In this short clip, Patrick Bet-David, Tom Ellsworth, Adam Sosnick and Vincent Oshana react to current interest rates and unemployment.
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Fed officials on board with more modest Raid hikes this is a reuter story According to Fed officials more interest Rate interest rate hikes are expected as A central bank aims to cool inflation New York fed President John Williams Stated that moving a federal fund's rate Of between a half a point I'm sorry five Points to five and a quarter seems a Very reasonable view of what we'll need To do this year however he also noted That the FED would probably be able to Make us take smaller steps relative to The pace of past tightening campaigns Jerome Powell added that if we continue To get for example strong labor market Reports or higher higher inflation Reports it may well be the case we have To do more okay Williams also emphasized The importance of monetary policy to get Into State levels will strain okay Anyways Um Tom what are your thoughts when hear A story like this based on what Powell Is saying and last month 517 000 job Report new jobs which is a good number And then we're going to talk about the Layoffs here in a minute what do you Think is going to be happening with Rates here wow there's a whole bunch of Things to unpack here first of all we Can talk about the jobs really really Fast and about how some of these jobs For people getting back to work after
Covet and it's a lot of hospitality jobs That are in there but when you get that Report that the White House does a Victory lap on down the street Powell Sees that and goes I got to keep raising Rates this this economy is too hot so It's it's uh does the White House really Want Powell to be reacting like that and How important what you just said it's Important what you just said so the more The numbers look better the more he will Increase rates because remember what's Pal looking for two percent inflation He's looking for two percent until he Can see two percent he's staying up in The bedroom with the cheerleader so we That's right you know we can't forget The truth Pounding the poor economy but um so That's part one part two part two of This is what Powell is saying is okay I'm only going to go to quarter points And I'm going to stretch them out a Little bit but he's still raising rates He's still raising so what he's saying Is yeah the economy now has a great Point has now got uh about 50 percent Heading towards 60 so it's still an F Heading toward a d but it's getting Better that's all Powell is saying is I'm going to stretch it out but I'm Still raising rates so rates are still Going to be going up mortgages aren't Going to be going down and what was very
Interesting and I flipped you a text on This uh yesterday is but Jamie dimon is Saying hey we're not not out of the Woods yet and down the street at B of A Because you know Jamie's uh JP Morgan Chase down the street at BNA their Research yesterday was talking about the Same charts that we talked about on the Podcast almost a month ago about savings And credit card debt and they're saying It's not going to take much unemployment For this to be a very hard Landing so We're not out of the woods yet and I Think that's what all of this is Pointing to here's what's crazy do you Know when is the last time do you know How many times we increase the rates Last year 2022 not including one we did This year how many times we increased Rates last year six times seven times Last year was seven times do you know What's the last time we increased the Rate seven times in one year do you know What's the last time we did that 19506 2005 is the last increase of seven Times okay we did eight times uh one Time which we increased it eight times In a year but so anytime the rates go The way they're going what follows is Unemployment that's the Phillips curve The Phillips curve says interest rates Inflation high unemployment low you flip It inflation unemployment High inflation Interest rates are low so those things
Go against each other right so the way It's looking right now if they keep Pushing I know if any this is something You study very closely if they keep Pushing this unemployment is going to Crash tremendously by the way fun fact Fun fact you ready for this yes sir how Many times you think we lowered interest Rates the most in a single year what is The record of the most times we ever Lowered interested what was the year and How many times was it I'd be so curious Enough you know you're probably not Going to get it right so don't go to the Year you're thinking you're going to go Because it's economic expansion it's a Different year what is the most times we Lowered interest rates in a year I just Want you to know before as you guys Think I just went from Fearless to Fearful like right now it just happened I'm Festival what do you think Was it 2008 When we dropped everything To a half a point and we dropped like Five times now what is the most times we Lose most interest rates in a year Once I'm I'm guessing this pure Speculation was under Ronald Reagan okay So it was 2001. okay but then here's the Question how many times do we lower it How many times are we lower it in one Year in one year it's a crazy number Like I had to keep reading this article Over and over and over because I
Couldn't believe it Is it eight nine times so is that the Was that the nine time drop it was in 2001 and and people are commenting right Now because they Googled it 11 times 2001. That was a nuclear winner that was a Tough one session lower and lower and Lower and back to back to back to back So look you know the the feds control What happens to the economy okay when You hear the Saint Jerome Powell's the Most powerful it's not because he you Know it's just the same he really is but Right now everybody is trying to kind of Get Powell to play along and Powell the Good thing about pal which is kind of Weird he's the the guy that's the Fed Chair who was put in there by a guy Named Donald and he's still there by a Guy named Joe okay which means he Doesn't he's not he doesn't favor the Right he doesn't favor the left he used To work for Carlisle group with Rubenstein so to him he's just saying Guys I have he's one dimensional two Percent to get there he's gonna keep Increasing interest rates which is going To be very weird on how bad not Everybody now is saying well it's going To be a soft Landing it's going to be Soft Landing it's going to be soft Landing you know what's a great thing When people say things like that
Paranoia disappears you know what what Happens when paranoia disappears The bit the best opportunities come Right after paranoia disappears the best Opportunities to things to buy is when People get cocky people are starting to Get a little bit cocky again about the Fact that this inflation thing this Recession thing is going to come by Adam What are you thinking by the way I'd Just like to get a running tab of this Is something we should consistently do Rob would you pull up the fear greed Index with CNN what they typically oh The monitor where the markets are right Now that'd just be good to kind of Monitorial what do you think we were we Went from full-on fearful 30 days ago I Think it's green it's a little bit Greedy right I think we are I would say We're I'd say we're in the green index I'd say we're in the green oh look at That look at it a little greedy we're Getting greedier I think it was at 60 Something percent a week ago so I don't Know we're we're we've moved out of the The fearful state of the economy into And by the way look look at what you're Saying right there this is very Important what Adam is saying zoom in a Little bit zoom in look at one year ago What was the score 33 a year ago about a month ago we were 51 yeah so from 51 we've gone to 72 and
A week ago was 76 which is extremely Greedy I don't know interestingly yeah How how I know it is significantly so is This greedy from me meaning like people Like you know the the cause of their Houses are going down and people are Buying or buying more you know you're no Longer like staying tight 99 store You're not going there anymore It's the opposite of fear he's like all Right let me get out there and explore a Little bit fearful Fearless like people Are fearless today today's Fearless yeah Well I think since you're you're kind of Giving us a history lesson on uh the Amount of uh uh interest rate hikes and And lowering it I think it's important To to note it's currently at 4.5 we're Talking about the FED fund rate right And that's the the rate at which what Commercial Banks loan each other Overnight money to match reserves is That that's essentially what it is right Tom uh and then it's obviously the FED Uses interest rates and rate hikes to Cut kind of cool inflation Uh stat for you Um we talk about what mortgage rates Were in the like the this for sale or no And we should put it on no I'm asking You serious questions Everybody's saying you look like Maverick you look sick on camera but It's not for sale no it is for sale you
Could buy it off my back right now [Laughter] That's right For three thousand dollars History lesson we talked about how in The 80s uh interest rates mortgages were Double digits do you know what the FED Fund rate was in 1980 when Ronald Reagan Took over presidency 20 that's what Banks charged each other oh wow to Borrow money 20 are you kidding me it's At four point five percent by the way it Went down to zero percent in 2008 and Then during covid so these dramatic Great hikes and and lowering the rates This is essentially this is what makes America tick right we get so caught up In politics and Joe Biden Trump and this but this is the the we Talk about drone power being the most Powerful man in America these rates are Wildly different and how does this Affect you this affects you with your Mortgage with your loans with your car Loans what about your paid in student Loans whether it cost to borrow money Small business loans these are the Numbers you got to kind of pay attention Yeah so let me credit cards for sure it Goes right next to the store here to Transition after perfect timing for this Jamie Diamond warns is too early to Declare Victory against inflation JP Morgan Chase Jamie Diamond suggests that
The Federal Reserve could raise interest Rates higher than expected if price Pressure persists his comments come amid Growing signs of inflation in the U.S Economy including the strong January Jobs report Diamond says people should Take a deep breath on this one before They declare Victory because a month Numbers looked good the hiring surgeon January has complicated the fed's fight To lower prices and tame inflation some Of the which uh stems from the Imbalanced labor market employers added A whopping 517 000 jobs that's what I Talked about earlier nearly tripled what Wall Street expected by the way that is Insane once again like to talk about the Timing was perfect right before uh State Of the Union speech for President Biden 517 000 jobs that were expecting a third of That okay while the unemployment rate Has dropped to 3.4 percent first time Since May of 1969. okay may of 1969 the Fed last week Voted to raise its Benchmark interest Rates to four and a half to 4.75 and Signaled that more increases could come This year okay so if you enjoyed this Club you want to see another one click Here to watch another clip and if you Want to take advantage the latest gold Signature Series products that just came Out we have a bunch of new merch that's
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