Fed Officials Confused By Market Reaction To Interest Rate Expectations

A rainbow. It’s so beautiful. Sorry. Love that video on YouTube. All right, come on in with me. Let’s go in the truck. This is awkward. Sorry about that. Stand by. It’s going to get awkward. Oh, sorry. Don’t like being put in tight places. Oh, gosh. Come on, ninja. Get it together. All right, this is what happens when you go live and it starts raining. Let’s get this shade.

All right, there we go. All right. Well, that’s awkward. Jeso, I don’t even know what to say. I’m totally unprofessional. There we go. There. All right. It’s awkward. Heck of an intro. He’s out of CNBC. Feds. Goolsby, how’d you like that name? Goolsby says he was confused by last week’s market reaction. I know this has been a super awkward reaction to it sprinkling outside. Sorry about that. Didn’t want to get the camera wet.

We’ve talked about this before. When the Fed came out last week and said that they had penciled in three rate cuts, I said, hey, a month ago, I did a video on this. I’m like, expect this to come. They’re going to try and deceive you. They’re going to try and prolong this crash as long as they can. And it’s so big they’re not going to be able to.

But this is going to be expected. And even one of their uppity ups are like, why is the market reacting this way? Stocks are blowing up. I’m going to show you a chart that’s just mind boggling what’s happening. And everyone’s expecting the Fed to just drop rates. And I said, they’ve never dropped rates ever in history without things being really bad. But you have to understand that this one is going to be politically driven.

And I believe that they are going to lower rates at one point this year. And this is how you’re going to know what comes next because of what’s surrounding that rate cut. I keep most of that information for my students in the real estate crash course, but this is something that we need to realize. This is a great story to go over. It’s out of CNBC. It’s entitled Feds.

Goulsby says he was confused by last week’s market reaction. Said a Federal Reserve official said Monday that the market may have misunderstood the central bank’s intended message last week after stocks and bonds rallied sharply. And it’s happening even more. The stock market’s up today. The bonds are doing great. Everything’s awesome, right? Well, gold’s also up today, and there’s a reason for that, says the Fed voted last week to hold rates steady once again, and its updated projection showed an expectation of three rate cuts in 2024.

That caused a rally in stocks and bonds, with the Dow Jones industrial average jumping to a record high. He says it’s not what you say or what the chair says, it’s what did they hear and what did they want to hear? Said Chicago Fed President Austin Goulsby. He said on CNBC’s squawk box, I was confused a bit. Was the market just inputting? Here’s what we want them to be saying.

I’m going to stop there and say the answer is yes. The Fed has been saying one thing all year and mainstream media has been saying the complete opposite. It’s been so blatant that Bloomberg came out a couple weeks prior after the Fed chairman Jerome Powell was speaking at a summit and they said, this is a quote from Bloomberg. He might as well have came right out and said that they’re going to lower rates.

That is the complete opposite of what Jerome Powell had said. He said to expect higher rates for longer. And he also said that they are data dependent. Obviously, these are obvious. That’s an obvious sign statement. I mean, but the markets want that monetary heroin. All right, now here’s a chart of the Dow Jones since that has happened, since that announcement came out, that they’d penciled in some rate cuts.

I want you to realize too, thinking just normally and rationally, the Fed has no reason to ever cut rates unless things are bad and they have to stimulate the economy. So one side of the case, which nobody in the mainstream media is talking about, or investors are not talking about, that if the Fed penciled in rate cuts towards the end of the year, they could be seeing some really bad things happening in the market because they have the information way before you actually, it sounds know we all get to see, like when I was telling you the market’s doing bad and everyone in the spring was saying how, no, you’re wrong, ninja.

Not everyone actually. But they said Warren Buffett is buying up stocks like crazy. And then we found out three months later he’d been selling. Then three months later he’d been selling. We always find out in the rears because that’s when the data gets put out by law. All right. Jerome Powell has direct phone number with the biggest ceos in the country. Hey, how’s it looking? They’re like, it’s not looking good.

Okay, copy. And he has the best consensus that anyone has. So the Dow Jones has been on a terror, and that’s exactly what people look at. It went from like, 3005, 300 to 3500. Just an absolute terror. Right? And this is actually getting. A lot of investors woke up right now and they’re going, what? We’re making money, okay? And they’re pulling money out of their bank accounts. They’re putting into stocks.

That’s why one of the big headlines today, and it’s no joke on CNBC, is sell cash, buy stocks. There’s a mania going on right now, and all these people are going to get caught and they’re going to lose their butts. All right. When that happens, I don’t know when. The Fed says. The Fed president also pushed back against the idea that the Fed is actively planning on a series of rate cuts.

He says, and this is a direct quote, we don’t debate specific policies speculatively about the future. We vote on that meeting. He said trading in the opinion market implies that traders are seeing three and three quarter percent to 4% as the most likely range for the Fed’s benchmark rate at the end of 2024, according to CME Fed watch tool, that would be six quarter point cuts below the Fed funds rate, or double what was forecast.

In the central bank’s summary of economic projections, Goulsby did not explicitly say that the market pricing was wrong, but did highlight this difference. He said the market expectation of the number of rate cuts is greater than what the SCP projection is. Goulsby is not the only Fed official who has downplayed the meeting in the wake of the market rally. So here the Fed governors are coming out and saying, essentially, you guys have got it wrong.

The markets have got it wrong. Like, you don’t understand where we’re at, but the market keeps going. This is what happened right up to the beginning of the crash of 1929. Everyone’s partying, everyone’s drinking champagne, everyone’s dancing, until they weren’t. Just like when Alan Greenspan came out talking about rational exuberance. And when we saw all this craziness in the. com bubble and in the housing bubble until it was overnight.

And the stock market. It’s interesting how the stock market turns down, because the Wall street cycles chart, you’ve all seen it colored chart on where it’s depression, despair, then it gets exciting and everything. It’s exuberance, and then it starts to fall and there’s that dead cat bounce, where it’s denial, like there’s nothing really happening. And it comes up a little bit and everyone’s excited. That’s where we’re at right now.

And then it comes down and it goes back into that cycle. That’s exactly where we are. You can’t make this up. Markets are all driven by one thing and one thing only. It’s not profits, not blah, blah, blah. You could have totally profitable, awesome companies that, if they’re not noticed, they don’t have the right advertising. They don’t get themselves out there in front of the sheer amount of investors.

They just don’t go anywhere. They make money, but the stocks aren’t going anywhere. The whole system is built off of one thing and one thing only, whether it be stocks or real estate. It’s emotion. That’s it. Motion, exuberance, exhilaration to the upside, and then fear, scared, just plummeting. On the downside, it’s all human emotion. Once you can figure out the human emotion, you can see the trends. And right now, what’s the emotion? Everybody’s buying.

But here’s the thing. Not everybody’s buying. Jamie Dimon’s selling. Jeff Bezos is selling. Warren Buffett is selling. So the question is, what side are you on now? I think, again, in closing on this one, when you see a chart like this, because the Fed’s saying we’ve penciled in some rate cuts, they didn’t say they’re cutting rates. They said we’ve penciled some in. And it’s not all of them agreeing on those rate cuts.

What do you think? Where do you think we are right now? I’m getting ready for an epic market crash that is going to take real estate right down with it. And real estate is already turning down. If you guys want some of those links, I’ll put the 80% off links down below. But I think it’s a big time. It’s a good time to be alive. It’s a good time to be very hyper aware of what’s going on in this market.

There are layoffs happening not because things are good, it’s because things are bad. The freight industry is collapsing. If you’re not ready for this ahead of time, I don’t know what to tell you. But the day to day ups and downs of the stock market do not affect me at all. Hope you got something out of this. The economic ninja is out. Bye. .