How the Fed’s “Big Mistake” Will Impact You

by Andrew Zatlin October 04, 2022 1:00 pm ET

The Fed’s being fooled!

It’s still under the impression it can curb inflation without tanking the economy.

But it’s ignoring a critical piece of data…

And its mistake could have dire consequences for you.

For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.

How the Fed’s “Big Mistake” Will Impact You

To assess the strength of the U.S. economy, the Fed looks at data including:

Consumer spending.
Labor data.
Jobless claims.

Typically, it pays particular attention to jobless claims. That’s because jobless claims provide real-time data, with no lag.

Furthermore, jobless claims are straightforward: they tell you, point-blank, how many new people are out of work. So they’re a good proxy for the strength of the U.S. economy.

But as it turns out, this data is misleading — and the Fed is getting it all wrong…

Jobless Claims are a Ticking Time-Bomb

As you can see in the chart below, jobless claims have been dropping recently:

The Fed looks at this and thinks the labor market is strong. After all, fewer people are losing their jobs, right? So we must have a strong economy. Great.

But the labor market isn’t strong. It’s a ticking time-bomb!

Let me explain…

Layoffs Aren’t Happening… Yet

You see, jobless claims primarily track workers in sectors like restaurants and retail.

And right now, companies in these sectors aren’t firing anyone. After all, they struggled like crazy to hire these employees in the first place! Furthermore, issuing layoffs just before or during the holiday season is a bad look. It makes for terrible PR.

But when the new year rolls around, the situation will change. Companies won’t need so many workers, and they’ll worry less about keeping everything cheery… and more about their bottom line.

And that’s when we’ll see horrible layoffs.

So, what happens then?

I’ll Show You How To Play It

Mass layoffs will reveal that the Fed’s attempt at a “soft landing” isn’t working.

This will send the market in one of two directions:

In the first scenario, the market will jump. After all, the Fed may need to lower interest rates if it’s facing a weakening economy — and the market loves low interest rates.

But in the second scenario, the market will crash even further. After all, widespread layoffs indicate weaker company earnings, and thus, weaker stock prices. So investors will start dumping stocks.

The thing is, for investors like you, either path could lead to big investment profits. You just need to know how to play it.

And that’s what I’m here for: I’m here to show you how to play it.

So if you’re interested in making money from the coming turmoil, stay tuned.

In the meantime, Zatlin out. Talk to you soon.