Fed, Mark Cabana And Bank Of America discussed on Rick Hamada


Or wherever you get your podcasts for sure. There is It's just a transitionary time. Another is a short term with the and you know that's a very broad statement. What is short term could to some people. It's moments in the market. To some, it could be a year for the Fed could be short term, but it should short term we realistically should be a couple months, maybe three in the terms of when we should be adjusting interest rates. So why what the Fed talk about interest rates is they wanted to keep it the same, and a quote from Powell said court inflation could end up higher. And more persistent than expected. That's what he said in the meeting, Bank of America, Mark Cabana said. This is this. Here's the strategist for Bank of America for short term rates. So this is his wheelhouse. He said that this is a finally a noticeable change in stance from the Fed, even though they didn't Change the rates. There appears to be a change. I'm a material shift. He called it in fact, drone Powell when he was talking about the other side of the fence, which is you know how much debt they're going to buy. Um Previously said that we're not. We're not even having that meeting or talking about having that meeting. This time. He says. Well, we're talking about having talking about a meeting. So he changed the stance on that, but nothing was changed. And the significance of this is we're behind the curve of inflation. If it's 5% And inflation is 2%. That's where he wants to target were well above the status quo. So there is a net effect. I mean, I've always maintained and perhaps I'm not completely accurate, but when we take a look at the Dow And other markets. It's a very emotional number, the lot of reactions to news development statistics data etcetera Friday. The markets just Tank. So what caused that to happen? David? So not all people at the Fed believe what Trump out is saying, And right now there's three members of the fed their nonvoting members that believe rates should be higher and or they believe that the Fed should start tapering which papering is the term that says the Fed. Should not continue this buying of the debt. They should be selling the debt and one of the Fed chairman's of ST Louis Fed chairman Jim Bullard from was on CNBC, and he gave more insight. He's being interviewed and During his interview, the traders didn't like what was being explain because, he said, the Fed has tilted a bit more hawkish, which means hawkish, use the term that they're going need to be thinking about raising rates this synonymous for that. And he anticipated that they should be rating raising rates. And he said, there's more now upside risk for inflation on the inflation forecast, So he kind of laid out you know some of the backlog meetings. In essence that's saying, Hey, none of all this believe the same. And it caused the market got spooked. Going down 1.5% the Dow, You know we had another rollercoaster. It's the short term memory loss happened on Monday. The market went back up, but there's been this huge volatility. It has not recovered, though from last week because last week We had the biggest downturn in the market since October of 2020, so it's still not recovered from that, but it's headed that direction really slow, though. Although David Fisher as I say, good man, good friend and he of landmark goal dot com landmark goal dot com the destination It should be for you. If you want to learn more and also in regard to investing to become aware, educated and supported in making proper decisions that's in your best interest. The telephone number is 844604257584464 to 575. You mind if I ask some basic fundamental questions during our time to help those who are dialed in, please? Yes, so I want to. I want to comment on the market correlation between the CPI number which came out of 5% and the Fed lending rate, which is at a quarter of a percent. That's what it is right now. But they should be normally closer together. For instance, in 2019 in April of that year, the Fed lending rate was 2% in the inflation rate. The CPI number was 2%. 1975 When we had inflation, CPI number was 12% and that that lending rate was 13% before the collapse of 2000 and eight the Fed lending rate was 5% and the CPI number was 5.6% after the collapse. Rates went down to a quarter of point and the CPI went down 2.1%. So there's been a very close relationship. We don't have anything that's close right now. If it's 5% is the inflation, the CPI number and we're at a quarter of a point. This is why I believe, and many economists say this that the Fed has lost its way They should be raising rates because the gap is way off, which tells us The Fed. Doesn't want to raise rates because the market in the economy they believe they're confirming by the action will tank the market and tank the economy, So this is why they're staying in this course, Unfortunately, but it's like the slingshot. The longer you do this once you let go. It makes a big change and it were violent at that point, and there's never been a time in history zero times in history. When the Fed has raised rates where there was not negative circumstances has been a direct correlation, so we're going to have a correction coming up. That will be severe once the Fed does enact Final thoughts for us today, please. Well, if this is if you believe Rick and the listeners that hear my voice that this the Fed is disengaged from this correlation that should be really tight. And if you believe that the President administration and also previous ones. They've overspend. Now we're at $6 Trillion and this printing of money out of thin air that there is going to be ramifications for that, and we're going to have some sort of inflation. Golden Silver was the number one investment class. Silver went up from dollar 52 $50 gold average 37% for nine years, and the Dow only went up 2%. So that tells us historically real estate stocks are not the best investments to have during those

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