The Fed: Get Out of the Market NOW
The Fed is hellbent on taming inflation…
Even if it triggers a recession.
How do we know it’ll come to that?
Because the Fed just admitted it. Get prepared now.
For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.
The Fed: Get Out of the Market NOW
The Fed doesn’t speak plainly.
It speaks in code.
The good news? I can translate and tell you exactly what it’s saying.
The bad news? A recession is coming…
Whatever it Takes… Even a Recession
Here are the latest words from Fed Chairman Jerome Powell [emphasis added]:
“We have got to get inflation behind us. I wish there was a painless way to do that. There isn’t. What we need to do is get rates up to the point where we’re putting meaningful downward pressure on inflation.”
Will his actions trigger a recession? Absolutely. But the Fed doesn’t care.
An increase in unemployment? Oh, well.
Higher mortgage costs? Too bad.
A recession? Yes, if that’s what it takes.
The Fed’s Strategy
Inflation is currently at eight percent. But the Fed wants it closer to five percent.
Inflation is already dropping in areas like cars, gas, and shipping.
Now the Fed has to get housing under control, since it’s responsible for nearly one-third of overall inflation.
We’re already seeing a pullback in new home construction.
And companies in the home-building industry — including Lennar (NYSE: LEN) — are forecasting layoffs this year.
Layoffs are absolutely fine with the Fed, as long as they help kill inflation.
But now the experts are wondering:
How severe will this recession be?
What the Experts Aren’t Seeing
Many “experts” are forecasting a mild recession.
Jamie Diamond, CEO of JP Morgan Chase, said the “U.S. consumer is actually still in good shape… confidence levels are going up and jobs are plentiful.”
And Jane Fraser, CEO of Citigroup, echoed that sentiment, saying “We’re fortunate to have the consumer in good shape entering into this.”
But these two are foolishly optimistic. This recession may not last long, but it’ll be fierce.
Keep in mind, very few layoffs happen during the holiday season. But post-holidays, in early 2023, huge layoffs will happen…
And that’s when the stock market will plunge.
Here’s How to Weather the Storm
Folks, a recession is coming.
Bubbles don’t ease; they pop. A lot of pain is coming in Q1. That’s when the shock will hit.
And it’s going to take its toll on investors. At least those who aren’t prepared.
Things will be better for investors in the Spring. But right now, I want you to play defense.
If you’re a “Pro” subscriber, I’ve got a great idea about how to weather this storm.
In the meantime, Zatlin out. Talk to you soon.
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