저자: Kevin · 외국인
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FOMC 의사록에서 인플레이션 둔화와 성장 둔화가 동시에 나타나 주식시장에 호재라고 주장. 원자재 가격 하락이 인플레를 누르고 있으나 재반등 위험 존재. 연준이 고금리를 한동안 유지하면 부동산 시장은 10~25% 하락 가능성. 10년물 금리 2.7~2.8% 수준에서 모기지 금리 5~5.5%로 부동산 고통 지속. 본인은 주식 올인 상태이며 향후 부동산 투자 확대 예정.
다듬은 글
Hi everyone, this is Kevin. The Federal Reserve minutes have just been released, and so far, the market has reacted positively. What is there to like, and were there any warning signs in it? The answer is that there were some warning signs, we need to pay attention to them, and there is also good news.
Let's get straight to the document itself . I have already analyzed and highlighted the most important parts. Okay. Well, firstly, market participants seem to foresee a moderation in inflation and slower, but still positive, economic growth. This is really important. Okay. I see this repeatedly in the comments from many people.
I think it's important to address this, mainly because I believe there's a substantial misunderstanding here. Watch my video from earlier today as well, if you haven't already, because we cover this in a bit more depth. But many people are wondering: how is it possible to have inflation slowing down and still have inflation falling?
This does n't seem to make sense. And the answer is: yes, it is possible. Because, for example, if Apple manufactures 100, we're going to reduce that a bit. If Apple manufactures 100 iPhones in, say, 2021, and there is demand for 110 iPhones, that's demand, that's supply. So, what ends up happening is that the price of these phones goes up.
Now, you could go into 2022 and end up with supply catching up with demand; in fact, you might even have a few more orders coming in. You could have 115 phones and a demand for 114 phones. In a scenario where supply slightly exceeds demand, you generally don't raise prices. But what will you see? You will see net growth, more revenue, more sales.
Therefore, there will be no inflation as long as there are still more products being sold and produced. Now, some other comments that are circulating about this: but how can inflation fall if people keep spending more money? It's because of all the money we print. Don't forget, folks, because this is something very common that I'm seeing in the comments, people saying: well, we didn't have this inflation problem in 2009, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19.
You know, as if we've now printed all the money. That's why we have this inflation problem. Hmm, wait a minute. In fact, we started QE in a substantial way after the great financial crisis of 2009 and never really finished until 2018, because we started trying to reduce it, but it never really worked.
We did n't actually cut rates until 2018. The market had a nervous breakdown and the Fed reversed course. So, no, we've been printing money for a very, very long time. It's a precedent that began back in 1987, with the Fed bailing out the markets. Okay, so these are important things to learn. Yes, you can have inflation falling while the market improves at the same time, which is very, very, very bullish for stocks.
That's why I'm betting everything. Okay, I know people say, "Oh, but the Fed will have to raise rates to 5%, 6%, 7%, or 8% to crush this economy." I don't know. I don't see that, and neither does the bond market . But let's analyze some more of these notes. Market participants are noticing the drop in commodity prices.
that. Okay, we've seen this a lot. But they also mention, and I'll just summarize some of these things for you. They mention that this is, in fact, a potential risk , right? If commodity prices are plummeting, that's what's pushing inflation down right now. Well, if some kind of shock happens in the commodities sector again, well, you could see the opposite happen, right?
You could suddenly see that big surge return, where inflation starts to rise again because commodity prices soar once more. But so far, timber prices are plummeting, oil prices are plummeting, nickel prices are plummeting, wheat prices are plummeting. We are watching them all plummet. Yes, yes, it's pretty incredible.
Okay, let's continue here. Almost everyone responded , which was great, and that was optimistic in my opinion. Almost all respondents predicted and ultimately voted for a 75 basis point increase in July, but most expect a 50 basis point increase in September. The market is currently pricing in a 60% chance of a 50 basis point increase in September.
The Federal Reserve also projects that it expects to reach a benchmark interest rate of around 3.4%, based on its S&P 500. This is also what the market implies . Now, what's interesting about this, however, is the following. The projection for US economic activity prepared for the Fed was noticeably weaker in July than in June.
I personally found this very interesting, because we didn't have a summary of the Fed's economic projections in July. They skipped that meeting, and that's fine, we were expecting it. But we had a very pessimistic outlook for June, and they're basically saying that the economic data for July was even worse.
So they are certainly starting to see this slowdown in aggregate demand, which is very, very important, at the same time as they see supply chains improving. There is always a risk of falling. The deal could fall through again. China may face new lockdowns. This could, you know, force Tesla to raise capital.
Because, you know, if China is blocked, they'll have to do it. But thankfully, we 're not seeing that now. Knock on wood, right? Finally, you also have the potential for inflation and commodity prices to rise again, leading to further problems. In fact, around the world, the Fed observes that it still sees increasing price pressure on basic goods and services.
This also applies to foreign markets, and that 's a warning sign as well. Long-term borrowing costs have fallen for families and businesses with good credit, and are still readily available to individuals. I'm going to make a separate video discussing this idea that consumers no longer have money, that they're going to stop spending , that they've maxed out their credit cards.
We'll make a separate video about this because there are many rumors circulating that consumers are about to be harmed. Actually, I 'm not seeing that in the concrete data. People talk a lot, but when it comes to providing data, they don't . Everyone has their own opinion, and that's fine. In any case, mortgage underwriting patterns are better than in the previous cycle.
Now, commenting on the real estate sector, with houses on the market having substantial equity margins . This ends up becoming a warning sign. Let's jump to this warning sign: although mortgage standards are improving and home equity margins are higher, they believe it will be appropriate to keep the Fed's benchmark interest rate at its peak for a while.
In fact, their argument is that it would probably be appropriate to maintain this level for some time to ensure that inflation was firmly on track for 2%. I wrote " housing" here because I think it will continue to be a burden on the housing market and, after the peak, we will probably see market declines , depending on the area, between 10% and 15%, maybe even 25%.
Nothing like what we saw in 2008. It's not what I expect , but I think we'll see price reductions of 10 to 25% from the peak , which will probably have occurred around March or April, and we'll see those low values in early or mid-2023. So you want to be prepared for that. Obviously, I have programs on how to build your wealth with real estate investments and stock investments, building your wealth, whatever that may be .
Becoming a broker is a great opportunity. Now, check this out. Link below. There is a coupon code that expires on August 26th. And once we launch Series A, the price of these courses will also skyrocket. So, you'd better go in before that happens. Very good. The participants also judged that there was a significant risk to the committee that high inflation could become entrenched.
This is a very important sentence. So, they're giving us this red flag, some red flags here, right? They're telling us, hey, we're seeing the economy weakening. At the same time, commodity prices are falling, which is pushing inflation down, but inflation could rise again as commodity prices rise once more.
And the economy is weakening. So, our efforts are having an effect. although it will probably take longer. In fact, they say that many participants observed that, given the constantly changing nature of the economic environment. The effects of monetary policy have a time lag. So, the economy's reaction is lagging behind what the Federal Reserve is doing, right?
And they became very restrictive. Therefore, this is very, very important. So, we received these warning signs, right ? We have warning signs that inflation could potentially increase. Fortunately, it isn't. The warning sign is that once the Fed reaches its peak, they will remain there for a while. This is a warning sign for the real estate sector.
So, warning signs for inflation, warning signs for the real estate sector, warning signs for supply chains. Currently, supply chains and inflation are heading in the right direction, but there are reasons why things could get worse. Yields on 10-year Treasury bonds, which generally precede what the mortgage market does, are at 2.9%.
Actually, we're at around 2.88 right now . In fact, we went up today instead of falling. We're having this strange situation where it seems like we want to stay somewhere between 2.7 and 2.8. This means that mortgage rates will be somewhere between 5 and 5.5%. 3% larger than it was in the past. So, again, supply chains, the real estate sector, inflation.
The real estate market is the one that suffers the most from the Fed maintaining its restrictive policies for an extended period. So, if inflation does something like that, where it rises very quickly but then loses momentum like that , this long and prolonged decline will be very bad for the real estate sector.
But in reality, it will probably be good for the stock market. And that's why I think there's a kind of macroeconomic trade-off there. I don't consider myself a trader, but I would consider myself a macroeconomic trader. Okay, then. Let's see what else they have. We've already talked about some of the warning signs.
We talked about the real estate market. Oh yes. Remember the expectation we were about to talk about, that the Fed has the task of ensuring that inflation expectations remain anchored. And one of their concerns was losing credibility. And they talk about it again here, and they've mentioned it many times before, that if they lose credibility in the fight against inflation, they will fail, as this could become a self-fulfilling prophecy.
You can consolidate inflation expectations, then unanchor them, and suddenly inflation remains high. That would be very, very bad. And that's why the Federal Reserve has been appearing frequently, making those days when three of them show up to say that the Fed has an eternal motivation and an unwavering commitment to reducing inflation.
We're going to win, you know, and they really control the market by saying that. But they also do it because they have to. It's part of their job. This, however, shows what the bond market thinks about inflation. I'm going to hide here for a moment. The bond market is predicting that inflation should continue its downward trend.
It won't be a straight line down, as you can see here. He passes through these peaks and valleys here. But this graph tends to move about 3 months ahead of inflation, 3 to 4 months ahead. We just saw inflation fall in July. And what you'll notice is that if you count one, two, three, about three and a half to four months here, three and a half to four months before that July data point, what do you get?
You get the bond market saying, "Oh, we're seeing signs that inflation is going to fall." So, perhaps we'll settle down here for a while until the next report, because this might be what we'll have in September or August. But then, we really expect to see some noticeable drops in inflation towards the end of the year .
Again, this chart here attempts to predict inflation about 3 to 4 months in advance and is the 5-year break-even chart; It is also a way to see what inflation expectations are, which, based on consumer data, are anchored and positive so far. Now, what 's also really noteworthy is not only the Fed again referring to this slowdown, particularly in the housing sector, but look at this idea that, eventually, GDP growth, that a period of below-trend GDP growth, will help reduce inflationary expectations and pressures .
This is very important because they are saying, "Hey, actually, this negative GDP report we just had could be a very good thing, because it helps us reduce inflation." Furthermore, we have this strange thing happening where, technically, we are in a recession, but the labor market doesn't indicate that we are in a recession.
So, there's a dispute about that, and, like, Biden redefining the definition of recession and all that, anyway. This is all politics. But what 's interesting here is that the Fed actually thinks that, ultimately , GDP will end up being revised upwards and, looking back, we won't actually be in a recession.
How strange is that? We can feel like we're in a recession. We might be told that we're in a recession and then, in the future: no, just kidding. Actually, we weren't in a recession. Very interesting. They are starting to notice some signs of weakening, uh, in labor market growth . We talked about the danger, uh, uh, of real estate, and again, here's the committee facing a significant risk of letting inflation expectations spiral out of control.
So, what do we have here? In my opinion, we will have 50 basis points in September, unless we have a terrible CPI report in September . The stock market is really liking this. The stock market fell earlier today. Tesla's stock fell by as much as 2%. We are now seeing Tesla in the black. We're seeing QQQ drop by only half a percent, trying to stay in the black along with Nphase here.
Target. We did a very in-depth fundamental analysis this morning, uh, reading between the lines of what Target actually said, uh, in our live stream for course members this morning, which I found really amazing. Uh, check out these courses with the links below. Be aware that the longer the Fed keeps these rates high, and the longer the 10-year Treasury rate remains high, in the range of 2.7%, 2.8% or more, which is where it is now.
Uh, more pain is coming to the real estate sector for longer. The real estate market doesn't move very quickly . It moves very, very slowly, and that means that if that 10-year Treasury rate keeps rising, you're going to see pain in the housing market for longer, and that's an opportunity for you to buy.
I highly recommend you subscribe, by the way, because I'm starting a real estate startup and my intention is to bring much more real estate content to this channel. The reason for this is that I will be investing heavily in real estate as soon as this company is launched. In fact, I will be selling many of my shares over the next year.
And I hope to be substantially more exposed to the real estate market again. Uh, which is totally in line with what I planned to do when I said that at the beginning of the year. Uh, for those who do n't remember, on January 21st, I sold all my shares. I answered questions for about an hour when I discussed that I had sold all my shares in a live stream for course members.
I tweeted "sell" that same day, and it took me about 10 to 12 hours to put together a really good and complete video that I ended up posting the next day. And what's really incredible is that, unfortunately, some people got very, very upset that I sold it and think I should have given them more advance notice.
And I thought, "My God," you know, putting together a long, detailed video in 24 hours , you'd think that would be enough, right? No, it isn't. People got angry with me. They said, "Oh, you should have told us sooner." And I reply: "Dude, even if you had sold it the next day, you would still have made a profit." Basically, the NASDAQ went up from Friday to Monday.
So, it's like, come on, guys. And look at all the pain you would have ahead of you. I think some people honestly don't want to take responsibility for their actions. I try my best on this channel, and I feel like I'm one of the few people who actually takes a stand, which unfortunately is very risky.
Because if people perceive your position as, uh, wrong more than right, then, uh, then they feel that perhaps they can trust you less. I, I, I don't believe that's the case. I certainly made mistakes, but I think I was pretty right, uh, during the last year regarding the market again. Yes. Was it perfect?
No, of course not. Nobody's perfect, but, um, I'm very, very confident that, um, being fully positioned in this market is the right move. Um, I mostly logged in between March and, uh, May, June, and, uh, a little bit more recently, when we hit our, uh, old, you know, level 318 on QQQ . And, uh, now I'm just waiting for the stock market to do its job.
And once I do that, I'll transition to many more properties. So, that 's also when I expect the real estate market to be in a calm or downturn, or both. Ultimately, I guess you can't please everyone, but I'll keep trying. I'm not leaving . I'm still here. It has been painful, but I'm still here. Thank you all. Goodbye.
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