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Well, it's official. Jerome Powell just told us exactly what we thought we were going to hear. There is time to wait. This is not what the markets wanted to hear, but it is what we expected to hear. Despite Jerome Powell being begged by Donald Trump to please cut interest rates today, Trump Powell says, "No, we have plenty of waiting to do." And this comes on a day when we are now hitting the highest volatility we have seen since the Japanese carry trade in August.
We have the highest buy the dip volume in a decade with $4.7 billion of buy the dip on Thursday per JP Morgan in contrast to what hedge funds are doing. People are buying the dip like crazy right now. Whereas guess what hedge funds are doing? Hedge funds on Thursday, same day. So yesterday sold global equities on a net basis.
You know, long short, so neted out the largest one-day level of selling since 2010. So in other words, in 15 years, hedge funds have sold the most yesterday and retail bought the most in a decade. What a crazy tale of two cities here. Buy the dip on one side and getting the f out. GTFO on the other.
And we really saw this if you looked at the market close yesterday. Last hour was basically straight down. often when you see a lot of that institutional trading taken off. One thing you're not seeing take off just yet are flows into inverse ETFs. So, we're going to watch those because usually that could be a sign of peak pain when people max out their bets on those.
Now, we're going to talk about all the details of what Jerome Powell just said, but some things to pay attention to in terms of what's news right now, uh, is there are estimates now that iPhones are going to go up from $1,000 to $3,500 due to tear. The Tax Foundation thinks the average American family will be paying $2,100 more per year due to tariffs and they think GDP is going to shrink by8%.
Clara is pausing their IPO due to this, you know, tariff turmoil. Kind of a terrible time to IPO. It's one of the reasons for House Hack, my startup. We were going to go public in January and I had a really bad feeling that things were going to get a little poopy in Q1. So, we cancelled our House Hack IPO.
were like, I don't want to IPO during a really crap time. And look what ended up happening. Knock on wood when we can time it like that again in the future. But except on the upswing. Uh, Republicans are also considering a 39.6% tax bracket on those making over $1 million. And so far, Bitcoin's holding up pretty well.
I think some of this might be because of Micro Strategy buying, but anyway, stay tuned. Now, before we talk about Powell, we need to talk about this Vietnam news because Nike and Restoration Hardware had a little bit of a boost after Donald Trump commented that the general secretary of the Communist Party of Vietnam wants to cut their tariffs down to zero if they're able to make an agreement with the United States.
The first thing that you have to know about Donald Trump though is remember he's a salesperson. And something that happens a lot, especially in real estate negotiations, is you'll get an agent calling going, "Hey man, all the other buyers are coming up in price. You going to come up in price?" Right?
It's sort of like a way to get everybody to bid against each other. So, because this news is coming from Trump instead of directly from Vietnam, there's a little bit of an asterisk on it because of the salesmanship that could be coming from, you know, Trump's POV on Vietnam to encourage other countries to start bending the knee, right?
Once one does, maybe all do is sort of the thought. Now, something else that you have to remember about Vietnam is we imported about $123.5 billion from Vietnam to the United States. They only imported from us$26 billion. They had average tariffs on our stuff at about trade weighted at about 1.1%. Okay?
So 1.1% on 26 billion is what they would give up if they get rid of their tariffs on us. We have a 46% tariff on their $123.5 billion of goods right now. So obviously there is also the argument that Vietnam stands to benefit a whole lot by getting rid of their 1.1% which you know maybe that was the goal all along.
It just puts everybody through some real short-term pain. And that's obviously why there's so much by the dipping because people believe that this is just going to be a short-term negotiated strategy to not destroy the economy but rather to negotiate 000 free trade. Who knows? Because we're not entirely sure how that 00 free trade is going to align with this idea of bringing manufacturing back to America.
We had a big discussion about bringing manufacturing back to America this morning in the course member liveream and we're looking at some of the arguments on both sides of this. Uh long and short, it's very difficult to compete globally. Uh and so there would take a lot of infrastructure, industrial expansion, and training in the United States to actually bring this back.
Uh China obviously had retaliation this morning. And then we're going to talk about Jerome Powell. China's 34% retaliation this morning is significantly more calculated than what we imposed on China because they're purposefully in addition to that 34% trying to hit us where it hurts. They hit seven rare earth exports that they're now restricting to us.
Really important to remember that China controls 60 to 70% of supply of the U of of rare earths in the globe. Uh I'm going to butcher some of these names but whatever. Seamarium is used in magnets, motors, nuclear reactors. Gatalium whatever is used in MRI/LR LED lighting. So for contrast colors, turbium is used in LEDs.
Disprosium is important in electric vehicles, wind turbines, high performance magnets, motors, uh lutium, medical imaging, petrol refinering, some electronics and scandium, aerospace metals as well as uh utrium whatever superconductors. These these are important battles. They're trying to hit Trump where it hurts.
Probably also their version of negotiating, but uh restrictions on these rare earths when China basically controls 60% of the supply is problematic. This is one of the reasons why Donald Trump wants a crit critical minerals deal not only in Ukraine but also wants Greenland because Greenland is expected to have access to somewhere around 40 different critical minerals.
Though obviously mining over there is a little bit more challenging just because of the weather. Now, as far as Jerome Powell, there were these really large expectations today that Jerome Powell was going to come in and cut rates. In fact, I've been responding to tweets on X and and I hate doing this because it's so one-sided on X.
It's it's a very right-leaning platform. And you know me, I just look at the facts and reasonable data. I don't care about your politics. Uh but there's so many people on X that are getting all these likes and retweets because they're like, "Powell should cut rates." And this was before Donald Trump even said Powell should cut rates, though we know what that's what he wants.
People are like, you know, Powell should cut. Powell needs to cut. Pow needs to cut. And everybody's like, "Yeah, Powell's going to cut." And so, I think there was some expectation that Powell is going to like announce some cuts today. That's insane. Of course, he's not going to do that. He's totally stuck in a rock in a hard place.
He had job data this morning that actually reiterated that he should hold higher for longer. I mean, consider the job data this morning. We came in at 228,000 jobs versus the 140k expected. This is great. Absent tariffs. This is actually good news. This is fantastic news for the economy. Now, we did have a minus 34 on the one-month revision.
The two-month revision is minus 48. Still a great read. We had 20,000 workers coming back uh from strikes. And we had some state and local government hiring offsetting Doge related firing. We also had warmer weather in March. So, there are potentially reasons why we saw almost all sectors, transportation, retail trade, social work, healthcare move up in hiring rather than down.
Uh there's also this idea that there's a lot of pull forward of demand. We need more workers now to get ahead of the tariffs. So, the jobs data was really good though. I mean, you could say bad things about it, but it was pretty good jobs report overall. The problem though is Jerome Powell is destined, and this is what he talked about.
He's destined when it comes to a choice between jobs and inflation. He basically implied that they're going to go for supporting the jobs market when and if the jobs market actually breaks. So far, there's no sign of the jobs market breaking. So, they could focus on inflation, which is running around 2 and a half% on PCE now, and is expected to rise to three to three and a half% after these quote larger than expected, that's what she said, tariffs.
The thing about Powell is when Powell reacts and capitulates and we start seeing rates actually come down from Powell, it's going to be in response, very likely to the job market faltering. The problem is by the time the job market falters, it's probably too late because it's going to take a lot of time for those lower rate cuts to actually work their way through the economy.
And so we probably are already in a recession by the time they turn around and cut. This idea that the Fed can preemptively cut, I think, is misplaced. Markets right now are pricing in four rate cuts for this year. That's double what we were pricing in a month ago. Mind you, a month ago, markets peaked out.
Right at the end of February is when markets peaked out. That's when my fund gave people $40 million back and said, "Be careful. We're about to end. We're about to go into a poop show, you know, after returning 25%." You know, if it was still open, we'd probably be substantially outperforming right now because the holdings we have or had were very well positioned for rate cuts and hedging.
We were on triple leverage bonds, which have been skyrocketing over the last month. We were on uh mortgage companies like Rocket Mortgage, huge holding just skyrocketing now and they're pulling amazing things off with their acquisitions. We've been talking about those in the meet Kevin membership as well.
Some of the acquisitions and the longer term implications of where the value of Rocket Mortgage actually sits right now is uh and and is it a buy the dip opportunity in this market? Anyway, uh Jerome Powell uh see that at meet.com. By the way, many of you already know the price is going to go up on that Meek Kevin membership on April 15th.
If you lock that membership in now, which is less than a buck 170 a day, uh you will lock that price in forever. You know, if that pricing goes to say $3 in the future per day, you've locked in 170 forever. So consider that over at mekevin.com. But anyway, Jerome Powell, he gets you all the courses, all the alpha reports, all the lectures, all the live streams we do, the course member meetups, you name it.
But anyway, Powell made it very clear that with jobs holding up, it's not really necessary for Powell to even consider cutting right now. and instead it's important for them to be very patient. He says, quote, "It's too soon to do anything. We are well positioned to wait for greater clarity before considering policy adjustments.
Tariffs are likely to rise as infl raise inflation uh in the coming quarters with more persistent inflation possible." Now, this is interesting because it's a total flip-flop from what we heard like a month ago when Pal was like, "Ah, tariffs might end up being transitory." And then everybody's like, "No, no, no, no, no, no, no.
He's bringing transitory back. No, it's already gone. It's already over. It already looks like a joke." So, it's clear to the Fed that the tariff effects will be significantly larger than expected, that the outlook is highly uncertain, and the obligation to make sure these one-time increases don't become continued price increases is high.
And while the jobs market and the jobs data today tells the Fed, "You have no rush." Jerome Pal is just going to sit back and go, "Huh, I guess we'll just wait and see, you know." Hey, by the way, I like purple ties. Why do you wear purple? I like the tie. He told us that today. Although then he did say, "Oh, should I wear a red tie?" No.
Should I wear a blue T? Nah, I'll stick with purple. So, politics sort of reaffirms his belief, which is not a surprise. We've all known that anyway. But anyway, this idea that the Fed's going to be focused on uh you know, the dual mandate. Well, of course. And what does the dual mandate tell the Fed to do right now?
Nothing. It's that simple. So, this idea that people and and I said I've been saying this in the course member live streams and actually on the channel. Don't expect Powell to bail you out this week. He ain't going to do anything for you. He's not going to do anything for you for a while. Markets are pricing in the a 36% chance of a cut in May.
I think the chance of that is zero. Uh although we'll see what happens between now and then. Markets are pricing in the first cut for June, fully priced in. Markets are pricing in a second cut in July, fully priced in. and markets are pricing in two more cuts by December fully priced in. You have four cuts fully priced in right now.
This is happening while we're seeing some, you know, inflation expectations start creeping up. And Jerome Powell does make it clear that the consumer is critical to our economy here. So, you know, are people going to stop spending? We don't know. People spent during COVID. People spent like crazy after COVID.
People just say they're negative, but then they keep spending and the economy keeps going. So maybe that's a bullish reason to keep buying the dip. I mean, I actually think the best coupon code ending ever is not the fact that at some point we're going to close the fundra for house hack where you get, you know, 5% yield, diversify away from the crazy stock market.
Uh you get upside, all of the upside in the stock, 5x, 10x, 2x, whatever ends up happening with the company, 100x, you get all of that with downside protection. It's a really cool offer over at househack.com uh for diversifying, you know, read the ppms and circulars. But but beyond that, uh what's a really amazing coupon code is this idea that hey, buy inventory now at companies like Restoration Hardware or buy a car inventory now because it's not yet subject to tariffs.
Interesting. I mean, just this morning, we heard that the Nintendo Switch pre-orders are being delayed because they're not sure they are able to price it at the same price anymore because of the tariff drama. Nintendo Switch 2 doesn't come out until I think it was June 5th anyway. So, I guess there's some time on the pre-orders, but we'll see.
Uh, Jerome Powell says he's frequently in contact with other central bankers and sort of he's he's jokingly asked if you know they have a group chat or a signal. Uh, and Powell says uh they're not at liberty to say. Uh, and then when it comes to housing, Jerome Powell nails it here. Jerome Powell says the problem with housing is most housing markets in the United States, not all of them, you know, they're definitely overbuilt housing markets, but most housing markets in the United States are underbuilt, under supplied.
And this creates this sustained housing value. And in my opinion, that's what's so desirable to what we're doing at House Hack because you're diversifying away from this craziness into where there's a housing shortage. Uh and then obviously upside in what we're doing as a company beyond being backed by, you know, over $60 million of actual real estate.
Anyway, so so this gives you a breakdown of the jobs data and POW, but I want you to relate this to what's going on with tariff negotiations. Remember that the biggest tariff negotiations we need to pay attention to are the European Union, which we still haven't seen the counter measures there, and they're expected to be quite big, including potentially a billion dollar fine to Elon Musk for spreading misinformation.
That's interesting. uh topic really for a different video. But also this idea of China like how are we going to negotiate with China? Vietnam is relatively small when it comes to our total trade. You know, our total trade in terms of uh imports sits somewhere around $4.4 trillion that that we might actually be able to tax.
Uh and 26 billion of imports divided by uh you know $4.4 trillion is less than 1.5%. So, this idea that, you know, uh, Vietnam is is solely good news, that's not the big player you want to pay attention to. You want to pay pay attention to the to the big players. Uh, actually, I'm sorry, it's a little bit more.
12, it's 123 is what we import divided by 4.4. Vietnam works out to about 2.8% of of our imports. Sorry, let me correct that. Uh, but, uh, we want to see the big players and we still haven't heard from Vietnam themselves. You know, this is Trump's POV. It's a good sign, though, that Trump is willing to negotiate even though he kind of keeps telling us that he doesn't want to negotiate.
wants to bring manufacturing back to the United States. I think everybody's pretty convinced that this is all just a big negotiation to try to get to zero zero free trade and then we're right back to free trade. At least that's the hope. You know, if we really are trying to bring manufacturing back to the United States, probably going to go through a dirty recession and then you could pull it off because then you could subsidize the manufacturing in the United States as a form of stimulus.
You know, industrial work programs like a new works progress administration or whatever. Oh, interesting. US judge rules Trump administration violated court order by freezing FEMA grant funding. Interesting. So anyway, we'll we'll see where it goes. Uh if you want my trade alerts or commentary on the marke meetups and be part of a rational community.
We're not like, you know, we're not we're not going to put left thoughts down your throat. We're not going to put right thoughts down your throat. We're agnostic to politics and we're just trying to provide perspective. You want to be part of that community, join over at mekevin.com. And then of course if you want to diversify away and earn 5% per year, you get paid monthly by the way, go check out househack.com because on top of that 5% you get all the upside we're able to pull off over at the company and uh and boy, we think we are gloriously positioned for whatever the heck happens in this economy.
Uh so we kind of think we're almost like a counteryclical trade at this point, which is really exciting. So anyway, thank you so very much for being here. I really appreciate you always watching, whether you're on live or or watching uh uh the videos. I always appreciate you being here. appreciate the support.
Always leave me your comments and perspectives. Uh whether you like me or don't like me, I hope you appreciate the perspective. We'll see you all uh in the next one. So, thanks so much for being here. We'll see you. .
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