He Said the C-Word

He didn’t mince words; if you heard Jerome Powell’s FOMC meeting statement and the subsequent Q&A session, you were left with no doubts as to what the world’s most important central bank is thinking.

If you haven’t watched it and even if you have and aren’t nuanced in the coded jargon of the Federal Reserve, I’ll recap the entirety of the press conference and why it moved markets so decisively.

The Fed ignited the largest stock-buying program since Nov 2022:

Courtesy: Zerohedge.com, Bloomberg

Going into the meeting, I didn’t anticipate that Powell would disregard the loosening of financial conditions, and not even mention that the stock market is trading at record highs or that gold is also at record highs – but these topics weren’t mentioned, neither was the deficit, the wars or anything negative!

The only “warning” was that the jobs market was cooling, but even that was painted with a brush of “cooling back to normal.”

In other words, Powell orchestrated the most bullish FED meeting in memory.

And, when the world’s most influential central banker is praising the economy, it’s normally time to sell dollars:

Courtesy: Zerohedge.com

I want to go ahead and talk about the obvious:

1. The Federal Reserve has finished raising rates.
2. The Federal Reserve will begin cutting, as soon as March.

These two alone will help bring life back to the housing sector.

3. The Federal Reserve is likely to cut by 1%-1.5% in 2024.

In other words, by election time, interest rates will be normal, judging by historical standards; the 10-yr bond will probably trade around a 3% yield.

What this indicates is that the world of the tech and growth cycle is over; rates will not go to zero in our lifetimes, most likely.

4. The U.S. economy is back!

Yes, this will shock many, who have seen Presidents Clinton, Bush and Obama {the worst U.S. president ever}, sell this country’s competitive advantages to any smiling leader, who promises not to abuse the commercial secrets and IP he has been given, but Trump and now Biden (who, by the way, is basically continuing everything that Trump put in motion) are making American industry superior again.

I know you want to shoot arrows of scorn and hatred back at me. How dare you say Biden, whose son is corrupt, whose mouth cannot string together a coherent sentence, who is doing this and that, is helping the country! On the other side, the Trump haters will say that I’m admiring the man who divided this country more than anybody else, but hold your horses…

Both are far from perfect and both divide the country, but they were both surrounded by capable people who helped restore America’s footing, and better yet, both see how China is collapsing in front of them.

So, after saying that the United States is looking better by the second and risking a bombardment of feedback that I must be a lunatic who gets his news from space, I ask you to remember that we called the following:

• Bitcoin going from $400/coin to now over $40,000
• Gold heading toward an all-time high.
• NASDAQ 100, S&P 500 and Dow Jones hitting fresh all-time highs.
• Money-market accounts a low-return bubble.

I care about results, not about making anyone feel good about his personal beliefs. Unlike the mailman, I deliver even on SUNDAYS.

Best Regards,

Lior Gantz
President, WealthResearchGroup.com