Riled Up About Last Week's Fed Meeting: They Have No Confidence, Risk For Markets

Video Length: 00:15:32

We got all riled up about last week’s Fed meeting. I thought the meeting was amazing.

There are two things that stood out for me. First, the Fed thinks they’ll hit their targets in 2023 but their dot plot doesn’t show them raising rates; that seems to be a sign of no conviction in their outlook. The other thing that stood out is their bullish GDP projections are only because of government stimulus, which underlines the fragility of the economy.

On the flip side, the Fed and chair Jerome Powell are sticking to the ‘transitory inflation’ theme, but inflation is like a fire, you have to put it out. So can it really be transitory? We don’t think the Fed knows any more than anybody else knows if it will be in fact transitory.

This sets up well for bitcoin (BTC-USD) and poorly for just about everything else. The market (NYSEARCA: SPY) is in between our key levels, so the technicals aren’t too bad, but we’re still waiting to see if there’s a big drop that will signal a market change. And even though the fundamentals for tech companies are great, issues on the margin - like a rise in defaults in China - could risk direction of that sector as well.

The video discusses all of these points in more detail.

00:30 - Reaction to the FOMC meeting last week

  • Fed lacking confidence in their projections

  • Market levels still undetermined, but fundamentals don’t bode well

3:20 - The inflation story -

  • How can inflation really be transitory

  • PCE numbers coming out

  • Bond market’s concerns (chart at 5:45)

  • Covid still lingering

7:30 - The market impact for tech, bitcoin, etc.

  • The risks of an eventual rate rise coming sooner than the market expects

  • The ongoing chickenbear stance

  • The solid fundamentals for Tech remain, but watch the incremental data

12:30 - What to watch for the week ahead

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Disclaimer: All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you ...

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