Summary of This is What Comes Next From The Fed! Impact on Markets?!

00:00:00 - 00:15:00

The Federal Reserve is widely expected to raise interest rates again soon, but Jerome Powell warns that this could have negative consequences for the economy. Powell also says that the Fed is committed to bringing inflation down to 2% and that it will take a long time for rents to come down again. The video discusses the consensus amongst experts that the Federal Reserve will pivot once something in the financial system starts to break historically.

• 00:00:00 The Federal Reserve held its first press conference since July and chairman Jerome Powell pulled no punches during his speech. What Jerome said sent shock waves through the market and it has left many wondering just how far the Fed will go to break the back of inflation. Today I'm going to summarize what Jerome said explain what it means in simple terms and examine whether the Fed could soon be forced to pivot. Jerome started by discussing the recent inflation figures and how they don't meet the Fed's target. He went on to say that the Fed will continue raising interest rates and selling assets off its balance sheet until inflation is brought back down to the central bank's two percent target. However, he didn't specify what kind of compelling evidence he's looking for. Jaypo concluded by repeating that the Fed must bring demand down so that it is back in line with supply and that this will inevitably result in a sustained period of below trend growth. Again, the Fed does not care because inflation is what it's focused on.
• 00:05:00 The video discusses the recent market volatility, which is largely due to the Federal Reserve's decision to raise interest rates. Jerome pointed out that the Fed wants to see growth continue and that when this doesn't happen, the Fed will raise interest rates until inflation comes down. Jerome also mentioned that the Fed is at the lower bound of how high interest rates will need to go in order to achieve its inflation target.
• 00:10:00 The Federal Reserve is widely expected to raise rates again soon, but Jerome Powell warns that this could have negative consequences for the economy. Powell also says that the Fed is committed to bringing inflation down to 2% and that it will take a long time for rents to come down again.
• 00:15:00 The video discusses the consensus amongst experts that the Federal Reserve will pivot once something in the financial system starts to break historically. While the FED may care more about bringing down inflation than stock prices and the actual economy, the answer to when the FED will finally pivot depends on the answer to another question - what does the FED care about more than inflation, as far as is can tell? The first set of cracks in the Global Financial system are the collapsing values of other currencies against the US dollar, caused by discrepancies in central bank monetary policies and energy shortages. Some central banks, such as the bank of Japan, have been slow in raising interest rates, which is causing capital to exit these countries and currencies into the US and the US dollar. This is simply because investors can earn higher yields on U.S government debt at the same time. Some countries, such as Germany, are facing acute energy shortages, which is forcing them to sell their national currencies for US dollars. So they can buy energy, something that's necessary given the US dollar's status as a reserve currency. This selling weakens these currencies, the resulting weakness in these currencies causes the interest rates on the government debt of these countries to spike, and this is why investors start to see these countries