 percent the Fed eral Reserve has been spiking interest rates higher in order to fight inflation the strategy is to increase inte rest rates and this will slow down the economy and that will kill demand will slow down demands and that will bring down inflation now the Federal Reserve has updated their economic projections they are expecti ng that Peak interest rates will be at 5.25 percent now I want to tell you what happens when Jerome Pow ell so if you remember when dronepal is testifying before Congress the market expected that the Federal Reserve would raise interest rates today by 0.5 percent that was the overwhelming odds it was as high as 80 percent an 80 chance of a 50 basis point increase today and the market expectation will at that time w as that interest rates would need to go to 5.75 however after the recent banking collapses that sentiment i t changed dramatically and it changed very quickly the market no longer believes that the federal raised in terest rates to 5.75 percent because higher interest rates has created a much more challenging environm ent for the banking sector so I’ll tell you like this the banks got accustomed to a zero percent interest rate environments that’s an environment where money is cheap it’s nearly free where they basically didn’t hav e to pay depositors any interest to retain their business in there to retain their money in there now if you ta ke a look at interest rates just look at us a savings account just a regular run-of-the-mill Samus account lo ok at a CD the banks can no longer get away with paying zero percent interest to retain your money in the re otherwise people can just yank that money out they could put that money into short-term debt instrume nts and earn a noticeable amount of interest income and on the other side if banks want to borrow money themselves it’s become much more expensive the cost of capital has gone up dramatically so the days of cheap and easy money for the banks are now gone so when you take a look at the damage that the dama ge that Rising interest rates are causing on the economy we’re not going to get the official data until April 27th so I’m talking about the GDP reports but the expectation is that GDP will slow whether it’s going to g o negative well negative in the future this quarter or subsequent Futures it’s still unknown because opinio ns are all over the place there’s a debates between soft Landing Crash Landing or even no Landing howe ver with interest rates well with the higher interest rate environment and also with the lag effect a Slowdo wn is expected but by how much we’re gonna have to wait and see until the next GDP report and this all t his is a interconnect this goes hand in hand with unemployments the ongoing theme with the Federal Res erve is that the labor market is still tights and they don’t like that because that is contributing to wage inflat ion however with the higher interest rate environment the expectation is that unemployment will rise and we did see an uptick in the unemployment rates in February so in from 3.4 percent in January to 3.6 in Fe bruary so the Federal Reserve reiterates that there will be a softening in the labor markets unemployment is expected to enter the four percent range this year it is not expected to breach the five percent mark but if we get into that expected range that means that 2 million Americans will lose their jobs this year so whe n you’re looking at the effects in the housing market the expectation is that mortgage interest rates will re main at elevated levels so right now if you’re taking a look at the 30-year fixed that’s been floating around in the six to seven percent range right the expectation is that we’re not going back to three percent mortga ge rates if we ever do if we ever do well it’s not going to be anytime soon those days are long gone but rel ief is expected in the last few months of 2023 that’s expectation now in terms of the stock markets I’m goi ng to be going in depth on that topic in an upcoming video I want to get that video out by Friday so I need to dedicate a whole video to this one just separately because there’s so much to unpack here so we’re goi ng to cover what all this means the decision today Peak interest rates the FED pivot the timing of the FED pivot what’s going on with quantitative tightening and quantitative easing unemployment GDP the recessi on inflation Etc so please be sure to check out my analysis that video when it comes out again I believe Fr iday okay now here’s the situation the economy is hurting you see it just broadly just generally but it’s it it’ s showing up the most in interest rate sensitive sectors so we’re talking about the housing market and we’ re talking about the banking sector however the Federal Reserve they needed to raise interest rates today otherwise they would have lost credibility their credibility would have been shots because inflation is still r unning at six percent and a Resurgence in inflation that would have made the situation just exponentially worse so today’s rate increase it sends a message that the Federal Reserve is dedicated and prioritizing i ts fight against inflation I’m not saying that they’re doing a good job of it I’m just I’m just saying that fightin g inflation is their number one priority or so they say so many politicians are being critical of the Federal R eserve and their decisions so Senator Elizabeth Warren she’s one of them Warren said and I quote I do n ot think that the Federal Reserve should raise interest rates I’ve been in the camp that these extraordinary rate increases are extreme and should not be done Warren said that Jerome Powell is failing his respons ibilities as an overseer of the banks and on inflation Warren said and I quote yes he’s responsible for deali ng with inflation but he is also responsible for employment and what chair Paul is trying to do is slow dow n the economy so that 2 million Americans will lose their jobs so Senator Warren said that other things ar e responsible for inflation as well she cites price gouging supply chain problems and the war in Ukraine so Warren said that raising interest rates does not do anything to solve those set of problems Warren said th at the only thing that it achieves is putting millions of people out of work so my opinion about that specifica lly about what Warren said is that yes there is some truth to that however I would say that the bigger probl em or the bigger issue was the fact that the Federal Reserve printed trillions of dollars so that was quantit ative easing that was completely separate that was outside of this whole interest rate discussion so the ex pectation is that the FED will fix this what they did with the printing with quantitative tightening the expecta tion is that QT will continue into 2024. so that is the reduction of the balance sheet of the Federal Reserve but I do want to throw in there that so now you have to think about this now we have backdoor quantitativ e easing which is obviously that’s counterproductive to quantitative tightening which is I’m talking about th e bank rescues and what we’re seeing here is what I believe is just the start in terms of the new programs the backstops the bailouts and the new lending facilities all right so a higher interest rate environment is c reating a drag on the economy they call it below Trend growth and a lot of people don’t like this I just gave you one specific example Senator Warren but former treasury secretary Larry Summers he said that the FED needed to raise interest rates today summer said that the trouble that we’ve witnessed in the bankin g sector it has not been severe enough to justify a pause because inflation is still running too hot so Sum mers says that the FED needs to maintain an aggressive stance against inflation in order to suppress infla tion expectations so no matter what the FED decided to do today or no matter what they decide to do in th e future they’re going to receive criticism either way so I gave you both sides of the argument I’m not defe nding the Federal Reserve I think that if you’ve been following my channel for a while then you know exac tly how I feel about the Federal Reserve I’m not a fan I think that they went too wild with quantitative easin g I think they raised interest rates too late they’re too late to the game and I think that they didn’t know wh at they were doing other people are making the argument that some or all of this is intentional but I could see I could see I could understand that perspective in terms of the economy and this higher interest rate e nvironment let me tell you what Goldman Sachs is saying so they’re saying that there’s a 35 chance that t he U.S enters a recession in the next 12 months they previously said that there’s a 25 chance but they up ped it to 35 percent they upped it because of the stress in the banking sector so we saw silvergate we sa w signature we saw a Silicon Valley Bank go under and credit suissa they were next now the best case sc enario in all of this is that okay inflation comes down inflation comes down at a healthy clip and Peak inter est rates do not need to go higher or much higher and the FED can pivot they can start cutting interest rat es the worst case scenario is that inflation remains sticky and unemployment shoots up and GDP turns ne gative and then we’re going to be in a period of stagflation that’s a time so stagflation that’s a time of high inflation during a recession that would be very bad I’m not going to talk about depression and economic d epression I think the FED would much rather choose inflation over a depression but if we do enter stagflat ion then I may have to reassess that so that’s it for today please look forward to my stock market video it’s going to be an updated analysis on today’s information how it impacts the stock market so thank you for all the support Please Subscribe and I wish a very nice day take care from video 9vKRBP0tabM in today’s video I want to talk to you about the FED pivot did you know that the market expectation is that the FED will pivot in June that is just three months away okay so if you didn’t know the FED pivot is when the Federal Reserve starts to cut interest rates and obviously that will have major implications on the stoc k market on cryptocurrencies and the economy just overall I mean we’re talking about pretty much everyt hing mortgage interest rates interest rates and credit cards interest rates on your savings accounts auto lo ans you name it so I don’t want to oversell this but yeah this is kind of importance and you need to know what’s going on so here’s the market expectation you can check this out for yourself on the CME website i t’s free you don’t need to register you don’t need a subscription this is all free information based on Future s pricing and no this video is not sponsored by the CME so I’m just telling you because it’s a great tool an d if you’re a stock market investor or if your cryptocurrency investor and you don’t use this information the n you are basically just navigating blind and I don’t know how you do it all right so let’s get serious let me cite you the data so we have the Federal Reserve meeting that’s coming up on Wednesday March 22nd a nd here are the odds the Fed so the odds that the FED does not raise interest rates at all so we’re talking about a pause there’s a 36 percent chance the FED raising by 0.25 or 25 basis points a 64 chance the FE D raising by 0.5 so 50 basis points there’s a zero percent chance of that happening that is basically just of f the table we’re currently at 4.75 percent that’s the top end of the FED funds rates if there is no raise then we stay at 4.75 percent if they go with 0.25 percent then that’s going to take us to 5.0 percent if it’s 0.5 pe rcent if they choose to raise my 50 basis points in my opinion that would crash the stock market and that would trigger the circuit breakers it would be a disaster but again I don’t see that happening so here’s the thing if you think about it those are some pretty decent odds that the FED decides to pause no interest rat e increase we’re talking about a 36 chance If the Fed actually goes through with a decision like that a pau se then the stock market would probably just soar it would skyrockets If the Fed goes with 0.25 the stock market it should probably still go up it would most likely do one of those up in the morning and then drift d own slowly but here’s the thing this is not that that is what you would expect in an ordinary fomc meeting but this is not going to be an ordinary fomc meeting I’m going to tell you why it’s because at this meeting t he Federal Reserve is going to give an updated economic projection so this is when they release their esti mates of what they think that Peak interest rates will need to go to so this information what they say about that that projection it’s going to be just as important if not more important than the interest rate hike decisi on okay so here’s where things get scary really scary in my opinion and this can get really screwed up for the stock markets so I’m telling you this can get really messed up and here’s why the market expectation i s that Peak interest rates will be at 5.0 percent the Federal Reserve previously said the peak interest rate s would have to go to 5.25 and they hinted that they were going to move up their projection to 5.5 percent so this is a huge discrepancy and If the Fed If the Fed says 5.5 percent that is going to be really bad for th e stock markets but here’s the thing so maybe the FED participants will keep it at 5.25 or even decrease it to 5.0 percent if they feel like there’s too much pain ongoing in the banking sector so higher interest rates are really hurting the banks especially the smaller Banks so we’re talking about the regional Banks outsid e of the big ones outside of JPMorgan B of A Citibank Wells Fargo U.S Bancorp so it’s it’s hurting the top five too but not as badly as the regional beings the smaller players now if the Federal Reserve believes th at further interest rate hikes will cause more turmoil in the banking sector then yeah they might have to ha ve a change of heart and maintain it at 5.25 their projection or even decrease it to 5.0 percent and the sto ck market well that happened then the stock market would be so happy about that and that would shoot it up but if they say 5.5 percent then it’s gonna get ugly prepare yourself and they would say 5.5 if they feel l ike inflation is not coming down as quickly as they’d like and that the banking sector is in okay shape but t hat’s the thing that’s the question is the banking sector truly in okay shape but when you’re pondering that question you have to take into consideration the international scene so just think about Credit Suisse bec ause U.S authorities were involved in that discussion UBS and Credit Suisse that situation so it’s bad out t here not just domestically but we’re talking about internationally as well so there are international consider ations but now it if we take a look at the next fed meeting that’s going to be in May the market expectation is that the FED pauses that’s when they don’t raise interest rates they don’t cut interest rates they’ll maint ain them at 5.0 percent so here are the odds for me the FED pause is at 5.0 percent there’s a 53 percent chance of that happening they raise by 0.25 percent so that would get us to 5.25 there’s a 26 chance of th at happening they cut interest rates by 0.25 and that would get us to 4.75 there’s a 21 chance of that hap pening so the most likely outcome well this is for me is that the Federal Reserve pauses but you have to t ake into consideration that there’s a 21 chance that the FED pivots in May isn’t that crazy so when you lo ok at the subsequent meeting that’s going to be in June there is an overwhelming expectation that the FE D pivots 76 chance that interest rates will be below 5.0 percent so this is crazy because the FED has bee n adamant and they’ve said it so sternly that they will not pivot in 2023. the FED says no pivot in 2023 the market is saying a 76 chance of a Fed pivot in June so it gets even crazier so at the subsequent meeting which is going to be in July so here’s what the market expects a 99.5 probability that the FED pivots by th en 99.5 percent If the Fed does not cut interest rates by June or by July then I don’t know what to tell you the market expectation versus what the Federal Reserve is saying is basically light years apart so the que stion is is the market setting itself up for a huge disappointments and a crash because these probabilities I mean again the discrepancy between the two they’re just so far off so in my opinion September that is ju st too far out there to predict but there is an expectation so the market expectation is that interest rates wil l be cut all the way down even as far as 3.75 percent 41 chance that rates are cut down to 4.25 a 22 chan ce that it’s down to 4.0 percent and a four percent chance that it’s down to 3.75 percent so let me know w hat you think because the market may be setting itself up for a huge letdown so I think the market it may b e acting it may have Market expectations that are overly optimistic and if Powell doesn’t deliver and things don’t go according to expectations then the market will probably react very negatively so for this meeting this meeting coming up on Wednesday March 22nd so let’s see how J Powell comes out will he be dovish if he is dovish how dovish is he going to be let’s see what the peak interest rate expectation is and let’s s ee if they hike by 0.25 or pause so this fomc meeting this Federal Reserve meeting is going to be huge if you’re active in the stock market or in crypto you need to be prepared for this you need to be aware if you’ re passively in the market or if you’re just a bystander then well at least you’re going to know why the mar kets reacted so positively or so negatively so it’s just if you think about it the movement of the markets is j ust going to be reactions based on what happened versus the expectations so I’m going to conclude with my thoughts so you’ve seen all the trouble with the banks right silvergate signature Silicon Valley bank no w Credit Suisse this doesn’t sound like a soft Landing to me so I said that inflation is going to get sticky in the five percent range so we got stuck in January at 6.4 percent fortunately we made progress we hopped out of in February but that was pretty scary in January getting stuck there like that so we’re trying to get t o two percent inflation but we’re at six percent and already the banks are having trouble some of the bank s are collapsing my fear is that we will enter a period of stagflation so stagflation that’s when you have hig h inflation in a recession and just think about that who’s gonna get hit hardest in a stagflationary environm ent it’s going to be everyday hard-working Americans so think about that imagine your expenses just keep shooting up and you lose your job you know I don’t want to ski I don’t want to scare you so let’s just say t hat your expenses keep shooting up and your cousin loses their job that would be very very bad for your c ousin so nobody’s saying that I’m going to say that there’s a good chance that we’re going to pass throug h that period of stagflation hopefully if we do enter that period that it doesn’t last too long but if you put yo ur faith in the Federal Reserve at least we know that they’re gonna try their best to try their best so that’s i t for today I’m going to cover the fomc meeting on Wednesday please subscribe and thank you for all the support and wish a very nice day take care