We might have a rate hike for literally every single meeting for the remainder of the year. There's like six more after this one and maybe then the first one of 2023, or maybe they have an emergency one to raise it again. Whatever it is, people are like wow, that's that's actually pretty hawkish, that's pretty extreme, especially because six months ago they were still being super accommodative to the overall economy like they were still continuing to buy mortgage-backed securities bonds uh. They were helping with the repo market and no one.

No one was calling for a rate hike that now that was just six months ago and now they're saying hey. We actually might do seven in a row counting the one we just had, or maybe seven this year, counting the one we just had and then you even had bullard, who is the fed member out of st louis who's? Like you know, in fact, i didn't even want a 0.25 increase. I wanted a 0.5 which that is a very, very hawkish tone, but to be fair throughout all this bullard has been, i would say, arguably one of the more hawkish guys in this scenario, just trying to battle inflation, because people are trying to not like fall behind The curve on that another thing that's been really really discussed. Is this whole concept of the yield curve it flattening and if very, very quickly, to understand, remember you buy bonds, bonds, pay yield.

Basically, your money's tied up and for your money being tied up for x amount of time you get a little kickback for that. Well, obviously, the longer your money's signed up, you get a more of a kickback. Well, if the payoff for the 2 and the 10 is the same, that's telling you that, on a relative basis, people are really favoring the 10, because they don't have that much optimism for what's about to happen in the short term. And what i'm talking about there is basically the two year yield so you're going to hear a lot about the 210 flattening and around 230 right before pal actually started talking because remember, there's a 30 minute delay between the results being posted and powell actually talking.

We saw things going down, the market was going down, the market was going down, the market was going down and we saw that they weren't that close to flattening, but they were heading in that direction. I'm talking about the two and the ten year uh so that had people like uh all right, big money's, not that optimistic about what the market's about to do over the next two years. But in terms of like okay. How good are things? How bad are things like? How are we defining good or bad? I want to give you some numbers so right now the inflation, the most recent inflationary report was 7.9 and that's the consumer price index.

The median fed member is projecting for it to get to down to 4.3 by the end of this year, 2.7 in 2023 and 2.3 in 2024. Right now we're at 7.9, so even by this year, with their rate hikes of doing one, every single meeting, they're thinking, they could get it down to 4.3. So that's once again for on inflate or inflation, unemployment is already very. Very solid.

Unemployment is coming in at 3.8. They actually think it'll drop to 3.5 by the end of this year and they're looking to coast at 3.5. That's a very, very good reading and if you keep hearing jerome powell talk about it, he'll keep referring to how tight the labor market is another thing to consider. Last year, the gdp growth was 5.8 percent, which is sky high, very, very high this year, they're looking for it to drop down to 2.8 by the end of the year.

For like the 20, 20 22 numbers, and i get that's a notable percentage decline. But it's still a very good number and then they're looking for it to drop even more in 2023 to 2.2 percent and then 2 in 2024. Overall, those are like the major numbers when i'm talking about the tight labor market. Another thing that they really try to like get home there was labor supply is down uh for every like person seeking a job, i suppose like actively in the labor force.

Looking for a job, there's 1.7 job openings, that's important to know so labor supply down, but overall we're in a scenario where inflation is high. Maybe we can hit that 4.3 by the end of the year. Maybe we can. Maybe we can.

I don't know, but in real time it's very hot, very, very high and in real time, there's also beyond just like the supply chain issues that we've been hearing about on an individual like level per company. We've been hearing about these really just the economic contraction that could be actually expediated by the whole ukraine, russia ordeal that we currently see and with it, depending on what tweet or what news source you're reading or not reading. Sometimes you hear a positive thing of like hey we're, making progress on the topics talks and then all of a sudden, like the white house today said, putin has made no efforts to actually like uh, improve things like to stop his like wartime actions. So a little bit of a mixed bag there.

In that scenario it could prompt a global economic retraction which would be bad for gdp and then all of a sudden, if you're at sky, high inflation and gdp is shrinking well now you're in literal stagflation. So that's one way this could break and, i would say that's more of the bearish route, but then on the bullish route, like i said, they're looking for unemployment to it's already very low they're, looking forward to edge a little bit lower they're looking to take really Rain in inflation, ideally by the end of next year, and then at that point, it's not like that far out and in terms of the federal fund rate right now, it's up to like 0.25 and they're looking for the median projection to be 1.9 by the end Of this year, 2.8, 20, 23 and they're, keeping it at 2.8 for 20, 24., so overall yeah. This is above, like the neutral rate that they're shooting for of 2, but it's essentially just to counteract really their unlimited quantitative easing that they had to do over the past what two years to help us get out of the whole pandemic era. So a lot of interesting things going on and really today is a very very good example of that saying in the like, in the world of reactions to fed policy of the first movement is typically the wrong one.

And what do i mean by that right here? Let's just check out the spy at 2 pm we sold sold, sold and then jerome powell started speaking at 2, 30 and boom. We popped right off of that. So this is why we have that saying when it comes to monetary policy meetings, the first move is typically the wrong one and once again, that old adage is currently holding true. So i just wanted to share that with you.

We saw the same thing in bitcoin. Bitcoin went from forty thousand down to thirty nine thousand four hundred, and then we almost went damn near back up to forty one uh. I had mullen up just because i was curious if it was gon na break above a dollar 75. I myself have no position in mullen and then i was looking at bonds.

These are the 20-year treasury tlt uh. You could also look at things like hyg, which this is a box. One shares ibox high yield composite bond etf, same thing, sold off popped. You could look at things like gold.

Gold had a crazy reaction at first, it actually popped. Then it sunk now. Gold is ripping so like just crazy, crazy volatility prompted not only by the initial announcement at two but then on the retraction um. I i suppose the market doing the opposite after powell started speaking.

But overall, if you listen to his speech - and we were streaming that on the crypto channel shout out to everyone who came over there, we broke 5000 subs. So i was happy to enjoy that milestone with all of you um, but talking about what we're seeing right here, like just so much so much insane volatility i mean, and on the spy someone pointed out over there, uh we saw both gap fills both gap fills So this morning we saw it to the upside this afternoon. We saw it to the downside and then that bounce like, if you listen to the full speech of what i was just saying, uh, he was just very, very confident. He like he multiple times he was like hey.

I look at like all the fed members and like we have this like we have the tools at our disposal to have this under control. He had a very firm tone that he had a grasp on the situation. One of his quotes was that we are not going to see a recession this year. Basically that wasn't it verbatim, but he said i think it's we're not going to see it.

I pray fingers crossed that he like doesn't have to like eat those words. One of these days um that's kind of a bold statement. I'm actually surprised that he said it, but i don't know. I really the other thing that i don't get he's like this inflation.

It came out of nowhere dude your balance sheet is nine trillion dollars. Well, if we want to be technical 8.9, but let's just round up it's 9 trillion dollars. What do you mean this inflation came out of nowhere. You were printing money like a drunken sailor and i get like hey.

You might have your reasoning to do it. Maybe you're saying well, the alternative would have been worse if we didn't do anything and we let the economy take the full-on brunt of the hit from rona, okay yeah, that, like maybe we can have that discussion but overall, just to say like oh we're, like super Surprised like man this, this inflation, it was hiding in the closet and i had no idea what it was doing like. Ah, that's a little silly, that's actually a lot of silly. That's not even just a little silly.

That's a lot of silly man like 9 trillion that you didn't do that by accident and if you're like anything in this world, if you're, like loading up on supply and demand's the same well yeah you're going to devalue it like, of course that's. What do you think happens when you put 9 trillion dollars into economy? Of course, you're inflating it like dude? You could take econ 101 and understand that breakdown.