uhg.... What Jerome Powell JUST Said

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파월 연준 의장 발언을 분석하며, 금리 인하 기대는 아직 이르고 연준은 금융여건 완화를 막기 위해 고금리 기조를 당분간 유지할 것이라 주장. 노동시장 냉각과 근원 서비스 인플레 둔화로 인플레가 2%로 향하고 있으나 연준은 이를 쉽게 선언하지 않을 것. 주식은 단기간 급등보다 시간이 걸릴 것이므로 장기적으로 분할매수(DCA) 관점 유지 권장. 하우스학(하우스핵) 참여 독려 및 자신의 실제 포지션은 장기 롱이라고 밝힘.

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01. well drone Powell just finished speaking and wow there's a lot to unpackage let's get right into it so drone Powell said something delicious and juicy he says look the whole point of higher rates is to tighten Financial conditions he says quote that's literally how it works and so what's interesting is you've noticed Jerome pow in the FED been a little bit more fussy and maybe hawkish and look at what's happened to financial conditions this is the Goldman Sachs Financial conditions index the Federal Reserve started hiking right around this region right here you notice that these Financial conditions really started relaxing and actually even relaxed during the banking crisis a little bit of a spike there but then a relaxation again we are almost at the tightest Financial conditions now though that we've seen following bond yields now at almost 5% for the 10-year treasury at uh you know the geopolitical risks that we're seeing the lack of a house speaker that we're seeing right now the 10e sitting at 4.96% after that presentation that's up slightly oils up slightly again at almost $92 these are some expensive issues that people are very concerned about and rightfully so what's interesting though is drum pal says he talks to businesses regularly and he finds that the economy is strong the consumer is strong where there's pain is potentially among smaller more cash strapped companies early stage companies that don't have cash that they can invest in treasury bonds for example at house hack we have money sitting in money markets or Treasury ones running like 5 to 6% it's crazy it's amazing uh deadline by the way for an investing in house cack is November 1st that's the other fed day coming up but drum says look many forecasters were saying we'd be in a recession and here we are inflation's going away and we're not in recession and he's not actually wrong if I were jome Powell I'd be cheering right now I'd be like bro we basically didn't break anything we still have under 4% employment jome Powell is talking about how unemployment has not been under 4% for this many many months in a row since the late 1960s that's over 50 years over half a century lows of employment that we're facing right now yet the economy is still moving and still chugging along above Trend now Dron Powell thinks we might have to get the economy under below like under Trend to actually and he says we're at Trend right now with economic growth he thinks we might have to get the economy below Trend to actually reiterate we're not stopping until we get to 2% but overall so far a lot of wins what about the banking crisis people say well of course they created the money printer banking facility for that which basically said don't worry if treasury yields go up and your bond values go down fear not we'll still lend you money assuming those treasury bonds are worth 100% because we could always just take them and wait till maturity we got time that basically overnight solved the banking crisis really really incredible now what I really want you to think about that he said which was in my opinion somewhat there were two game changers here okay one without I'm about to talk about and the second one that Nick T pointed out which I also noticed in his speech the first one is that he actually showed us his hand he said something that a lot of people missed it just right over people's head below their knees he said it really clearly he said look if people seriously expect that we won't stop until we get to 2% inflation then we'll get to 2% inflation then he said if people didn't believe us we would never get there and I'm paraphrasing now but he basically said if we came out and said we're done and we're not trying anymore to get to 2% then bond yields would plummet bonds would rally and financial conditions would loosen really rapidly and then we wouldn't get to 2% so basically even though inflation is going away and in his commentary in his prepared speech his prepared remarks he basically suggested there's a lot of volatile data we have inflation coming down inflation was really great this summer we had a little bit of a pop in September but that's probably just volatile data and we don't really have to be that heavily concerned about that we have to keep putting on the face of strength until inflation's basically meaningfully on its way to 2% because as soon as we say we're done bond yields plummet and that makes it harder to get to 2% in the first place so in other words even though we're trending towards 2% and everything's going great we still have to pretend like everything is bad because if we stop pretending then we'll unwind the progress we're making it's like a Topsy Turvy world but Jerome Powell is so clear about that he is so Crystal Clear about that there's no secret here he's being very blunt and blatant about that but everybody wants to forget that there's this fear that there's actually still an inflation problem there's not and every inflation report that comes out oh my gosh there's a real inflation problem there's not even in today's conference drum how's very clear look what caused inflation was a massive cap capability of demand coming at the same time as a supply chain shock driven by coid and even in countries that didn't print as much money as we did they also experienced massive inflation because these supply chain changes with high demand but that's not what we have going forward so he says we're basically on the trend to maybe even going below 2% inflation just like where we were in 2020 12 through 2019 we can go back to that and if something breaks we're not up against the effective lower bound that's a big deal the effective lower bound the elb is zero 0% rates it's basically a way of saying if you're at zero and something breaks how do you cut you can't cut but we're at 5 and a qu% you have a lot of room to cut if something actually breaks the second Big Game Changer was what he talked about about Labor this is something that Nick T from The Wall Street Journal pointed out as as well and as I went through the transcript the first time I actually wrote wow next to it twice I'm going to read you this because it's the most important part out of the actual prepared remarks in the labor market strong job creation has been met uh with a welcomed increase of a supply of workers due to higher participation and a rebound of immigration many indicators suggest while conditions remain tight the labor market is cooling good that means less of a wage price spiral perfect or no wage price spiral job openings have moved down from their highs and are only modestly above pre-pandemic levels that's a wow right there in the past he used to say we want one to one now he's like yeah we're only modestly higher on the jolts right now this isn't that bad we don't need to go to one: one he's basically undoing what he previously said he's flip-flo he's like nah one: one's not that important we're okay being modestly above otherwise he wouldn't say it's modestly above he would say there's still progress to be made this is good that's a flip-flop from the FED what's another one the one that Nick T pointed out has to do with inflation and here it is quits are back to prepandemic levels the same is true of the wage premium earned by those who change jobs surveys of workers and employers show a return to pre pandemic levels of tightness in other words remember how Drome Powell is so worried about inflation coming from that third part there are three parts Goods housing and then Services X housing okay housing we know is coming down goods inflation is coming down put those off the shelf what do you have left Services X housing okay what drives Services inflation X housing first of all what is that it's the person who cleans your teeth it's the person who cleans your house it's the person who does your tax returns your lawyer your funeral parlor it's your veterinarian it's your doctor these are Services okay Services X housing those prices go up when wages go up unsustainable ably Jerome Powell basically here is saying wages are going back to what you would expect or would have expected pre pandemic what inflation did we have pre pandemic 1.75% we had below Trend inflation right now he's flipping he's basically saying look we're not really like between you and me we're not really getting inflation anymore like the inflation problem's done now we have to be sure it's dead and the way we're going to be sure it's dead is by pretending we still have to be at these high rates if something breaks we can cut but until then we'll just sit here at these restrictive levels and we don't think these rates are too high because the economy is still doing well but we're just going to sit here uh until we get to the lower rates because as soon as we signal that we're going to U-turn bond yields will plummet off a cliff and that'll loosen Financial conditions which could lead to Grandma and Grandpa going back on margin into Robin Hood and and yoloing stocks and then you get another bubble that's what they're trying to prevent so this is a manipulation and he's being he's been very transparent about it he is like bluntly telling the economy hey um I don't believe you that you are going to sustain 2% inflation so I'm just going to ream you until inflation is 2% so what does that practically mean well practically means if you're investing in stocks you can't be a little weeny baby you're going to have to buckle up and realize it's still going to take time for stocks to moon and go to new highs that's going to take time and that's okay that gives you years potentially here to DCA and increase your position in stocks that you think will matter in the long term 5 10 years out I'm not here to Advocate trading in and out every single day you know just because elon's a little doesn't mean we need to dump Tesla stock although some people are dumping Tesla Stu CU they're like damn he really a big problem but anyway we talk about that in a separate video point is longterm drum Pal's pretty happy Jerome Powell's winning Jerome Powell is setting up for his statue because he is winning and he know knows he's winning he just doesn't want to risk giving up it's kind of the way I think about it is imagine you're on a Marathon run okay and you're winning you're in first place you don't want to be the guy who slows down right at the end before the Finish Line puts your hands up and goes yeah I'm winning and then the second place person runs past you it's happened plenty of times in sports and it can happen with the economy as well Jerome Powell's in first place he knows he's winning and he doesn't want to F it up what else did he say a little bit of talk about the Phillips curve big deal it's flatter than you would expect he talked a little bit about how he felt in 2012 when everybody's like we're going to have inflation and this is actually funny he's like oh everybody in 2012 is like there's going to be so much inflation and he's like bro there's no inflation and then inflation's low for like eight years thereafter like he's like so clearly telling you the road map for the long run again shortterm sucks long run he's like very clear here this is actually very transparent banking crisis we have a facility for it no major risks to Banks from a commercial real estate shock could there be more shocks of course uh interest rate spending sectors are starting to show pain that's housing that's cars that's Elon Musk uh but we still have strong demand strong demand strong savings higher than we expected uh let's see here 5year break even by the way up again 2.4% 5year forward Break Even 2.5% uh in the past 25 years we may have had lower inflation though because of AG in higher savings he does think there is a risk that the neutral rate will be higher going forward but quite frankly he has no effing idea what the neutral rate is going to be and nobody does we could only speculate on it I speculate that it's going to go back and probably be even lower thanks to competition and Innovation he thinks it'll be somewhere in the middle some people think it'll be even higher that's like we can place bets on that that's crystal ball stuff that stuff doesn't matter right now but the point is this is uh this is a pretty neutral speech I don't think this is the dovish uh drone Powell people were hoping for though as soon as you get a doish drone Powell you know yields plummet and and all the stuff that they don't want to happen happens so this is not unexpected what is what also should not be unexpected is the deadline for house hack November 1st make sure you go get involved in house Haack if you want to be involved in a startup uh we'll be posting a lot of housec videos over the next two weeks to show you some of the progress we making how fast we're making progress really really exciting uh we got to hit the disclaimer keep in mind I am a licensed financial adviser I'm becoming a licensed stock broker already passed my Series 7 and another related test uh and I am a licensed real estate broker but despite all this uh I'm not short the market long the market long some of the stocks that I mentioned so I got to be clear about that in other words good luck I love y'all I'll keep bringing updates to y'all and you know what I'm going to keep speaking my mind because all the little weenies who are like oh ke Kevin's only mad cuz of this or oh Kevin I see you I hear you if you have a good perspective I'll say you're right and if I think you're wrong I'll tell you I think you're wrong but one thing we ain't doing anymore is caring about the carens all right folks I appreciate you we'll see you the next one goodbye good luc