‘More Layoffs Incoming!’ – Reaction To Jerome Powell Continuing Raise Interest Rates

In this short clip, Patrick Bet-David, Tom Ellsworth, Adam Sosnick and Vincent Oshana react to Jerome Powell continuing raise interest rates.

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Federal press corporate hikes signals More increases likely the Federal Reserve approved an interest rate Increase of a quarter of a percentage Point and Signal plans to raise again Next month to continue lowering Inflation the decision Wednesday Following sixth consecutive uh rate Rises that were larger including an Increase of a half a point in December And a three-quarters of a point in November the committee anticipates that Ongoing increases in interest rates will Be appropriate in order to attain a Stance of monetary policy that is Sufficient sufficiently restrictive the Latest increase caps a year in which the FED lifted its Benchmark federal funds Rate from a near zero to a range of four And a half to four and three quarters a Level last reached in 2007 we can now Say for the first time that this Inflationary process has started the Federal share Jerome Powell said the job Is not fully done Tom what are your Thoughts on this Well remember Um Jay Powell has said That until inflation is at what percent Or I can see it or I can see it from Here Um see the whites of their eyes I'm Going to keep raising rates so he said The disinflationary process is started

What he means by that is he's starting To see the peak and flatten and like can Momentum start to come down but he says He's still going to be raising rates What this means to people listening is That all those headlines you see about Tech layoffs it's not just going to be Tech there's going to be more layoffs in Other sectors because this is going to Slow the economy slow down consumer Spending we've already talked and past Podcasts about Christmas spending and Things that were down and so this is Just a sign that the worst is over but He's still going to be putting these Quarter point rates there mortgages Right now are still seven if you're Doing a perfect credit seven and a half Even eight if you have horrible credit And if you have horrible credit and why Are you buying a house right now because It is going to be for you everybody else It's uh six and three quarters seven so This is going to keep slowing down the Economy but he says the job is not fully Done more is coming okay so so you say That but then I read a story here Tom From Insider that says the biggest risk To the market is no recession at all in 2023 JPMorgan strategists say this is an Insider story as well and this is on Page eight uh it says the biggest threat To Marcus right now is as if recession

Recession doesn't materialize forcing The Federal Reserve to remain hawkish JPMorgan strategist Mike Bell said the S P 500 or NASDAQ Composite are nearly up Six and eleven percent of the past month Respectively as Wall Street sees the FED Reversing its Titan campaign in response To an economic downturn but if the U.S Economy avoids a recession and wage Growth remains High then the FED would Not cut rates as expected and instead Would have to resume rate hikes in their Second half of the Year lifting them Higher than Wall Street currently Anticipates Bell said unfortunately at That point you're back into a world Where both bonds and stocks would go Down together he said but JP Morgan's Best case assumes there will be a Recession in 20 2023 that will allow Wage pressures to moderate and feds to Cut rate in 2024. the does that make Sense to you it does make sense and what It means is this Can I just paint a different picture Okay The economy is the cheerleader okay okay What does she look like uh she's Upstairs in her bedroom and Jerome Powell's in there with the cheerleader Okay and until the economy this is an Analogy We're being analogous right exactly And until the economy starts cooling

Down which would be your parents Headlights coming into the driveway he's Not leaving the bedroom and running out The back door wow that is what's Happening so the economy is going to Keep getting pounded by these interest Rates Tom please continue to tell me how Jerome Powell's up in the bedroom Pounding the economy I gotta know Running out the back door that's exactly But that's the way to look at this That's what JPMorgan is saying is unless We have a recession which is a little Bit of pain and shift in the economy Powell's not gonna move the interest Rate so in other words until we have the Pain of recession and some unemployment Which is terrible part of the pain but It's part of of it and we have you know Price starts to come down price coming Down on eggs would be a nice thing Especially for the Egg Master thank you Thank you but until that happens and so I'll use a more I'll use a nicer a nicer Approach you know if you you're out There snowboarding and you tear up your Knee Stretching that knee after the surgery If anybody's ever had a knee injury is Horrible you go to the doctor and it's Horribly painful stretching the knee is What has to happen for our economy and There is going to be some unemployment

There is going to be prices come down And it's going to be tough and if that Doesn't happen JP Morgan's saying if we Don't get a little bit of pain and that Doesn't happen then he's going to keep Raising rates and which they went into a Technical terminology which means bonds And stocks both end up in a bad place And the economy doesn't have a chance to Kind of cool off okay A little Pat so I Mean Tom so he's up there a lot of pain A lot of pounding is there any way he Could stimulate like the economy with Some I don't know like Viagra I mean Some stimulus here's the challenge to to Continue with the analogy that you're Taking yeah and the pounding that Tom Took to go with that analogy here's what You have to be thinking about yeah Imagine yeah honestly imagine straight Up if you're on Viagra yes four ten and A half years straight every single day You're just taken Viagra yeah that's What happened to the economy 128 Expansion see how we did that so that That's the that's the challenge of What's going on today we've been on Cialis Cialis and freaking all these Guys Non-Stop and now the economy is Like dude I gotta take a break I gotta Take a break by the way shout out to our Sponsors We have to go see Go Santa wife's wishes I've had two

Yetis full of coffee today and that's Probably the issue that's so funny so my My warning to you all no think about Also think about it this way Vinnie once The economy shifts and the prices of Things come down even though there's Some unemployment what are the people That have jobs start doing they start Buying incremental things again maybe Traveling a little bit more and so what That means is GDP goes back up because People start spending naturally and Prices have come down a little bit That's the whole circle of life they're Trying to manipulate here but is there Going to be like a moment you guys think And Tom do you guys think you taught Them is it gonna be like a moment where It's like all right guys this at The fan we're like is there an Announcement when you hit like a real Deal recession like that's really bad it Tends to be a slow drip drip drip and Then a drip like in 2008 when I when I Experienced my first like yeah like Taste Of The Nightlife yeah was it was Markets down 500 today Market's down 800 Today we're talking about the Dow Typically yeah Market's down 900 boom We're down a thousand and then it's like Next thing you know we're down 40 or Whatever the number was slow drip drip Drip drip drip you you were already just Starting

You think I think you had just started PHP right after that I want to say so That was so there's no actual moment Just everybody looks around and goes It's we're inside of it right now can I Can I give a little yeah so number one Shout out to who I think is the most Important figure in America today uh It's his birthday this weekend And uh I'm not talking about me we share The same birthday I'm talking about Jerome Powell February 4th pull them up Rob just so I can fact check this thing Let's take a look at this let's see the Cheerleader I already sent it to Rob but Now he's doing the work I don't see the Guy like the cheerleader boom look at That February 4th shout out to him but 53 so this is a zero birthday for him Man it is it was gonna be 70. shout out To my to my dad Jerome pal but I just Want to give you some some quick numbers Real quick just so you can kind of wrap Your head around the numbers because I Think Pat teed up uh exactly what we Should be discussing is that These prognosticators who are there's a Recession in 2023 no way it's going to Be 2024. what's Biden going to do no way Biden's gonna enter a 2024 election if There's a recession he's going to Stimulate the economy whatever it is Here's just some numbers for you Inflation for the year I know is up as

High as eight percent overall was 6.5 Year over year last year I think they Want to keep it somewhere around two to Three percent so it's almost double Where we'd like it to be in the United States unemployment somehow is still Three and a half percent I know that you Think that's gonna increase dramatically Over the next few years we'll see the Last time it was three and a half Percent was under the Trump Administration I want to say somewhere In the 2018 range where he was bragging About hey this is you know lowest Unemployment lowest uh blacks Asians Whites it was It was obviously a great Time for the economy at that point but Here's where I want to go to this we've Talked about this a few times this fear Greed index uh CNN does a good job about This Rob I don't know if you want to Just pull that up the feared greed index One month so it's zero to a hundred Hundred is like full on Greed zero is Like shockingly fearful Um Right now one month ago one year ago we Were at 28 28 just to put in perspective That's when crypto started falling yeah Absolute fear extreme fear mode a month Ago it was 38 which was essentially fear Mode essentially way less than neutral Now today we're at 68 which is like Trending towards extreme gear agreed so

I don't know what's happening in the Economy over the last month but some of These numbers inflation going down Employment being strong I don't know I Can't make sense of it is like is the Economy in shambles are we doing better Than ever are people greedy are people Fearful I think to answer your question I think there's a famous saying like Trying to predict the stock market is The equivalent of trying to figure out a Drunk stumbling man figuring out his way Home he's just gonna yeah that whole Deal so you know you always hear these Prognosticators Um who continually get it wrong what do They say like a monkey throwing darts Has a better chance of predicting where The economy goes last point I wish what They did like you ever watch uh you know Fox NFL dollar you know CBS NFL they Show or ESPN they show the whether it's Stephen A Smith or booger Smith or Whatever these guys names are Chris Berman all these guys they show their Record for their year against Predictions all right Chris Berman was Uh 48 and 72 this year it's like turns Out you don't know yeah okay I wish They did that for people in keeping them Financially great for stats great idea Let's forget let's see what happens well If you take a look here and by the way Thanks for bringing this up Adam this is

Really any time Tom no no no I love what happens no I meant that Sincerely Adam is talking about a good Index to take a look at and it talks About the emotion driving the market It's not necessarily consumers out there You and me it is the emotion driving Market what has been happening right now We've had a lot of layoffs the market Likes layoffs because it means a company Is going to be cutting its costs and in The short time the stock is going to pop A little bit so guess what greed hey I Can go get a little bit of a pop off That stock because Facebook you know Laid off people had a pretty reasonable Quarter and they're buying back shares Hey I got a little pop I can get out of This that is agreed Index this doesn't Necessarily relate to Consumers but Right now with all the layoffs and Things have happened the market is in a A little pop cycle where people are Investing in it these are sophisticated Traders and taking advantage of the Pops That have come from the the layoffs and The few companies that had reasonable Quarters so if you like this clip and You want to watch another one click Right here and if you want to watch the Entire podcast click right here [Music]

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