저자: Kevin · 외국인
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3월 FOMC 앞두고 연준이 25bp 인상 후 잠시 동결 가능성을 언급. 2023년 전망(SEP)의 성장률 하향 조정이 시장에 가장 중요한 신호이며, 경기침체 우려가 인플레이션보다 시장에 더 민감하다고 봄. 임금-물가 악순환은 없어 폴 볼커식 시나리오는 아니라는 입장. 연준이 인플레이션 완화를 기다리며 결국 금융위기 대응 차원에서 머니프린터(QE)로 돌아갈 것이라는 장기 견해.
다듬은 글
all right now we gotta talk about the Federal Reserve what is going to happen on the 22nd what is Jerome Powell going to do what are markets pricing in and what do we think well it's a coin toss right now and markets are going to flip-flop a lot on Monday and Tuesday but I think what's most important is that we actually take a look at the SCP now we haven't looked at the sap in a little bit it's been a hot minute but what we're going to do right now is we're going to pull up the sap that we got last in December now keep in mind the SCP from December is not the most recent analysis from the Federal Reserve but we're going to get a new version of this on the 22nd of March and we're going to go through it with a fine-tooth comb because I believe that is going to be much more applicable than what the FED actually does with their rate move I think we're probably going to get a 25 BP hike I think a pause would signal too much stress in the banking system I think a 25 BP is a sign of confidence that no are strong we're going to continue to fight inflation and we can continue to do so even though we're panicking in the back end and printing money like crazy we're going to continue fighting inflation and therefore we're going to raise rates 25 BP this is despite the fact that Elon Musk says that the FED is operating with way too much latency in their data and rates need to drop immediately Elon Musk tweeted yesterday but let's look at the SCP foreign excuse me all right uh okay so SCP is right here this is the last summary of economic projections now what I want you to remember is this was released on December 14th when the Federal Reserve conducted their last fomc press conference they told us that they expect that this SCP would have actually been higher if they had to go back to their February 1 if they had to write it February 1.
so come February 1 the FED would have written this SCP more aggressively than what it was here however now we actually expect it to be written down now how could it be written down well we'll take a look at that first we have to remember that inflation is sticky that is something very important so let's go ahead and start with this chart before we look at the sap so let's pull it up like this okay what I want you to pay attention to are the trends here so first I'm going to go ahead and draw uh let's go ahead and do a big old big red okay yeah perfect okay so the first thing I want you to pay attention to is this this trend right here so you see this trend that I drew right here okay that was a problem and that Trend continued to about June of 2022.
see that Trend right here that is critically important the reason that trend is critically important is because of that trend is a Paul volcker style Trend that Trend right there tells you you're screwed you get out do not be anywhere but cash and maybe even gold because we're going to hell that trend is the death of markets that trend is what a wage price spiral looks like that trend is the end of the financial markets as we know it fortunately that trend has stopped and we expect that Trend we're going to look at the new trend in just a moment here and then we'll look at the sap but I want to be very clear about that we are not in that kind of trend line anymore what do we know in a Consolidated 30-second pitch no not for life insurance or 12 restocks or for the courses linked down below with the expiring coupon code linked down below but in a 30 second Pitch what do we know about the market where it is now we know the supply of labor is higher we know there is no wage price spiral we know that yes wages have caught up to levels where they should be which includes some lingering price hikes but companies are taking it in the margin we know companies ability to just raise prices is gone that's over we are not seeing the conditions of a wage price spiral period that means less chance of a Paul volcker from a wage point of view but where is that showing up from a CPI point of view ah consistent as well the conditions for a wage price file are not in labor and they are not in CPI look over here so this is obviously a much more difficult uh Trend here to draw we could draw a trend right here we could also try to wedge this a little bit like this it's it's you know it's a little volatile over here because we have this very large drop but the point is this trend that we had of higher highs is over it's substantially over we know this is still too high right because the trend right here brings us to around four to six percent inflation it's sticky it's a problem but it is no runaway inflation it is no Paul volcker inflation expectations are falling Financial conditions are tight and high this is not a Paul volcker scenario so the Federal Reserve has substantial leeway to loosen their summary of economic projections so let's talk about the summary of economic projections what's up hex Flex dude I love that name uh I had I like I'm a sucker for the Rhymes you know I who was it with um um Sarah dichi made a joke the other day she said her husband uh he's uh he's from South Korea and uh I guess his his screen name used to be uh uh because his last name's Hill uh so he I guess his screen name used to be uh what was it I can't remember now what it was John uh um Kim Jong Hill I think he may or something like that but anyway I'm a sucker for screen names I think that's hilarious uh I can't remember exactly what it was but stuff like that that's cool so what's up hex Flex I don't know why I'm going on that tangent maybe because the coffee hasn't hit yet and I really don't want to talk about this boring chart right here actually I do want to talk about it it just looks very dry so I'm trying to inject humor but I'm failing massively but it's okay it's uh it's six in the morning on a Sunday and I just went to the t-swizzle concert last night and I feel dead inside anyway okay did park next to her plane though that was pretty cool okay that that was like pinch me I can die so anyway what do we have here change okay so first of all I think where we're gonna get and this is gonna I'm gonna tell you my opinion over here because that's that's all we're going to go through is really my opinion here so let's do some erasing okay we're gonna erase this crap I had drawn last time and what are we gonna have over here change in Real GDP so here's what's important in the December meeting they showed that their projection for a change in Real GDP fell substantially the concern going forward I'm going to tell you this is going to be the most concerning for the stock market so if you're an investor if you are a a Trader I promise you the most important and and I okay the mo let me just get it out the most important segment of this summary of economic projections is right here folks it's this box you could really look at nothing else that's the box that matters because everything else is going to be based on that box right there everything is going to be predicated on this top box the fed's expectation for recession that's it and so here's what happens if the Federal Reserve suggests that we could go negative here which I do not think they will ever do that the market will crash instantly the market will crash if that number goes negative I do not think they are going to do that though because this is a tool this is not what they actually really likely think is going to happen it's a messaging tool it's to try to manipulate the market to do what they want it to do okay it's a Communications tool it's a joke that's all it is but but that's okay it's a Communications tool that that just that's really never accurate but the messaging of it will affect Traders at least in the short term so where could the messaging be dangerous they're not going to go negative here what they're going to do in my opinion is they're going to lower this right here that hi Lauren that 2024 number I think they're going to revise that down and potentially although I don't think they go under 0.5 ever uh if they went any under 0.5 over here that's another recessionary indicator but I don't think they're going to do that I think that .16 number potentially could go down so I'm going to write my bet okay I think that number could go down to 1.0 uh uh silly little chart thing here there we go uh if that 1.0 number over here goes down to or sorry that 1.6 number goes down to about 1.0 I think the market goes red I think the market will be very nervous and that's because the markets don't care so much about inflation anymore right now they care about a recession and that is a recessionary indicator and so that that is a recessionary indicator that markets are going to be a little pissy about uh in addition to that uh the 2025 number I'm not so worried about I do think the longer run they'll Trend towards that uh 1.8 and that's so far away nobody really cares but the question is are we going to see that five quarter recession that the uh Goldman Sachs and TS Lombard were talking about yesterday yesterday we covered in our reports that there's a potential for a five quarter long recession that five quarter long recession could begin as soon as uh that would be the third quarter of 2023 and Lasting basically through 2024.
if the Federal Reserve agrees that we could be seeing a five quarter long recession they are going to revise down that GDP figure on their SCP personally I believe that is the most important segment uh of that of this chart and it's one that you really want to pay attention to now uh the next thing we're going to do is let's look at the rest of the chart here let me see okay here we go and remember this meeting is on the 22nd so you really want to pay attention to what's going on on the 22nd okay dokie then so the next thing this unemployment rate now this will be interesting so I want to see if the Federal Reserve actually thinks they can get this number up I don't think they're going to change the unemployment rate much for for 2023 but I would not be surprised if they adjust this 2024 number and this ends up being a five five so I would go 5.5 right here those are going to be my like if I was at The Fad this is what I would do I would be real right here I'd go 5.5 for the unemployment rate I would expect a big take up over here I'd go GDP down to one percent now you're sending real concerns about a recession then what you're going to do in my opinion is for this for this rate trajectory let's erase all this crap over here those are the last notes that we made uh and remember I don't delete videos you can always go back and look at the stuff I said in the past I actually think that's a really cool thing because then we can kind of compare to the Past stuff but so that's why I'm erasing that now is because it's all in old videos anyway so um fed funds right what do we have over here we've got a projection of 5.1 okay I don't think we're going to hit that anymore we're not going to get to that so this is probably going to drop to my previous belief that we were going to hit about 4.8 uh that would probably be like a 4.75 which would probably be consistent with one more 25 BP hike and that's it I don't think we're going to cut this time I don't think we're going to pause this time give us one more 25 that'll signal a 25 or a 4.8 now what a really this could really balance the the market potentially going red on Wednesday what could balance it is this number right here 4 1 is the Fed potentially by the end of the year next year by the end of 2024 are they potentially going to uh signal large cuts by the end of the year beginning of next year 4 8 over here is probably I don't think they're going to want to Signal cuts at the end of this year even though the market is pricing it in they'll want to show no no we'll be strong even though they probably will cut by the end of the year I think this number goes down probably quickly to 3 5 and this number over here probably to 2 5 pretty quickly and those are the 24 and 5 numbers for the fomc rate projections uh so I think you're going to get a slash next year in the projections over here uh and and I don't really think this inflation projection matters much over here you could actually possibly see the FED come in over here and you could actually see them raise this to let's say 3.8 to signal that they're okay with more stickiness so in other words I wouldn't be surprised to see the inflation numbers actually come up the GDP numbers to come down and the rate numbers to come down that'll be enough of a signal that the fomc is okay with slightly stickier inflation and a higher for longer trajectory as a result though trending closer to recession and more unemployment now one of the analogies that I that I was reading about this morning I I wake up too early I'm sorry I really do feel very tired but one of the projections uh this morning um thank you for your somebody donated twenty dollars talking about somebody bought a house for ten dollars what do you in like Detroit you know if you want to want to see me go house hunting in Detroit I did that years ago with graham Stefan you could actually type it in YouTube meet Kevin Detroit you'll see it was a great video uh but anyway um one of the things I was reading about this morning was this idea that people like to think of the Federal Reserve raising uh rates as sort of tapping on the brakes but that's actually a false analogy the Federal Reserve isn't tapping on the brakes what they're really doing when they raise rates is they're pulling a rubber band but everybody basically keeps spending like normal and everybody keeps acting like normal until something breaks and that breaking is not hitting the brakes it is the rubber band snapping and that's what we're seeing with the banking crisis and so the problem is we don't really know what the long and variable lags are of Federal Reserve monetary policy because they kind of hate you all at once and that's one of the problems that we're going to face and we're going to hear a lot about I think with the fomc during the feds press conference I think we're going to get a lot of hey like we have to be careful and I think it would be very good for j-pal and I don't think I don't know that he watches me he probably doesn't it would be really flattering but if I could talk to durable I don't actually think he does but if I could talk to Jerome Powell and I think he knows this my these I think these projections are reasonable and remember every individual at the FED makes their own projections and then they sort of average them right that's why when you look at this you can actually look at the central tendency on the right and you could look at the range over here on the far right and you can kind of see where where all of their heads are uh you know how lower people how high are people anyway if I could talk to j-pal uh I would probably make projections like that but I would probably suggest doing as much as possible to talk about in a transparent manner how mindful they want to be about the lags of monetary policy and how the fact of the matter is they just don't know what the lags are is it an 18-month flag is it a six month lag is it a two-month flag and how do we feel that lag is the lag instantaneous like a rubber band breaking or is it a Breaking of the economy like it in the way that you kind of put your foot you take your foot off the gas in a car and then you slowly tap on the brake right and if it's possible that lags are more of a uh of a oh God they're all happening at the same time then then I think it's important for the Federal Reserve to be transparent about that potential right and so I think if Jerome Powell takes some more time during this this pressure time or even if a reporter is listening please somebody who's in that Press Room asks about is it possible like this if I could ask a question I mean I'd have a whole host of questions in but if I was on the spot right now and being asked hey what would you ask Jay pal in that presser say j-pal can can you win a just as transparently as possible go through what is a long and variable lag mean in the effect of for an average American how do we feel those lags is it by us crashing and hitting a wall or do we feel the effects of monetary policy slowly and then he'll probably go into well I mean interest rates go up slowly right lending conditions tighten financially tighten slowly uh credit card rates go up home rates go up you know that's how we feel that as an average person right and no no that's not what we need to hear we know that we need to know is the banking crisis we're facing the culmination of a policy lag and how bad is that actually going to get how many banks are actually going to collapse now of course there's a limit to how much detail he can go into here because he doesn't want to create a crisis so I think we really have to think about being jaded in the way that you ask a question because if you ask a question that you know he's not going to answer anyway then you've kind of asked a worthless question but any kind of hints that we can get in j-pow talking to us about okay yeah maybe these lags can all come at once and we have to be very careful those hints or what I think are going to be eaten up by the market and it's going to take a lot of thinking about those hints in terms of how we we digest those but I think we're going to get a lot of those hints this time that's what I think this press conference is going to be about it's going to be about hints dropping hints that we're probably going into recession this banking crisis sucks a lot of banks are going to go bankrupt and don't worry we will turn the money printer on again to bail everyone out and so what hints are we going to get for the potential fed U-turn and that I think is the beauty what hints do we get of the potential thread U-turn that is what I am most curious about the hints for the FED u-turn and quite frankly more insight into that fed money printer will be very interesting because that will confirm is what we're seeing right now this switch to QE for the week with 300 billion of liquidity injected is this just a transitory QE and are we still going to stay on the path of QT quantitative tightening or are we going to pause remember the FED is tightening to the tune of 90 billion dollars a month right now what if they come out and say 25 BP uh hints that we're basically breaking the rubber band in the presser higher unemployment and trending closer to recession uh and you know what because of that we're going to slow QT what if they say that hey we're going to pause qt or we're going to go from 90 billion a month to 45.
well that's going to be a sign that things really are breaking right I don't think they want to send that signal with actual policy change so I don't think they'll change policy but I think verbally they're going to give us those hits so I think they'll stay at 90 Bill QT see they can still be a 90 Bill qt per month but then actually be running the money printer faster through the FED liquidity facility so I don't think they have to change policy so I'm gonna I'm gonna make my projection we're going to get 25 we're going to keep 90 Bill QT but they're going to run that money printer as much as they need to to help this banking crisis so nothing's actually going to change accept the messaging that's why we went through the sep the sep is going to matter and how severe is this rubber band breaking j-pal and I think it's pretty severe and I think they realize it and I think we probably are on a path back to QE and as long as inflation goes away which it is trending away I do not believe and look I I respect Peter Schiff I I really enjoyed my interview with him I think he is a brilliant person I I do not think that the 2008 money printing uh from well 2009 on money printing is what's catching up now and that the covet inflation is still ahead of us it was a fantastic argument you should watch the interview uh I respectfully disagree with Peter and that's okay everybody can have a different opinion that doesn't mean a dislike the guy I hate thing I love Peter I think he's a brilliant person and he's a wonder he's got a fantastic family I love them his wife is so cool uh his his son is brilliant uh his his mom is super cool she is so she is like an OG Hustler man so cool I want to make like I want to interview Peter schiff's mom like confronting Peter schiff's mom she's got such a cool story she is like an OG Hustler she made it as a woman were generally only men made it and it was it's remarkable she was like the analogy I would make is that the power woman in in uh in like a Manhattan admin madman setting super cool but anyway uh tangents tangents Kevin damn it but anyway um peace where was I basically uh I don't think we're going back to to uh I I do think that this inflation on screen here is going away and I think the FED knows that they can take their time and the reason I know they can take their time is because they've done it before and I'm not just gonna pull the my my old fate flexible average inflation targeting uh argument out of the Hat again even though I think they're going to do that I'm going to pull a new one okay you ready for this I've talked about this before but it's been a while since we've talked about it opportunistic disinflation study that make that your mission today study opportunistic disinflation by the way this is the kind of stuff why I think it's it's cool if you join me in the course member live streams as well because I do think I have some crazy perspectives that that are unique and different you don't have to agree with me and everything I think that's why the haters come back and they watch me too is because it's good to know even people you don't like or people you want to just punch in the face it's good to know what they think right look into opportunistic disinflation what is opportunistic disinflation well basically once inflation expectations were under control in the early 1980s via Paul volcker the Federal Reserve took 20 years to get back to two percent inflation and they did so because they could every opportunity they had every market crash or whatever inflation went lower and lower and lower and as long as we do not have a wage price spiral which we don't and as long as we do not have runaway inflation which we don't and which we have and as long as Financial conditions are tight which we have the Federal Reserve all the conditions are here the Federal Reserve can buckle up under something you buckle up and you just take your time and you let inflation subside over time even if it takes another decade okay in the meantime you run the money printer and back to the Moon we go baby and look I'm not a moon boy okay maybe I am a but um but but that's what I think
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