Money printer goes burr at 2 pm. We got the fed meeting minutes and look at this. We went from 443 all the way. Up to 447, the qs went from 3 sub 352, all the way up to 356..

What a movement volatility vixx vxx uv xy. They all dropped and man - oh man, i i didn't know which way this was gon na break, obviously broke in a bullish manner, and that's because i wouldn't say that the fed was dovish, but they were definitely a lack of hawkish, so we're gon na be getting Into what in the world is going on, so it came out at 2 p.m. So we had this meeting on january 25th, 26th and from there. There is always these like extra updates afterwards of like the particular notes from the meeting.

Well, that just came out exactly at 2 p.m, and that's when you saw the market really start to go haywire minute show fed ready to raise rates, shrink balance sheet soon at first. That mic is that might be like wait, that the talk is raising rates and taking care of the balance sheet. That's hawkish like how are we reacting in this manner? Federal reserve officials outlined plans for interest rate hikes and reduction in the asset holdings on their balance sheet at their last meeting minutes released today, wednesday february 16th, 2 pm eastern from january session show concern about inflation and financial stability through members urge and measure approach to Tightening the monetary policy fomc members noted that inflation was beginning to spread beyond pandemic affected sectors and into a broader economy. If you're reading this, i fully understand that you might be looking at and be like.

That sounds pretty hawkish. It sounds like the fed's gon na. Go completely bollard and just like hey we're gon na raise interest rates, let's just freaking, rug, pull the whole system and finally fight inflation and that's fair, but, as you can see in reality, the reaction was quite a bit different and i kind of dove into why So, once again, when you post it, you can come to the federalreserve.comweb.gov and you're going to get this, and you can check out the minute yourself, but i wanted to get into one part of it. This is near the end right above the committee policy.

Action thing: if you just want to read it for yourself, some participants commented on the risk that financial conditions might tighten unduly in response to a rapid removal of policy accommodation. No duh a few participants remarked that this risk could be mitigated through clear and effective communication of the committee's assessments of the economic outlook, the risks around the outlook and the appropriate path for monetary policy. This is exactly why, after people started digesting what was going on, the market started, ripping higher and higher. What this is saying is, in a certain sense, anticlimactic.

There were no surprises in the fed minutes whatsoever. The most recent fed minutes january 5th. That's actually what sounded like started this overall downturn. If we take a quick look at that look at the daily uh right here, let me drop the keltner channel just so it's less messy! So before this, the last one around december 15th, that was the fed meeting.

We got the minutes on january 5th, so kind of now, 25th 26th we're getting the meaning minutes now, anyway, as you can see, we got the minutes there and it started this entire sell-off. The reason why we had this sell-off was because, in those notes, they actually talked about balance sheet normalization, basically balance sheet runoff. They have 8.9 trillion on their balance sheet, as in they were printing printing control copy paste paper space to the tune of 8.9 trillion dollars. They created out of the ether put into the system and they were helping with the overall economy and a side effect of that was pushing the market higher and higher and higher.

Well, you can't do that forever because it prompts absurd inflation. Don't forget the price producer price index just came in double the estimates from point five up to point one: the consumer price index. They were off by fifty percent point four to point: six: inflation is at a four decade high and in the uk it's at a three decade high. This is the type of thing that cannot continue forever.

It's actually ridiculous that it even got to this point, but they were doing what they could for price stability and to battle unemployment anyway, the economy is now bouncing back. Things are looking good inflation sky high, so that's opening the door for the fed to be pretty hawkish. Well when they talked about that one of the tools at their disposal is the balance sheet. Runoff, that's very hawkish.

The other ones are tapering that will be ending march 11th and the other thing is interest rate hikes, which we know we're going to be getting the first one in march. So the most hawkish of all of these, the balance sheet, runoff aka balance sheet normalization. That was first discussed as kind of a surprise, as you can tell on january 5th, and that's exactly what led to this sell-off well fast forward till today and we're looking at i'm like okay, what's going on, are they going to talk about it? Well, the fact that you're seeing this bullish reaction - it's not because they were dovish, it's not because they were hawkish. Well, it's more so because it was a lack of that there was no surprises.

It was super anticlimactic. The right here. The biggest wrap up is just like hey, we understand it has implications on the market. So if we're planning on doing anything crazy whatsoever, we're gon na be letting you know we're gon na call it out we're gon na communicate, clear and effective that that that's their goal.

So this kind of calmed people down because there was no surprises whatsoever in the port. It was very much in line and it was basically them just reiterating what we already heard on january 26th. So the fact that we have a lack of a surprise when we're we're kind of preparing for it. That's exactly why you're seeing the markets rip right now, that's the most concise way.

I can really explain. What's going on, we have one fed member bullard who is saying we got to raise it. We got to be more hawkish. We got to fight it that if that came to fruition, you'd be seeing the opposite direction.

If we had some surprise hawkish developments in in reality, they're actually going a little bit more of a different fred member uh. Her name is daley from san francisco of like hey, we'll do what we need to, but before we do anything we're gon na. Let you know we're gon na ease it in it sounds like they're, taking a little bit more of that tactic. So the fact is, there was no surprises.

There was no surprise hawkish developments. It was in line with everything we already heard on january 26th and the fact that you're now taking this unknown out of the equation, you're seeing the markets react in a pretty positive way. So, at least in the short term, the only unknown that we're really seeing from a macroeconomic standpoint is the whole development between russia, ukraine and that geopolitical situation, but in the short term you're. Seeing that the markets are reacting in a very positive bullish manner.

Because of the lack of any hawkish surprise developments.