The Fed Just Released a Statement On The Economy : Here is what it Said Looking to Apply to Join my Private Stock Discord Chat & Private Stock Market Group? Link here
Hey there folks a very simple video i want to take you through and kind of give you my opinion on what the fed just said here in their statement minutes ago and yeah i want to give you my opinion on what this means for the markets for if they’re going to continue to raise rates uh kind of reading between the lines and things like this the fed many times can kind of
Hint to certain things they’re going to do down the road in these uh statements okay so first off starting out here recent indicators of spending in production have softened you know that right off the bat that sets things up into a situation where they could definitely if inflation starts to come down in terms of the rate of growth they can definitely go softer
On future raises right off the bat if you’re talking about spending production have softened you’re setting yourself up to potentially maybe only raise 50 basis points or 25 basis points next time when you start out a statement like that okay nonetheless job gains have been robust in recent months and the unemployment rate has remained low inflation remains
Elevated reflecting supply and demand imbalances related to the pandemic so that’s an important statement here okay there’s still basically saying that inflation remains elevated but it’s because it’s reflecting supply and demand imbalances okay that’s very important higher food and energy prices and a broader price pressures russia’s war against ukraine is
Causing tremendous human and economic hardship the war and related events are creating additional upward pressure on inflation in weighing on global economic activity definitely in europe even more so the committee is highly attentive to inflation risk okay that’s good definitely good the committee seeks to achieve maximum employment and inflation at a rate of
Two percent over the longer run and obviously we’re not even close to two percent right now the le the latest numbers we were at like nine percent uh a little over nine percent for inflation just for anybody that’s not caught up so yeah we’re a long way from two percent two percent i mean it’s probably going to take us to 2023 to get down to two percent we could
See the the rate of increase continue to drop throughout this year but to go from nine to two it’s going to take a bit of time to get down there okay in support of these goals the committee decided to raise the target range for the federal funds rate to two in one fourth to two and a half percent so basically they’re raising 75 basis points okay 0.75 percent
And anticipates that ongoing increases in the target range will be appropriate in addition the committee will continue reducing its holdings of treasury securities and agency debt and agency mortgage-backed securities okay as described in the plans for reducing the size of the federal of reserves balance sheet that were issued in may the committee is strongly
Committed to returning inflation to its two percent objective keep in mind it’s going to take some time to to get it down to two percent but the the thing is you might think okay they’re trying to get down two percent they’re just going to keep raising like crazy not really now when you’re talking about right off the bat in your first sentence indicators are spent
Spending in production have softened what if they soften even more over the next three months right and when you also are saying you know inflation remains elevated but you’re saying it’s reflecting supply and demand imbalances you know you’re basically in the belief that you know once supply and demand get in balance right and you’re you’re in a situation where
You don’t have to continue to raise rates in assessing the appropriate stance of monetary policy the committee will continue to monitor the implications of incoming information for the economic outlook the committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee’s goals
Okay so that’s basically just putting everything on the table raising rates lowering rates all those things we’ll just put it all on the table the committee’s assessments will take into account a wide range of information including readings on public health labor market conditions inflation pressures and inflation expectations and why did you keep using and dan
Dan i don’t understand this and financial and international developments i mean i swear i learned in school a long time ago you can’t just keep putting and in a sentence again and again and international developments so this basically is effect trying to cover their basis as far as just leaving the door open of like potentially continue to raise rates which is
What people expect or potentially lowering rates as well there okay so as far as stocks go obviously you know big tech’s beasting day a lot of stocks are bee sting i’ll do a whole dedicated video later today all on the markets what’s going on in the markets earnings we got a bunch of earnings coming after the bell we had a bunch of earnings this morning i’ll do
An in-depth video uh probably in four or five hours on all that in depth i just want to cover this for you guys as far as what’s going on with the fed there uh yeah you know they’re they’re setting themselves up in my opinion this is my personal opinion they’re setting themselves up to potentially only raise 50 basis points or 25 basis points next time they raise
Rates in a few months and if i had to guess i think the rate of increase of inflation will start coming down over the next let’s call it two or three months to maybe eight seven percent maybe even six percent talking three months from now and that will be a situation where the fed will be able to say okay you know we can back off of these 75 basis point increases
And we can go a little tamer now if the economy deteriorates over that time that gives the fed even more ammo to make a move like that right if the economy is still super strong and the stock market comes back strong and inflation remains eight percent plus then the fed is going to still do another 75 basis points next time they raise okay so do keep that in mind
All right guys much love as always uh check back with me later and peace
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The Fed Just Released a Statement On The Economy : Here is what it Said By Financial Education
