Fed Meeting Preview: Hawkish or Dovish? — Full Breakdown & Transcript

[00:03] at all. Take a look at this. You're not going to like this, but we'll show it to Nobody's going to leave you hanging today. This is not good. Some might say this IS SLEEPY JOE BAD. WE HAVEN'T SEEN NUMBERS quite like this since I like to

[00:19] NUMBERS quite like this since I like to call him sleepy Joe. Well, boys and girls, um I don't like the direction of true inflation. Uh, honestly, I mean, we we know oil prices have hit $117 per barrel. They've

[00:33] fortunately come down a little bit here, but uh I have to say this true flation CPI read sucks. Uh, you know, obviously they lock up all these others uh behind fine. The true flation one is the one

[00:46] that historically people have shown all the time when they show screenshots on or whatever. Everybody's talking about how true's going down, right? I mean, it everybody's like, "Look, it's going straight down." And then we were even

[01:01] seeing these posts about how true inflation was in like the 1% or even under 1% range. Those were all real numbers per true flation. They were here. But dude, what the f like look at where we are now, man. These posts

[01:14] aren't getting that many likes anymore by true flation. I hate to say it, people ain't very happy about that. And there's only one man, one opportunity. Look, there's only one person who could deal with this. Well,

[01:29] and Iran, which we're not going to keep talking about that, we'll see. We still have a little bit of time, right? Anyway, it's Kevin Walsh. It like it's basically Kevin Walsh is the backs stop for Donnie T. And this is

[01:44] not good. So, we're going to go through a plan in this for what I think is going on tomorrow. But before I start with me, because you kind of hear from me all the freaking time, I appreciate you coming to listen, but let's also give you some

[01:56] other perspective. So, a few things to note. Uh, MUFG indicated that there are quote amber lights for Kevin Worsh. I immediately saw pictures of Amber Heard in my head, but okay. Housing starts are down 5.2%. Pending home sales down 7.3%.

[02:13] applications. the longest run of mortgage application drops since mortgage application drops since November of 2022. The NASDAQ is 6% off of its record. Okay, let's put a little reality on

[02:26] Okay, let's put a little reality on that. MU motherfers. It's actually MUFG, but I don't know why. Like I think it stands for FU. Um, none of that matters. Like first of all there's a difference between

[02:39] there's a difference between construction starting pending home sales and sales volume and sales prices. Okay, prices in desirable low build areas are still going up in spite of these ridiculous rates. Build more prices come

[02:56] down. Simple. Okay. Econ 10 probably too. They don't teach it at all and too. They don't teach it at all and nobody makes it to Econ 102. Anyway, NASDAQ being 6% off its highs, bro. That's not really off its highs. That's

[03:09] like a fluctuation. That's like a little a little bounce over the 700 number, you know? It's like it's really like our heartbeat. Like, here's 700. We're dead. know? We went into cardiac arrest with

[03:22] Leopold, went down to 655, and then it was thanks Kenny of Citadel. So, I don't I don't think that any of those Kevin Dors really cares about as

[03:34] hear Tuesday's update. Goldman economists expect to hold uh expect a else. Everybody in their mom expects a hold tomorrow for the Federal Reserve.

[03:46] Uh we are looking at a 93.4% chance per the bond market of a hold tomorrow. So tomorrow. It would be a rug pull to get a hike tomorrow. The commentary is going to be the problem. He without an Iran deal, we have the greatest chance of

[04:01] getting hawkish commentary from Kevin Worsh. That's bad. Unless Kevin Worsh got a phone call from Donnie T that it's all okay. Just give me a few more days. Is this thing looking good? Okay. Goldman economists expect a hold. Uh

[04:17] they think uh ultimately though the Fed will deliver fewer rate hikes than know about that. Not with this true inflation read. And it's it's also not the true inflation read. I mean, we talked about this yesterday already, but

[04:31] it's in addition to the true inflation read. We have the 5-year inflation break even, which is actually uh arising. It's back at the same level that we saw before the September 16th hike. So, we spiked up, came down, and spiked right

[04:46] sit. We I just looked again a few minutes ago, and we haven't gotten any better. Uh, so it's not good. It's still elevated. I think uh some people at least were expecting some kind of deal

[04:59] before the Fed meeting, but the next opportunity is before the election. My hope goes down on these sort of steps. Anyway, Morgan Stanley, economists expect the Fed to hold on Wednesday as well, but also expect a hike in December

[05:12] and then again in March. So basically, Goldman, uh, MUFG, Morgan Stanley, and UBS, all these guys and pretty much the market are all expecting hold tomorrow,

[05:24] hike in December, and then you get sort of the mixed bag of do they expect more hikes in like March or otherwise. Now, NORA research says that Kevin Worsh is actually now at the perfect time to start emphasizing the need for

[05:38] quantitative tightening, which is literally the last thing that we want to hear right now. But Kevin Wart did indicate that the Federal Reserve has a quantitative tightening task force that is expected to release their report by

[05:50] year is around the corner. Okay, you got the holidays coming up in the second half of December. And so really, you have about five, six weeks before spirit again. You know, Thanksgiving is in like four weeks and then the two

[06:04] to be gone for Christmas and then it's like New Year's. You know, it's kind of exciting because it means ski season's coming up again real soon. Uh, that kind of reminds me, you know, we should check uh what date does the Park City Mountain

[06:19] uh what date does the Park City Mountain Resort open. Oh, what? Why does it say Resort open. Oh, what? Why does it say October 30th? No, that's when the coupon expires for Reinvest One. That's That's not when Park City Mountain Resort opens

[06:33] up. Oh, no. PCMR opens up. Oh, November 20th. Look at that. right before uh uh closing date, April 9th. We better get freaking snow this season. I'm going to season. But it is true. We do have Look at Look at that. Isn't this a beautiful

[06:49] at Look at that. Isn't this a beautiful box here? Life lifetime access that goes away uh next year, unless of course you bought and then you do keep lifetime bought and then you do keep lifetime access. Uh okay, so these are what some

[07:01] of the suits are saying. talking about, I hate to say it, but talking about QT coming could end up being very hawkish along with this true flation data. All of this could lead and and then this idea that there are amber lights not to

[07:14] hike. Uh-uh, man. All of this is screaming, "Yo, Kevin Worsh, you're probably going to have to talk to us." Now, there are going to be two paths for determining, you know, what's bullish and what's bearish. So, the bearish

[07:28] commentary is going to sound a lot like anything that implies this war is not coming to an end and anything that implies Donald Trump has not gotten a phone call. Like, I hold out a little bit of hope that if we don't have a deal

[07:43] you know, see does seem unlikely right now. Say I'll call it like it is. Uh well, unless he's gotten a phone call, unfortunately, he's going to have to

[07:55] talk to us. And there's a good shot that's going to be bad for the market. Now, today was obviously very good. SK Heinix's earnings came out great. They have like 50% uh of their uh manufacturing production capacity for

[08:09] 2027 and 2028 set up with long-term agreements, which is great. That beat some of the cyclicality. They also beat some of their expectations, which was great. I mean overall the uh earnings were fantastic. I'm going to go through

[08:22] the earnings call later, but uh we had a quote expectation that the memory supply shortage is going to persist through 2030. Like that's all bullish for the for Worsh because he looks at that and says, hm, yeah, sounds like we're going

[08:37] through the end of the decade. And so I looked at some of the things in his commentary from last time. And uh well you know first of all let's let's look at just kind of where the market sits. So uh the last two days the market's

[08:51] done really well on the cues. Uh we know this fortunately the last two days before the market opened up we had really good alpha reports. I knock on nailed it today with the AMD and balloon call out and the last two days on

[09:05] bullish on the cues and buy the dip. It's done very well. So, but anyway, if we go all the way back to September 16th, join us, by the way, go to the reinvest one.com right here. September 16th. Interestingly, have you or a loved

[09:20] one child been affected by social media? Morgan Morgan can fight to help you. If you or your child spent years growing up on social media and experienced serious mental health struggles, you should hear

[09:33] this. Recently, a jury ordered Meta and YouTube to pay millions for their role in designing and promoting addictive platforms. They knew their apps could contribute to anxiety, depression, and body image issues, but did not share

[09:46] those risks while prioritizing profits. The recent historic verdict underscores the consequences of those decisions. Now, Morgan and Morgan is stepping up to hold these platforms accountable for the harm they caused. Click the link in my

[10:01] bio to take a short quiz and you may be entitled to a potential recovery of over $1,000. It's quite easy to do. Go to the link in the description, fill out the form for yourself or a loved one. It's quick,

[10:14] easy, and you could recover a potential recovery of over $1,000.

[10:26] was right here and the NASDAQ the day before the meeting closed at 703. So, we're actually going into this a little we're actually going into this a little high. We did drop after the hike because

[10:38] Kevin Worsh has a tendency of coming across as hawkish because he has to come wouldn't be surprised to see this sort of repeat, but look what happened. Right after the worst catalyst was over, we literally went to all-time freaking

[10:54] highs. Like the worst catalyst had to pass and you had to get the volatility at the end of the day to literally pick up 60 points on the NASDAQ. Okay, so

[11:06] like there is a good shot that we are going to get punched in the damn face tomorrow. We are going to get shown the bat. And more than just the bat, we're gonna get riamemed by words. We're gonna get hawkked too tomorrow.

[11:21] But he kind of has to. Like in fairness, you should go in tomorrow and feel you should go in tomorrow and feel blessed if we don't get hawkked too. If they come out and they give us some Dinoco oil and they just grease our

[11:34] wheels, that'd be great. So what are some of the things that we would expect to hear from? So I call it no deal, no hope.

[11:49] so you can watch me sip coffee. No, it's actually because I can make more content if I just don't edit it. I So, I apologize. It kind of works both ways that way. We're like a team. Anyway, last time he said underlying trends have

[12:02] not improved and he's hardressed to see that they've improved. That was bad. If he says anything like that again, that's hawkish. Market go down by end of day. Okay, last CPI that we got between the last meeting and now was also bad. 6 on

[12:18] the headline, that was a match, but it was bad. And then we got a, you know, worse than expected.3 versus 2 on core CPI. Not good. 50% of categories rising over 3% annually. We literally did the spreadsheet math on it. It was down from

[12:33] 54%, but it's still 50%. If he brings that up, it's bearish. Trends not passing the test. Bearish. Wixilian rate aka R star not being

[12:46] because it basically means hey we just comes down and it's not the particular data point that matters it's trends that matter all those words are bearish especially when you look at true

[12:59] especially when you look at true inflation okay US economy strengthened underlying growth higher I mean that's bullish GDP bearish on rates man rate sensitives are It's going to suck another one. It's going to like the only

[13:15] reason there's only one reason to hold anything rate sensitive if we don't get an Iran deal. And it is because for some reason you think the layoff recession is faster than you could go buy those rate sensitives.

[13:29] probably be a teeny tiny if not non-existent portion of your portfolio actually good value opportunities in hardware. But, you know, we'll see. Now,

[13:41] bullish things. This is this is my expectation that something like this expectation that something like this could happen.

[13:54] I know you got to convince them all that you're fighting inflation. You're going to bring it down. Nobody does it better than you. You bring it down. You bring the party down. I'm losing the voice. Um,

[14:11] ends up saying, "We're going to do a deal. Just take it easy tomorrow." Like, we are half signed on the paperwork. Just buy time, baby. Basically. Okay.

[14:27] some hints. Now, maybe we won't get a call, but I kind of think they're buddy buddy, and I kind of think they're on the phone, and I think Donald Trump is a the point where he's going to know. Kevin Worsh is going to have to put the

[14:41] act on, especially if there's no deal coming. If a deal is coming, Kevin Worsh is going to hint it to us if he knows about it, which I suspect he will. And here are the key words for that. We've really got to focus on AI

[14:56] disinflation. We expect oil prices to come down soon. They're not sustainable at these high levels. We have a stable labor market, but we need to pay attention to the strength of

[15:11] the labor market fading because that could change fast via layoffs. We have departure offers from companies. Microsoft 60,000 or consistent with full employment now, but that could change. And so we have to wait for our prior

[15:26] rate hike to take effect and wait for task force data and the 10 two has flattened. All of those things are in the bullish camp. Okay. If he reads that

[15:38] the bullish camp. Okay. If he reads that out, oh boy, that's going to be juicy. I will be optimistic about that. And just like last time where we went skyhigh after the Worsh meeting, we could go skyh high, especially if he reads some

[15:53] of that stuff out. So then imagine you get past the Fed meeting and you get an Iran deal. Oh my gosh, tickle me big. Okay, now we do have another problem. It has to do with the trends again. So first of all,

[16:08] there's a comparison to the 1970s. Uh and then we have this right here, which is the long run inflation expectations. So one thing that you can notice here is that in 2019 the trend of inflation expectations was in this lower region

[16:21] over here. Okay, this is the Federal Reserve published some of these charts. Uh and then I kind of simplified them a little bit. Uh that trend of inflation is now way higher like the the trend box of inflation is meaningfully higher. We

[16:35] are above this 2024 range right here. Right? That's not good. This means washy worsh has to kick us in the butt. This right here going back to the little

[16:47] green line going up where in the 1970s we had a trend of higher inflation basically higher lows you know like a technical analyst in stocks higher lows baby higher lows. Well that's what we're getting in the stock market right now

[17:01] based on inflation and it's not good. It's not good at all. Uh, it's so the terminal that you could get lifetime access to is coming out at the end of

[17:13] this year. Like it is going to be the greatest present. Whether it's a present comes, it's going to be this year. You get everything in one thing at reinvest one.com. the alpha membership, the trade alerts, reinvest stocks,

[17:28] reinvest homes, reinvest research, all nine courses, the course member live nine courses, the course member live streams, the agentic AI blueprints, guaranteed. If you join sooner rather than later, and you lock in that

[17:41] lifetime access because that lifetime access is going away for anybody in 2027. It's sort of like full self-driving for the Tesla. everybody was able to buy it for a period of time and then when it away when it went like

[17:54] paying for it on sort of a monthly or annual basis. That's where we're heading. So come join us over at reinvest one.com. And boys and girls, good luck tomorrow, but that coupon code expires Friday. If you like that video,

[18:07] to love it. >> Why not advertise these things that you knows about this. >> We'll we'll try a little advertising and >> Congratulations, man. You have done so much. People love you. People look up to

[18:19] >> Kevin Pra there, financial analyst and YouTuber. Meet Kevin. Always great to YouTuber. Meet Kevin. Always great to get your take.