저자: Kevin · 외국인
요약 보기
Warsh 신임 Fed의장 취임 후 인플레이션 지표를 Dallas trimmed mean으로 바꿀 가능성이 있고, AI 기반 실시간 데이터 도입으로 금리 인하 명분이 생길 것이라는 주장. 시장은 금리인상을 과도하게 반영하고 있으나 SEP 점도표상 2026년 인상 소수·2027년 인하가 우세하므로 금리인상 우려는 과잉이라고 보며 장기 낙관적 입장. 다만 단기적으로는 SpaceX 하락 및 레버리지 ETF 매도 가능성을 언급하고, 금융주(로빈후드, SoFi) 주도 가능성 제시.
다듬은 글
Well, we just got a new Jerome Powell dude, except this guy is dry like sandpaper. He sounds like a politician. We're probably stuck with the guy for two four-year terms, so eight years. Eight years of this. And boy, every freaking question that he gets us It's almost like he's trying to train the media to not ask him.
His responses are either I don't give forward guidance. Ask the task force. Actually, you can. The task force will let you know. He's This is going to be weird. But, let me just start with what I think he's doing. And uh then we'll get into some more of what he said because there's a lot of reading between the lines you have to do with this guy.
So, let me give you the bottom line first because I respect your time. Bottom line, bullish. Why? Cuz this guy is probably going to change which measure of inflation they use. I think they're going to dump PCE inflation, and I think they'll end up using something like the Dallas Fed trimmed mean inflation.
Which if you look at this, you could actually see right now it's sitting at 2.55%. It's been falling pretty stably. I mean, yes, we've got ups and downs like the stock market, but the trend is clearly down here. And if you look at the actual trimmed mean chart, and you get into some of the details of it here, the one month level is at that 2.55 level.
Six month level at 2.3. So, you're actually almost there at 2%. And if you come in and your task force says, you know, we should be using a different measure of inflation, and then you swap to something like trimmed mean, now you can magically say, "Hey, look at this. We have officially reached a 2% inflation.
Guess what, boys and girls? It's time for rate cuts." That's my take with what he's doing with the rates. Now, he indicates that he's essentially setting up five different task forces. One on communications, one on the balance sheet, one on data sources, one on productivity and jobs, and one on inflation.
I think the inflation task force will end up measuring inflation in a different way. That'll make his job easier because the productivity and jobs one is going to take into account {quote} implications from AI. That's a fancy way of saying exactly what he's been forecasting, that he thinks artificial intelligence is deflationary, increases labor force productivity, and therefore we could lower rates while facing disinflation from AI, and we don't actually have to worry about inflation.
Now, a lot of people are going to be really pissed about that because he comes out and he's literally like, "I'm not really worried about the price of eggs or price of beef. I'm worried about broader measures of inflation, and specifically utilizing real-time data." Now, that's something else. I mean, I basically heard him say, "Long Palantir, boys and girls." And I'll tell you, I just watched the first of the Lord of the Rings trilogy, and I learned what a Palantir was.
That all-seeing ball, that communicating crystal ball. It's not really crystal, it's more clear. But anyway, kind of cool. I actually agree with this. Basically, Kevin Warsh came out and said, "Look, why are we worried about jobs data that comes out at the beginning of every month, but it's not actually useful to us until the third revision?
So, basically, you know, 3 months later. Why don't we actually use real-time data, and then incorporate AI with that data? And so, AI and other real-time sources of data can actually tell us what's happening in the economy in real time, rather than relying on the these old reports that are subject to a lot of revisions, and are subject to really low response rates." He's not wrong about this.
Post-COVID, the response rates plummeted for the job survey, for the jobs the opening and labor turnover survey. All of these have gotten reamed in response rates. And so, the surveys aren't as useful as they used to be. A lot of the surveys are getting filled in, sort of backfilled in with estimates or assumptions, seasonal adjustments.
So, he's not wrong. I actually kind of support the idea of using more updated like tools to determine what's going on with the economy. For example, you know, that could be based on earnings, it could be based on guidance from CEOs, it could be based on actual hiring. Like, even the JOLTS survey includes a lot of job openings that aren't actually really open anymore.
They're just like forgotten listings on online hiring websites, where you could probably use AI to measure the delta, right, the change of job openings month-to-month much faster by analyzing big data, probably using software like Palantir, frankly. Uh and uh and and analyzing month-to-month changes as opposed to these aggregates that could be full of old data.
So, I don't know that. I'm making assumptions on some of those components, but I'm building in what he said, which was we want better sources of data from the private market, we want uh information that is real-time information, we want to use artificial intelligence, we don't want to give forward guidance and then the economy freaks out to what we're saying.
In fairness here, I thought that Kevin Warsh was going to uh talk down the risk of rate hikes. The most he really said about rate hikes was, "Eh, half the people are telling me they want rate hikes, half say they don't want rate hikes." Okay, fine. Which, let's look at what's actually happening in the bond market and what's happening with the odds of rate hikes, and you'll kind of see why the market is reacting the way it is.
Just a quick note, this morning we shouted out Robinhood as potentially being a part of the next sector to get a lot of momentum. And since our shout-out, the stock is up 12 freaking percent. We shouted this out at $96. It's trading at $108 right now. We've done some more fundamental analysis on it as well over in the Meet Kevin app for course members.
Major Meet Kevin stock AI update came out last week for course members. You can get a free sample as well. We're coming out with the Alpha Wire service within the next 24 hours for course members. And so of course we'll be raising the price again. But for now, you can use coupon code Pope. That's mostly because the Pope gave me a nod while I was wearing the Reinvest shirt in Barcelona a few days ago.
You can see that on X. But anyway, join and , all in one membership over at meetkevin.com. Okay, for now though, in addition to awesome shout-outs, let's focus on what's not so awesome. And that is that we only have a 20% chance right now of actually staying stable by the end of the year on the CME futures market.
This is bad. We've literally gone from about a 55% chance of a rate hike by the end of the year to an 80% chance of a rate hike by the end of the year. This is why markets are pissed off. In my opinion, they are wrong. They're absolutely wrong and I'll show you why in just a moment. By July 28th, markets are pricing in only a 17% chance that we will be stable or lower, which is, you know, an 83% chance that we're going to get a hike or multiple rate hikes by July 27th of 2027 or sorry, July 28th of 2027.
This is wrong, in my opinion. But looking at the bond market, you could actually see the bond market is really plummeting the odds of a shock from policy. We can see the 10-2 yield curve has dumped today about nine basis points, which is a massive plummet. The chart has absolutely crashed on this, which is actually bullish for the economy.
Now, why is this happening? It's happening because the two-year yield is rising slightly, and the 10-year yield is rising more. You can see the two-year right now is sitting up about 14 bips, and if I jump over to the 10-year, I want to say it's up somewhere around 34. Let's go here. Come on. Come on.
Come on. There it is. Oh, 4.7 now. Or 0.047, I should say. So, 4.7 bips versus here about Actually, wow, 14. No, you've actually come up quite a lot on the two-year. So, that's actually very interesting. This is This is the market responding heavily to this idea that hey, all right, it sounds like we're going to get hikes.
It's the same thing you see over here on the CME watch group. But, that is not what the summary of economic projections is actually forecasting. This is why I think the market is wrong to assume we're going to get rate hikes this year. First of all, I think Kevin Warsh is going to change the definition of inflation, and therefore we won't need rate hikes.
Because we'll magically be at 2%. I think that's coming. But, even beyond that assumption, look at the summary of economic projections. With 50% of the staff not pricing in a rate hike, the average of Fed staffers still sees inflation going from 3.3 to 3.4 all the way down to 2.3 to 2.4. That is a 1% decline as we roll over from tariffs to run and AI supply shortages, a lapping of annual inflation.
There's a 1% decline is being priced in without a guaranteed rate hike here. So, I'm I'm sort of surprised that the market is believing that, you know, Kevin Warsh just implied there's going to be a rate hike. I don't see that at all. In fact, I could see here you've got one knucklehead who thinks rates should be at 4.4%.
Uh five think there should be two hikes. One think there should be one hike. This is for 2026. But the vast you know, the bulk of people right here at a hold. And I think the bias going to be towards holding and waiting because you don't want to repeat what happened in the 1970s. In the 1970s we saw a lot of up and down adjustments that actually contributed to a lot of a lack of faith or confidence in the Federal Reserve and ended up getting us Paul Volcker to sort of put the pants back on at the Fed.
No sign here that the unemployment rate has any issues. In fact, Kevin Warsh himself mentioned that he is hearing a lot about how stable the unemployment market or the employment market, the jobs market is right now. Uh it also should not have been a surprise that the summary of economic projections implied a rate hike over here.
The market did turn down as soon as we got this. That shouldn't have been a surprise. We've already been pricing in a rate hike all year long. So I was surprised the market did go down after this because we've already known the bond market was pricing in one hike rate hike for 2026. In fact, at one point it was pricing in a rate hike for 2026 and a rate hike for 2027.
Bond market actually still is. But the summary of economic projections is pricing in a rate hike for 2026 and a rate cut for 2027. It's up 25 uh basis points this year and down 25 basis points this year. Now somebody did or next year. Uh somebody did hawk this meeting a lot. Somebody actually thinks the rate should be up almost one full percent.
But that's only one person at the Fed. That's that one dot, that one knucklehead who's really hawkish right now. And it's not Kevin Warsh because Kevin Warsh didn't fill out any projections at all. He abstained from filling out anything. Uh their statement was also substantially shorter. They removed essentially all forms of forward guidance.
Uh and I hate to say it, but the market's revisiting the 725 support line. We bounced off of it earlier when we got the statement. We are falling into the close, which unfortunately does mean that triple leverage funds are likely to come out and also sell into the close as SpaceX is likely to have its first red day here.
I am bearish SpaceX long-term even though I hold SpaceX. Once we get to July and we start getting lock-ups, I think a lot of people are going to be running for the exit on it and I think they'll be better chances and better opportunities to buy SpaceX. We are looking for new sector leadership. Could end up continuing to be finance especially after that boost we saw at Robinhood today.
SoFi might be another a beneficiary of that especially with their home lending sector really exploding. But really long-term here. So ignoring kind of shorter-term moves in the market, long-term Kevin Warsh really came out here and suggested we're going to have a lot of changes that if you look at the housing market, Federal Reserve policy is restrictive.
If you look at the stock market, it's not. He thinks that inflation is a choice, but they don't have major urgency right now. That they have the luxury of time right now to sit down and sort of reanalyze how they want to put data together. Whether they're going to have press conferences or not depends on whether they have an announcement to make or some kind of press conference to give.
He thinks that press conferences should really be reserved for when you have something useful to say. So there is a potential future where we get fewer press conferences with Kevin Warsh. We get a different inflation regime that suggests oh inflation's actually good. He's probably going to push rates down over his term.
I actually expect we'll have lower rates than ever before by 2032. This is a mindset that I've had for the last four years and I think that'll that'll be true. And I think he's going to use essentially more real-time data potentially incorporating AI data to guide the Fed on where they should be with policy.
Obviously there's some risks with that. We've never had AI led data controlling Fed policy or at least advising Fed policy. So it's going to be interesting to see how all this plays out, but I think the bias here is hold until we get, you know, a new explanation for the economy, and then probably cut.
Today though, markets are really pricing in a lot of rate hikes. Right? I mean, this this is very aggressive. You've got uh probably two to even three, maybe even four rate hikes priced in over here going through the summer of 2027. And again, you go to the end of the year, you're pricing in one to two hikes with an equal chance, basically a 1/3 chance for each of them, of a rate hike by the end of the year.
I personally think this is totally wrong, and it makes me bullish because I think money is made when people are not looking at certain stocks. I think in 2022, when I was loading up on Nvidia, which ended up being a 10x in my portfolio, made millions of dollars, I was really grateful for that. Everybody was making fun of me for buying chips then.
It's kind of like, you know, today, it's really unpopular to buy certain stocks that are printing money, that are really cheap in their valuation, and they're cheap at the same time as the market is pricing in rate hikes, when I think we're actually more likely to get rate cuts. Now, we'll see. I could be wrong, obviously.
You know, that's what makes us human after all. But if you want to see exactly what I'm investing in, consider joining us over at mekevin.com. You could use that coupon code Pope. Uh the reason again that Pope is because uh we actually got that nod from the Pope over here. I was really happy about it.
I was wearing the Reinvest Polo. And uh yeah, got to say, it's uh it's it's kind of cool. Uh was not expecting People wait hours to see the Pope, and then we got the nod right there. How sick is that? So, uh somebody told me it's it's um not blasphemous to say the Pope likes you or gives you a nod. Only if you use God in that reference.
So, that that was good. Uh but anyway, that gives us a little bit of a uh breakdown of what's going on uh with uh Kevin Warsh. I I will say he's a little bit boring, a little bit of a politician. I expect a lot of changes to come from the Federal Reserve, but I think that they will bias down. And again, if you look at the summary of economic projections, you could even see that bias down on rates here.
And I think they're going to repel from that noisiness of, you know, oh, we're going to hike and then we're going to cut. I think that's a terrible idea. And in fact, I think one of the most powerful comments that I heard was Kevin Warsh was asked, "Hey, you know, was there like a consensus from the committee?" And the consensus was that there is no consensus.
He in fact called everybody pretty humble and you know, pretty willing to listen to other commentary and potentially even change their minds. And so there was no overbearing push towards one direction or another, which is very consistent with my belief that we're likely to do nothing until we get a cut.
The market is totally mispricing that in my opinion, which creates a long-term buying opportunity. So yes, that makes me bullish, probably sitting somewhere around an 8.3 on the bear-bull scale right now, which you know, is pretty elevated. Certainly not desiring rushing into debt. I'm not a big fan of debt because I do think that there you know, the next time we have a recession, whenever that comes, it will be one of the worst and Kevin Warsh will actually contribute it contribute to it being bad.
He'll cut rates to zero, but he won't print money like the other guys, like a Paul Volcker or Janet Yellen or Jerome Powell. He won't print money like that or at least he'll try to resist from that. I think that his task force will also advise just that, which is is unfortunately bearish for a recessionary period, which makes me very uninterested in debt.
But with that said, overall I'm optimistic here. I I I hate to say that I like what I heard because I'm tired of hearing task force. I am excited though about hearing, "Hey, we're going to update like how we collect data and how we analyze data." Honestly, it's long been needed. So, we'll see what they come up with, but respect for trying because I agree that that the data is quite dated.
Anyway, there you go. Thanks so much for being here. I always appreciate you watching. I consider sharing, subscribe to the video or the channel. Feel free to follow me on X @MeetKevin or on Instagram @RealMeetKevin. I try to post there every day. And uh go to meetkevin.com and use that coupon code poke. >&g.
Comments 0