Inflation HAS EXPLODED HIGHER ... And The FED CANT DO ANYTHING...

[00:00:00] Mark Malik: hello everyone welcome to the wall street truth bombs radar report i'm mark malik i'm the founder of wall street truth bombs you probably recognize me from the videos guys this is where we cut through the noise and focus on what's actually driving markets no spin no narratives just the data and what it means for your portfolio i want to also add no politics just policy tonight we have got a stacked lineup as we do every week and every one of these matters for where markets go next and what it means for your wallet most importantly you want these things on your radar my friends markets are navigating a week of back-to-back inflation shocks and fresh militarily escalation military escalation in the middle east the headlines are moving really really fast and they've changed a lot even today as the market ran through its session but the data underneath is the real story first we got inflation reloaded we're going to talk about ppi ppi dropped uh this morning uh at 6.5 year over year ouch that's the hottest wholesale inflation since november of 2022 do you remember november 2022 inflation was rough back then on top of yesterday's cpi print of 4.2 percent which was also a pretty hot number inflation my friends is not coming down at all it's going back up and we're going to dig into that a little bit uh then we have uh the hormuz premium everything driving those numbers traces back to 121 mile wide waterway which we are probably so tired of hearing about and this morning the united states launched fresh strikes inside iran but by the afternoon the story even changed once again we're going to break this down a little bit and talk about what's behind the story and what we can expect uh if in fact some of these uh peace uh some of these peace initiatives follow through and finally uh we can't ignore this we can't ignore that uh this is kevin warsch the new uh chair it's it's going to be his first test as the chair the fomc meets next week uh um and um that's going to be a big one it's going to be his uh inaugural meeting but whether or not it's his inaugural meeting or not it's going to be a very very important meeting for all of us it's going to impact all of us so we need to break that down a little and unpack it we're going to talk about that rate decision that's almost certainly going to be a hold but what matters is going to be something called the dot plot if you don't know about it we're going to talk a little bit about that today guys i want to remind you to drop your questions in the chat i'm going to be taking them live after each segment uh i'm going to jump into it in one second but before uh we started this uh the um this live stream today i got a couple of comments i just want to respond to right off the bat um it because this is this is just so perfect like the first person here um you know glow 56 012 um glow 56 was the first one waiting for us to start the live stream thank you for joining us and being prompt you must have been brought up the same way i was i was taught that uh to be on time is to be late um and if you know what that is you know uh you obviously have an austrian or german parent uh because that's how i was brought up but glow showed up right away and glow told us this is the quote right it's amazing how the market shrugs off bad news and goes ballistic on good news a sick mix of euphoria fomo and greed surely this won't end well i want to underscore that uh because that is so right uh glow um that is absolutely the case that has certainly been the case uh in this market recently um how markets seem to be shrugging off bad news um and there's plenty of it out there um that doesn't mean i'm telling you that to sell and things are going to go to hell in a handbasket but a lot of the a lot of the bad news seems to be taken in stride lately um obviously i try to highlight some of the news i highlight everything but a lot of times the uh the the bad news seems to be shrugged over uh by the mainstream media because it's just not convenient to talk about the bad news when the market's flying to new highs every single day i think that's why people uh push those numbers into the shadows and you know we like to shine the light on the shadow data glow right um but i will tell you you're absolutely right there's a lot of euphoria out there there's a lot of fomo and there's certainly greed um and there seems to be very little fear out there right it's always about the the blend between fear and greed there seems to be a lot of a lot of uh fearless greed out there a lot of fomo um i am not going to talk about the spacex ipo which is being priced tonight uh and i'm sure you're all tired of hearing about that um but you know it it is worth noting um that uh this spec the spacex ipo can only exist in an environment like what we have today it couldn't have come public last year right the company is not necessarily in better shape than they were a year ago uh however uh it's no coincidence that you are seeing some of these mega cap um ipos we used to have the we used to have unicorns uh then they became decacorns uh and these are descriptions of companies that were private that are going to go public that were worth a ton of money uh you how do you describe a trillion a 1.8 trillion dollar ipo um that is beyond a decacorn i think we're going to have to come up with a new name um and it's beyond even the the world of the magical world of unicorns uh and of course we also heard about um anthropic uh the ai company and now open ai also uh jumping in line because they have fomo as well but that said this plays right into what glow uh 56012 said which is there's a lot of this uh positive energy out there for stocks right now regardless of the macro backdrop and that is why companies are able to come public at such uh such uh elevated uh elevated uh exuberant levels um and which in certainly in the case of the spacex ipo is not at all tied to any real numbers but just hopes of how great it could be to uh colonize mars and put data centers um in space which some of it makes a little bit of sense um probably the latter not the former uh and now i even heard something about time travel uh i will leave that one to you guys uh anyway in this environment we've got to really be careful that's why it's really important uh and i want to thank you guys for joining the community i want to call out the fact that we did hit 50 000 subscribers um this uh just the the other day uh it's all thanks to you guys uh we have a really really robust community uh and that makes me happier than anything never mind the numbers obviously the numbers are how we pay the bills uh and that's how we're judged for some crazy reason but i absolutely love the comments i love the support um i love the questions uh i love it when i make a mistake and i make mistakes uh that you guys call me out on that uh i read these things we all do uh everyone on our team here reads them making sure that we get it all uh but this is the most important time for us to pay attention in this exuberant market this fomo market uh that uh we really got it we really got to um talk about that okay one more thing i want to mention before i get started um let's see oh well this is going to be a really tough one right this is something i'm going to try to address today um z from uruguay i think z from uruguay has been in before uh welcome back um uh and uh he says mr malik it's doctor actually but i'll take mr malik mark is actually best um if you were kevin warsh how would you go about fixing the k-shape economy wow right this is the challenge of a generation you hear it coming up all the time um it's a real tough one just for those of you that don't know what the k-shape economy is uh we started calling this k-shaped economy right there were these these um hockey stick economies where they fly straight up right so everyone uses uh everyone uses shapes and letters uh to describe this but the k-shape economy became a thing uh right around covid uh like more popular in terms of calling it a k-shape economy where you have two separate groups living two separate lives right um you have the group that is doing very very well that is spending lots of money uh that sees great growth in their wealth on a daily basis uh that really uh is obviously not impacted by the regular um gravity of economics that being prices affordability stuff that affects most of us right um there always was a bit of a k-shape economy um you know we talk a lot about the middle class disappearing people are either shoved into the upper class or they're pushed down into the lower class this is not something that is new this is something that has been happening quite a bit over the last decade or so uh but it has become far more pronounced uh more recently uh more recently uh again i think we get a lot of comments about this which is how is it that i'm feeling like i can't afford to live but yet i'm seeing the stock market hit new highs every day and these companies are doing so well uh and people are at the mall people are driving nice cars how are people affording all this stuff um and this is a real real challenge and um there are lots of reasons for how they're affording it right we don't want to talk about that today debt and other things like that uh but it is a real real problem uh right now and it's getting far worse because i feel like a lot of the stuff that we talk about at wall street truth bombs really represents that sort of lower k and when i talk about the the the uh pains and affordability um and so on it strikes a real chord certainly with me i am not immune to that um and uh you know i go to the grocery store and i'm shocked at my bill um i have to pay those crazy gas prices as well and it affects us and i can tell you that my income is not going up faster than the price of of things um so that k shaped economy is a real problem and the question is really going back to z's question how can how can warsh fix that problem well it's really hard for the for it's really hard for a fed which is responsible for monetary policy to directly impact that sadly my friends um it is really a fiscal problem right and the fiscal policy falls in the hands of the government right the government proper not the fed we're talking about about the executive branch the president and we're talking about the legislative branch that is congress so really um you know that's where a lot more can be done to fill in the gap or try to create policies that narrow that gap and it's a challenge right because you know it's not as easy as just giving out money uh that's not good for the economy either we all know that although none of us would be uh averse to accepting any money uh but unfortunately policy is really the tool to fix that and that is fiscal policy um and we now know that you know unfortunately the government uh the certainly congress has a hard time legislating um and uh that is a big challenge we've had as well and that may explain why uh we have seen some of these problems but with regards to again the fed right still the fed does impact how we live and it does affect our lifestyle right if a fed is going to be tightening credit making things more difficult for us trying to fight inflation by putting more pressure on you and me by raising our cost of living and that's what the fed does that certainly is not going to help the k-shaped economy right because if interest rates go up and you happen to be on the bottom k as we all probably are on this call um that um guess what that means you probably have some debt you probably have some credit card debt you probably have a mortgage you probably have an auto loan uh you probably do require debt to do things in your life to to be able to sort of fill in some of the bumps if we raise interest rates well that's just going to make life more challenging for you um if if your credit card if credit card rates go up uh i don't think it's going to affect elon musk um he's definitely on the very tip of that k especially he will be tomorrow um and so i don't think he's worried about his credit card debt or or mortgage rates or anything like that no it affects people like us it affects younger people uh who uh may be just getting out of school struggling to find a job wanting to save money uh to buy a house to buy a home you know all of these things will affect uh the economy and they certainly will make that lower leg of the k the people who are struggling uh make it much more difficult so i don't know z i hope i answered your question um i will um again this is not a show about politics but you know i could just tell you know you got to think very carefully uh about um about uh you know who you vote for uh and whether that person is speaking to where you fit on the k um and that is all i can offer uh without telling you which to pick um you know there's benefits on both sides of the aisle um but that i would tell you that you know that's really the solution right there anyway let's get down to it uh with that after that little soliloquy that i dropped on you guys today but thank you so much for the comments um i see i have someone uh from taipei thank you so much for joining us good morning from taipei uh that's amazing i love it i love it um anyhow all right let's get into inflation reloaded i'm going to spend most of my time on this today uh because this is a real factor um the headline stuff that's going to that has changed seven times today i will i will briefly go over that anyway drop your comments in here i'm going to try to answer some after uh some tangible comments after this segment so we're going to talk about the two inflation prints that we got in two days and neither one of them unfortunately is what the federal reserve wants to hear going back to z's comment earlier yesterday we got cpi that's the consumer price index that's what you and i pay that came in at 4.2 percent year over year guys that is the highest since april 2023 that's uh more than a year uh this morning we got ppi the producer price index that's wholesale inflation that came in at a much more robust 6.5 percent year over year ouch ouch that is the highest that we've gotten since november of 2022 as i said earlier you probably remember uh 2022 as being that year where all of us could not let go of the bar on the roller coaster uh that is really where the most vicious inflation in many people's lives uh really really took hold um and let's talk about ppi a little bit more because it matters in in my view almost uh more right now than cpi but let's first talk about cpi versus ppi um ppi producer price index right cpi is consumer price index that's what you and i pay at the grocery store we pay for services that's what that measures and that is not good right uh that number is is very very high that's what the fed focuses on uh and so we talk a lot about that uh but the question is is it's here now but where is it going in five months from now where is it going by the end of the summer uh is it going to continue to trend in this direction a lot of people have been waving off the cpi saying oh well it's because of energy um and uh because of course gas prices are going up and of course we want to blame things right of course it's because of the war in iran uh it's because of the you know it's because of the strait of hormuz and that's okay it's not necessarily blame we want to find out what the what the what the what the cause of the effect is right and so uh it's natural and it is a big challenge right um inflation was heading in the right direction prior to uh the war in iran uh and of course we've seen energy prices spike um and as a result of that right you know exactly because you pay for gas at the gas pump um so the the the mainstream narrative on that is as well once the president gets this resolved the uh energy prices are going to come down and everything's going to go back to normal and that's going to be great and so thankfully hopefully you know gas prices are going to go back down the full dollar that they all went up i'm sure it went up more in a lot of places um uh but that's what everyone assumes and uh unfortunately what i've been saying for quite some time is they're not going to just come down very very quickly and we have to think about it like that very carefully um and uh so you know first and foremost it could take and and some of the most well-respected energy economists out there uh are are are conservatively talking about six months uh and i have a very very good friend that's in the industry and he too told me that it's not going to get normal to the end of the year even if even if uh we have a situation where we solve this and we sign an agreement tonight and tomorrow everything uh is the straight opens back up and uh assuming everyone keeps their side of the bargain the deal uh and so it still could take a long time okay before that comes down but interestingly so as much as i think it's important to watch energy the energy component in cpi it's important to watch of the broader uh excuse me the narrower aggregates what do i mean by that so we talk about the core number right the core consumer price index and the regular headline cpi you've probably heard that the core cpi uh that strips out energy and food now i jokingly talk about that on on this on this very stream every now and then why would they strip that stuff out uh because that's what affects you and me every day like we all need food we all need gas uh but the reason that they do that um is because it it's it those are more volatile and i always say you think yes they are volatile but usually for not these reasons okay um food uh food uh inflation is very volatile because it is at the mercy usually of crop yields and things like that and that does go up and down based on weather patterns uh and all sorts of things and so they tend to be a little bit volatile but we're not talking about volatile in the way that we have seen it right so little bits of volatility you like to smooth those out so you can understand what the trend of inflation is which is more important what what than what the individual reading really is okay and so that's why we look at the core cpi uh and like i said there are some big asterisks on that uh which we can spend a whole show just talking about but that said i'm looking at core now why am i looking at core right now when energy is the biggest driver of uh inflation at the moment i'm looking at core uh because i want to see what uh what regular inflation is doing right so without energy without energy okay because we know energy is there and so we want to see is that going up because if core inflation is going up well then we have a much bigger problem than the straight of our moose so that is why i watch core inflation and that really is going to show us how quickly we start to see energy inflation go back into the system and come back to us so we know the price of crude oil is going up we know that diesel is going up we know about all this stuff but when is it going to start affecting regular inflation now remember remember a year ago inflation was coming down it's coming down slowly but it was coming down and everyone thought it was licked and now guess what in this last reading that we got let me see if i have it in my notes here somewhere the core inflation the core cpi came in at 2.9 that's core cpi consumer price index and that uh bumped up from 2.8 to 2.9 now it's one tenth of a percent you might think of yeah it's a rounding error who cares well my friends that was going down now it's going up and so if you break it down and you start to look there that starts to that's where we start that's where we would start to see uh energy inflation moving through other areas of the economy right so somebody is producing whatever product that they're producing their costs are going up because they have to pay more money for diesel fuel to deliver uh to deliver their products and so once they start doing that once they start passing those through to consumers and i've put a lot of videos out on this uh earlier on about um about how crude oil uh is in everything right it's in plastic it's in all kinds of things and once those prices start to go beyond energy the energy component and show up in the other parts of cpi that's when we have to worry guys that was shrinking now it's going back in the other direction okay and if you just look at the chart of core cpi you will see it's not a it's not a huge upswing but it was trending downwards and now it's moving upward and that is an early warning sign and by the way once it gets into that part of the system okay it's like tar okay once it gets on your shoe it's very hard to get off it's not going to come off that quickly because it's already in the system and you know uh from experience as well as i do that uh companies are very quick to raise prices but very very slow to lower them right so you're not going to suddenly walk into your hairdresser and they're not going to suddenly say guess what i'm lowering my cost for a haircut or a blowout or whatever it is you do um and i don't need either clearly um and they're going to suddenly lower their prices good news energy prices are down i'm going to lower my prices you know that's very unlikely to happen so once you start to see this inflation get in there we start to worry about sticky inflation one more word about sticky inflation um what we used to call sticky inflation a year ago was mainly in uh shelter cost so shelter cost was the main uh the main uh cause for sticking services specifically services versus goods and in services the component called shelter uh which is your rent uh which is something called owner equivalent rent which is another interesting thing that we can joke quite a bit about but it does capture the cost of providing shelter for yourself and that number has not come down since covid meaningfully it was the last bit of what we had from that spate of uh inflation the post uh post covid inflation and that was coming down but really really slowly like a feather um guess what it's turned back up okay so this is something that we need to shine the light on right this is not a convenient thing to talk about um on on in the mainstream media when stocks are flying but this is a reality because this is affecting you and i and it will affect consumption and consumption makes up two thirds of gdp i say it all the time i am obsessed with following consumption numbers uh and if two thirds of the economy is suddenly struggling because of inflation well it's going to ultimately affect gdp and that means the total output of our economy so it's really really important to see these early signs now speaking of early signs oh one more thing about cpi just for the just to get an idea it was 2.4 in january uh it's 4.2 now okay so that's consumer prices and i'll say you know one more footnote on on cpi uh and and just let's as level setting right when we talk about inflation the word inflation is a rate of change it's where prices were last year to where they are this year uh so that's what we talk what we mean when we're talking about inflation inflation measures how fast prices are going up they don't really give you a good idea of how prices uh absolute prices are so if the price of meat is too much money uh and it doesn't change for a year it's still too much money it's still expensive for us um and so that's what i think we need to sort of set here and i think a lot of people sort of lose that narrative when we talk about inflation and the cpi yes it's bad if it's growing absolutely it's horrible but the reality is is that prices are already high the base prices are high and so if you do nothing else uh to prices and they sort of stay here for a year you're gonna think you have no problem with inflation uh and inflation will ultimately come down that's because it spiked maybe a year ago you get this thing called the base effect which gives you a fake view of what's really happening in the world um but the reality is is you all know because you go to the grocery store just like i do and you know you know that your bill is more than it was a year ago and you know it's a hell of a lot more than it was five years ago and a hell of a lot more than it was seven years ago so that's by the way why we also look at we look at um wage growth uh and we also look at inflation right so okay inflation is terrible but it's really bad if your wages are not growing faster than inflation that is a real problem and by the way uh wages right now are not growing faster than inflation so uh no matter what what you're doing if your wages are growing if you're lucky enough if they're growing on average uh guess what your buying power is diminished right now and that's really what the the things that we have to look at so cpi an important number helps us follow trends helps us see things lots of flaws in it uh that we can discuss but let's not forget the reality is that things are already very expensive right now going back to z's comment at the beginning this k-shaped economy it's a real problem it's a real challenge right now and i think people are not seeing that reality because we tend to hang on to some of these numbers a little bit too closely without recognizing the numbers behind the numbers and that really is the shadow data that we like to talk about okay now i'm moving away from cpi ppi producer price index um so ppi is a leading uh is a leading indicator of cpi you want to know where cpi might be in two months you look at the ppi that makes a little bit of sense right the producers if they're paying more at some point and we know the numbers right because we're numbers people here and we know that in 45 to 60 days uh we're gonna see those numbers start to show up in the cpi for you and i their prices are going up the price of goods are going up for whatever reason uh you can uh their input costs uh their service costs if those are going up you can rest assured that ultimately we're going to see some uh or all of those cost increases that is of course if these companies want to maintain their margins and uh show me a company that doesn't want to maintain their margins now i know there are companies that do eat uh some of those costs they try to renegotiate with their suppliers they do all sorts of things they don't want to raise prices but they ultimately have to um and um and companies uh are rational right in our economic world companies don't lose don't want to lose money you got to think rationally they're not going to lose money so that means what do they do they they they charge us more and that's really how it works i know that's a little abstracted but that is really how it does work and you know it does you know it intuitively and we know it happens in practice so this ppi figure uh that we got today uh that was uh 6.5 year over year so their costs uh are growing so so uh wholesale inflation is growing by six and a half percent retail okay less but you know somebody's got to make up that difference somewhere it's not going to just disappear and we know it's not going to disappear overnight we talked about that earlier so something's going to come down and something's got to go up okay but at the end of the day i think it's pretty safe to say and i think most analysts and most economists agree that uh this is going to be higher uh the consumer prices are going to be higher and ppi is just showing that to us right now it's the highest 12-month game guys since 2022 and that is pretty hardcore now um within uh there i'm gonna i'm gonna give you a i'm gonna give you a shadow number uh in a second um but i want to make sure i got it yeah let me talk about the shadow data right so i hope i establish why ppi is important i like to watch ppi even more closely right because again that's how you know what's coming down the pike um and that's really important and this one was a real hot one we had a hot one last month i was revised slightly down but this one was a pretty hot number um and um i will also say i'm sure you won't be surprised to hear i think i have the actual number right here um uh which part of that uh gasoline prices oh yeah get well here's not it's not going to shock you right final demand energy uh in ppi uh jumped 10.7 percent like you could break all these down uh if you go to the bureau of labor statistics website you can see the breakdowns uh over here of these things and if you're interested in one just just uh send us a message and i can give you what what that aggregate was so energy jumped 10.7 percent i'm sure you're like wow mark that's a blinding glimpse of the obvious we knew that gasoline prices at the wholesale level if you break that down 23.4 percent okay so now here is where you have to think about this we're not talking about what you and i are paying at the pump this is what the producers are paying okay uh and so the producers are paying 10.7 percent more for energy costs 23.4 percent more for gasoline so this is going to the delivery truck that's delivering the stuff um it hasn't showed up in the stuff that they deliver to us so this is the point i'm trying to make that yes uh gas prices will come down when crude prices come down slowly but they will come down somewhat and they will eventually uh settle down and you know in the long run they're going to probably go down quite a bit but right now for the next year we're going to have a lot of volatility there but this is where the problem is and this is where we need to really think about how this all affects us is we got to be worried about how these gas prices go through the system again how are they going to affect prices of things that we buy in the grocery store they all have to go on a truck that requires gasoline of some type some type of fuel anything we buy is going to be somehow attached to this 23.4 percent and it at some point is going to find its way to you and me i can tell you what that is because we know because we know the numbers 45 to 60 days you're going to it's going to show up somehow whether the company chooses to eat it or not whether they eat part of it all of it whatever that is i'm not really sure so you can't draw a direct line but you can count on the fact that this is going to put upward pressure uh on prices so let me i hope i got that point across that's a really important point that i want to get across here so let me give you the shadow data you know guys i love the shadow data um the bls ppi they have this they have different groups in there right one of them is called the intermediate demand pipeline i kind of touch on that in the video that i put out early this morning you might want to check that out i get into this a little bit more because i talked about the two numbers um and so um but this is one that i really like to watch right this intermediate demand pipeline that's stage one they call it stage one it's raw and semi-processed inputs this is really what we want to look at right this raw number and so this raw number like this is the basic inputs to what people are making to sell to us at the end of the day and that number uh rose by 12.3 year over year that's nearly double the 6.5 percent headline number for ppi so that is your shadow number that you really want to look at that is the most important this is what manufacturers are paying and what consumers you and me are going to feel tomorrow that is exactly the number you want to look at right 6.5 sounded pretty bad right has 12.3 sound to you that is the shadow data you need to look at that stuff right there so these numbers were tough they were really tough i don't think anyone on on that is watching right now is surprised i wasn't surprised i was expecting to be hot um but that said that still has we have to think beyond this and think about the implications we're going to feel this in our wallets we're going to it's going to affect how we spend our money um it's going to affect the amount of things that we can buy other things besides our necessities um and that is ultimately going to have an impact on the economy and um of course uh typically the fed would uh the fed uh would be worried if we're going to spend less money uh in the economy but this is inflation this is what the fed has to focus on so this is the challenge that the fed has right now they can't lower rates they've got to in their minds raise rates to tackle this inflation but the problem is is it's going to only confound our demand and our consumption which ultimately will cause economic pain at the end of the day and so um you know i always like to joke and it's not really a joke that you know the best way to solve inflation is a recession and uh quite frankly it is it's the only time we ever see prices really come down materially and in fact uh for feds before these um before the the idea of uh soft landing uh came to be uh we only had hard landings right so if you're old enough you're my age you know exactly what a hard landing that's what it feels like because we had many of them uh during the greenspan era and the volcker era and that is really how you lick inflation right you make it so untenable for consumers that they literally stop buying and companies start firing and you end up in a recession and nobody's buying anything so prices naturally come down i'm not saying that's going to happen but i'm saying if this persists the probability of those things uh will increase no question about it this is basic stuff right here all right here's your truth bomb federal reserves entire rate cut narrative was built on inflation falling toward two percent but the around wars energy shock has reset the board completely and wholesale prices right now are telling you that consumer prices have unfortunately my friends further to go okay so right now i would love to see if anyone has any questions on inflation i'm sure there must be some here um oh the real inflation rate well that's a tough one so so glow uh 56012 i don't know what you mean by the real inflation rate um but um are you uh you know you sent something like 12 percent um well if we're talking about real real means something in finance right real is inflation adjusted usually but when we're talking about inflation right look there are all sorts of uh glow there are all sorts of um criticisms of how we how we measure inflation um and there are a lot of them for cpi the consumer price index um it's how we measure it who we measure um how we calculate those measurements um and you could see i will just say this um without getting into too much of the dirty details of this i hope that in this last segment we showed you that there are places that you can look in the published numbers that can give you a much better read on what's really going on and um and that is not necessarily because you know clearly i'm sure most of us are experiencing inflation that feels way worse than three three point four percent or three point two percent uh or four point three percent sorry um so um so look at these numbers look below the surface come to wall street truth bombs because we like to shine the light on those shadow numbers um and so 12 i don't know if you where you picked out that number but it seems it seems interestingly close glow to that number that i just talked about in the ppi number so you know maybe that is the number um you know if in fact everybody's uh everybody's costs are going up by 12 percent and the companies choose to pass along that full 12 percent well maybe maybe you're onto something maybe this 12 percent number is real that would be very untenable i don't know about you but my income has not gone up uh above 12 percent um in the past year um if if prices of everything rose by 12 we we'd all be in real trouble uh this would be a very very different uh live cast we'd be talking about how to how to uh how to garden and things like that um and by the way there are lots of great stories which i could share with you about how this did occur in history right during the great depression um and how people were resorting to eating um you know eating their seed corn um because uh you know they just couldn't afford to eat um and so yeah you know we don't want to have to get to that point but certainly at at 12 that would be terrible anyway uh yeah look at the shadow data you know where to find it right here um how manipulated do i think the market is and does it even uh does today's rally even make sense that's santiago la court 2946 um well manipulation uh is a very interesting thing um i don't think the market is manipulated per se uh the market is free uh that doesn't mean that people don't try to manipulate it it doesn't mean that there are not algos that push the market around because they have so much capital to push the market around um so yeah markets do get pushed around a little bit by the big guys uh and typically uh us little guys get stuck between mating whales um and that does certainly happen um but i will tell you uh that the market is rallying right now and it's rallying on for a couple of reasons there's some good reasons we just had a pretty good earning season um and so some companies really are justified in long-term opportunities so if you're a long-term buyer even though i'm talking about a lot of tough roads ahead of us but thinking ahead five ten years some of these companies if they continue on their current journeys will do very very well um and so there are buying opportunities uh there's all this negative so it doesn't always necessarily mean sell but this negative stuff as these negative things are building it means be really really really careful with what you buy look very closely at that keep your pencil very very sharp okay now let's talk about today's rally today's rally very interesting goes back to the to my what i opened with um with the the market um you know uh what i got from the first comment this is before i answered the one from z earlier right um you know we talked about this euphoria this is from glow glow 56012 right um so yeah this goes back to this today's rally um was very interesting this morning uh i wrote about this um and i have a video which is probably outdated but i'm going to put it out because it's a good a bit good enough video um we talked about i talked about coming in this morning and seeing the market rallying despite the fact that we were launching tomahawks um in the strait of hormuz um and so clearly uh this peace process had gone awry um if you just you know look at the president's uh tweets if you look at what the irgc they posted just yesterday the strait of hormuz is officially closed as if it wasn't already but you know the rhetoric was turned up and it looked pretty clear that wow the peace process whatever it is whatever you want to even call it this negotiation process has gone awry and so you would expect to see immediately you would expect to see markets going down but instead we saw all the chip companies that were just yesterday being literally murdered on the side of the road uh these companies lost tons of value just yesterday because bond yields were climbing and climbing and climbing but today we saw something very different this morning so i don't know what that early morning euphoria was but there certainly is a disconnect it's a continuation of the disconnect that we've been having in the markets right now and there is a very big disconnect now that's old news right because it all changed uh because later in the day the president announced um a headline right he announced that he's stopping the he's calling off the planned bombings and that we can expect to hear from him soon what the uh what what great deal that they actually struck um and so again this is a policy show not a politics show i have heard those before and i've seen the market rally before well the market rallied big time on those and i haven't even seen what uh has come out since then um all i could see in terms in terms of i'm looking right now live are there any new any new uh headlines that i missed um that might have pushed the market this is the market trading headlines santiago um this is uh what i've been word urging people not to do don't trade the headlines wait till we have a peace agreement not an mou not a half signed one let's see what's in it let's see if it in if it's endurable if it endures that's when you say the okay all clear again that doesn't mean don't buy stocks i'm not calling a market disaster here that just means until we can get a little bit more comfortable again uh we need to see what that is right so i'm not ready to say this thing is over i'm not ready to say gas prices are coming down i'm not ready to say oh all these numbers that we talked about in the last segment are gonna reverse um and don't worry about it um that's the headlines trading and again it seems to be much more positive back to glow's comment earlier on maybe it's fomo maybe it's excitement um the truth is there are some stocks that should be going up but there are a lot that should be not going up that are also getting pulled up with the current so you just got to be really really careful market not manipulated uh per se um and uh does today's rally make sense it does in this weird world that we live in santiago but whether it's enduring or not i'm not ready to jump on that bandwagon yet and say go all in back up the truck load it up this problem's passed i'm not looking past this at all um okay um elijah elijah elijah river at uh at the banker right um this is a good question here right we talked about the choppy market so elijah is asking us um i want to address the last part of your question uh will the market sell off tomorrow due to wash's you know meeting no well tomorrow next week is wash's meeting um and so um it it it it it can it very well can interest rates i put out a couple of videos on interest rates um i want to take an opportunity to say i made a mistake in one of those videos i i i mistyped something in my notes and i repeated it several times those of you that caught me and called me out thank you i'm human i am not ai um but the idea didn't change right i just mixed up two two numbers on the 10-year yield uh but bond yields are really really important right now and they're telling us an awful lot check out my videos on that i have one today had one yesterday check them out excuse me for the inverted numbers but you can learn a lot from those videos uh they're telling you a lot about what to expect next week with with mr warsh as he takes the helm at the fed um we're gonna have to see what what what warsh does markets i'm going to cover that a little later but markets are not expecting anything to happen at that meeting in terms of policy but warsh is most likely going to say something um and uh as i said to somebody earlier to one of the comments that i got that i put on that video which is um you know they're one of the comments on one of my videos was are they going to raise rates right and i said well the probability is no right it's a high probability that they're going to stay put rates right however there's not a zero probability that rates can go up and i have some videos on that too most a couple of the more recent fed uh fed heads that came in raise rates in their first policy meeting and um you know we just had an ecb rate hike this morning uh which is very very interesting that will certainly affect the fed that changes the calculus for sure elijah so it is possible that the fed does shock us uh with a rate hike um and uh there are a couple of other things that can cause the market to sell off next week after the fed meeting um let's see yeah okay i have to um even though even though dylan's telling me to go to next segment i'm gonna i i i got you dylan but i have to answer one more here i'm gonna just cut one of the segments out um but but i will get done in the right time i promise you i need to answer this question this is a good question here um this is from it's bean kx and ny how can young people protect themselves against core inflation there isn't much of a buffer for people coming right out of school wow that is a big problem that is a big challenge and there are so many challenges facing young people right out of school the least of which is the cost of education we know that um education based debt is growing um and we know that it's very very expensive i think it costs i think on average it costs close to two hundred thousand dollars for a bachelor degree right now on average um and that's a real big challenge you're starting behind the eight ball i can also tell you from the last employment number that we got um last week um it looked pretty good on the surface but if you looked at the underemployment rate uh and you look at the underemployment rate for people probably the the uh the age of uh it's being kxnny um those people the underemployment rate uh is 42 that means they may have jobs but they have jobs that they didn't need their degree for right so they're in a job that they're overqualified for it could be a part-time job but it's because they just need the money um and that just implies that they're probably not making as much as they should after having just spent close to two hundred thousand dollars a year that's a really big problem really really big problem unfortunately the way to protect yourself at that age is to invest and invest in assets that should uh protect you from inflation over time that would be the stock market that would be gold that would be things like that that should move up over time uh uh pari passu with inflation but that doesn't help you get by today and i get it and you're very much part of the problem right now and by the way that's been a problem for quite some time okay uh i hope i answered the question a little bit there um guys um if you're just joining us and you haven't figured it out yet um just by my bow tie um i'm mark malik i'm the founder of wall street truth bombs and um tonight we're covering uh inflation uh we're covering inflation reloaded the hormuz premium and wash's first big test we're well i was gonna say we're halfway through but i think we're probably a little bit more than halfway through but let's keep going stay with me here guys i hope you're finding this interesting let's talk about the hormuz premium i think we all know about it uh a month or two ago nobody even knew where that was uh everybody opened their google maps but now everybody knows about it i talk about it with my mother-in-law all the time um believe it or not she's in her 90s and she drives and she is pissed off about gas prices as she should be and you probably also hear me referencing my mother-in-law who happens to also be a wizard at grocery prices she knows the price of everything at every grocery store within a 25 mile radius of her home i get a lot of information from her because she is so real and if i can i'm going to get her in front of you and you're going to hear uh an earful from her i'll tell you that anyway um she knows where hormuz is and we talk about it all the time okay so everything that we just heard in that last segment right all those bad numbers clearly uh inflation they trace back to this one thing this 21 mile waterway straight of her moves this morning we had all that news come out we had news coming out in the afternoon as well um over here i just do want to remind you i i don't want to really get too much into this section here but we know that it is at the core of all of these problems that we have right now now i'm also telling you if this is the thing i want you to take away from this right you got to remember this i mean this is what the mainstream media will have you believing that it's going to end tomorrow and that everything's going to snap back to normal okay you need to walk away not not thinking that right that's the most important thing i want you to know and this is not a political thing uh i'm just telling you the numbers and the experts are telling us this and it's not popular because it's not convenient as part of the convenient narrative about this whole thing uh oil uh crude oil um reserves are running dangerously uh low so what do people do once the strait got shut down they started digging into their reserves and the countries did it and companies did it and you can only bring those reserves down so far before you have a real problem and those reserves are getting extremely low and it's very hard to track those strategic reserves but those reserves are trading really i mean excuse me they're going getting really really really low and if you look around on the internet um you can find executives not very popular because why would they admit this of major energy companies saying to this very thing we're running dangerously close to the bottom of our reserves meaning they can then only send it out to people as fast as it comes in um and so that uh will have a material effect on supply depending on where we are in the world right the u.s doesn't have a real supply problem we just have a price problem but where one of our viewers in taipei is they have a supply problem right so they're struggling to get supply in that corner of the world and so is europe because they literally are running out of actual physical product and that too will bid the price up even more so that's a big challenge uh and that is out there uh it's not in the mainstream but it is a reality um and so we're going to have to refill those strategic reserves at some point so the second they open up the strait of hormuz well you know more fuel will be flowing uh more oil will be flowing more natural gas liquefied air but guess where it's going to also have to go aside from your gas tank it's going to have to go back into the reserves so you're going to have this continued uh bidding of uh all this uh all this supply uh that comes to to the market so they're going to be more people uh competing for the same supply right um we're going to get hopefully a little bit more supply because of what's going on with opec have videos out on that i don't want to get into it now but that said uh this is not going to go away overnight we know that there are still issues uh with uh infrastructure that have been destroyed during the fighting um and again uh getting everything back to normal is going to take some time and by the time it does get back to normal let's be conservative let's go with my friend peter and he knows a lot this guy really knows where energy is he's lived it his whole life and he's very conservative and he told me end of year at least before you start to see normal gas prices again end of year guys this guy's not making it up it is not a political thing this is a reality and we just have to recognize that so let's say peter's right and he usually is if that happens there are going to be problems that go beyond this right and we talked about with the ppi these these things they go up like rockets they come down like feathers it's a common thing we talk about in economics and so all these things think about how far all these energy prices are going to propagate through the economy the plastic the tar the everything that goes into the synthetic clothing it's unbelievable what can be impacted by the price of crude oil this stuff is going to show up beyond the end of the year assuming everything goes smooth by the end of the year and so this now has become not like a temporary thing it has become systemic right it's going to be part of the system and we remember with the last spade of inflation right it spiked up extremely fast in 2021 uh but it took a long time to get it back to normal and never actually did get back to normal so this is something that we need to watch extremely closely and this is where we're going to spend a lot of time again in the coming weeks let's hope that what we're seeing on the on the tape today that they're close to a resolution that a resolution is signed that it's acceptable and that it holds let's hope let's hope uh because it's going to take even time for that because just because uh somebody says we're okay to go that doesn't mean that the next day ships are going to start going through the strait someone's got to underwrite that insurance companies got to underwrite that how do we know that some rogue faction is not going to shoot us and launch a drone a fifty thousand dollar drone from a garage somewhere that's all it takes even if it crashes right into the water uh it doesn't have any ships suddenly ships are going to be reticent to go through and if you're an insurance company underwriting these travels well guess what well you'll underwrite it maybe but it's going to cost a heck of a lot and that's that's a diminishing margin who do you think pays for that my friends we do we do so just get that into your mindset don't you know look we want it to the quicker the resolution comes the faster we start the clock but there's still a clock and we don't even really know what that clock looks like just yet um so um so let me uh just i'm going to just end with that there um i will read you the truth bomb uh because i like to i have to read the truth bomb the straight of her moose is 21 miles wide and it's repricing everything energy food manufacturer central bank policy and it's not going back to normal on a timeline that anyone is currently pricing into the markets it is very inconvenient guys uh so that was my truth bomb on that boom let me see if there's a question here i can answer i'm sorry i ripped through that but i think we sort of played this out we really got to watch what happens uh in in the news don't trade the headlines but let's hope that we have some positive news over the next few days we'll be watching it closely and we will definitely address it in our videos if anything good comes out of this um so i have some uh two questions i see here um um two questions on this segment and then i'm going to get to the war segment um what percentage this is uh ivan uh ivan t free uh what percentage do you estimate gas prices drop if a peace deal is signed well we know uh we can sort of tie we can tie the gas prices uh directly we know roughly uh per per dollar uh ten dollars of crude oil um how much you know how much it would take to get gas prices down the question is really um you know you can see you can see a 10 or 20 percent drop uh in gas prices if we start to see a sustainable down uh downward move in crude oil but as i said earlier uh i'm assuming it's ivan um i'm i'm gonna say that it's gonna take time and it's a good chance that you know crude comes down a little bit we kind of have already seen the range of crude right how high it goes when we have a bad headline and how low it goes and we've had some better headlines than we've had today i might i might say but once it once it gets to that point again i as i said earlier it's going to take time before it goes materially lower right at this point this movement in in crude oil futures right now is based purely on speculation and purely on um and purely on um on emotion right but at the end of the day i can assure you even though it doesn't feel that way um that prices of crude oil are based on supply and demand can't get away from supply and demand and so once really the supply starts to flow then we can get our calculators and our pencils back out and we can start to figure out exactly where we think it should go you could look at the futures curve of of crude oil speculators play around in the near-term contracts but real players are out in the longer term um so you can have an idea of where but the problem is that stuff is changing a lot every single day and headlines even those folks are subject now to headlines so we have to watch it but we have seen um we have seen uh we have seen gas come down a little bit then it went back up so it will respond at some point uh another quick question uh here then i'll move on um elijah elijah um the banker a river banker uh do you think central banks need more competition for example new central banks that focus more on wages and savings instead of jobs and consumption well that kind of leads me into the next segment uh elijah uh because we're going to be talking about the central bank and um and and and how what i think the crux of your question really is is central banks um have are are really efficient at dealing with problems specifically problems that we have had in the past and so a lot of people talk about the central bank needing to be the fed in our case or the the uh european central bank you know uh the central banks around the world a lot of them are right now have the tools to deal with problems that existed in our history um problems that would exist in our history well we know um inflation is still a big problem uh then at some point in history employment became a big problem and so um central bankers have found that by manipulating the rates uh short-term interest rates that they can in some way impact uh the trajectory of the economy uh they can speed things up which is better for employment but never good for inflation right because when things speed up you get inflation um so it's that that very big balance the dual mandate um a lot of people will argue and i think this is what elijah is getting at is that you know these are blunt tools designed for things that are not today's problems right so elijah's talking about wages uh being a problem savings is a big problem uh and so what the you know the central bank can indirectly affect those things one would argue specifically savings um but the problem with wages again uh is is is a big challenge and frankly it is it is probably outside the immediate purview of a central bank again it goes back to um it goes back to um to a fiscal policy not monetary policy and so again i'm not advocating and saying that policy makers should get heavily involved in the natural economy but policy makers should be more thoughtful about solving these problems and looking at these problems because there are ways to solve these problems there are policies that would work that make sense and then there are a lot of them that don't make sense and a lot of them they affect a very small group uh not the broader group um and so again policy unfortunately on the other side in the fiscal policy area that's like tax policy and and regulations and things like that that come from the congress and at the state level um those things are pretty blunt and unfortunately they too uh tend to uh tend to play to specific unfortunately voting blocks right and so there are a lot of problems and again those problems uh are probably the purview of a politics show not a policy show um that said um let me uh jump on to the next segment really quickly um the next segment we call warsha's first test uh next tuesday uh next week uh we're gonna have the federal open market committee it's a meeting uh and they're going to decide interest rate policy and for the first time in more than three years my friends the person sitting at the head of the desk the head of the table is not jerome powell will be at the table interestingly enough it's a gentleman by the name of kevin warsh we have written wrote and made many videos about that you probably have gotten sick with watching that already um he's the 17th chair of the federal reserve he's confirmed by the senate it was a couple weeks back two or three weeks back in a 54 to 45 vote i will tell you that it was one of the if not the most divisive fed confirmations in history that is because it was it was almost all on party lines and you rarely get that believe it or not for federal reserve usually there's some consensus and there was almost none there was only one i believe dissenter um uh from the democratic side voting with republicans um and uh the first thing that he's going to walk into my friends is what we just talked about at the head of this show 4.2 cpi that's double the fed's target and 6.5 ppi which if you were paying attention to earlier should have you shuddering in your boots because that's the real number that scares me keeps me up at night and a war that is not over that's driving energy prices higher by the week and we also know energy prices are very unique because it's more than just paying for gas it's for everything that those uh that that that crude oil goes into even the transportation and so we know that is a very very big problem um and so again i said this at the head of the show that one of the big um one of the big headlines this morning which kind of got lost today in the in today's news cycle is that the ecb raised its rates for the first time in three years um and uh that's very interesting now it was kind of expected um but maybe not so no one wants to actually see a central bank of that size reverse they were just cutting a year ago they were cutting rates and now they're raising rates and and if you look at their justification for it well they talked about the war in iran they talked about energy they talked about all of these things now here's the thing that we got to pay attention to here right we have inflation we agree that it's driven by a lot of it at least is right now driven by energy it's a supply shock the problem is is the fed's tools or their one big tool interest rates cannot fix a supply shock problem so raising rates only put more pressure on people like you and me at the at the cash register and on companies who need to borrow to survive and so basically that has nothing to do with energy that's not going to make crude oil prices go down you know what's going to make crude oil prices go down so interest rates can't fix the straight of her moves problem that's that is the challenge we have here so the fed's tool raising rates because that's what but that's what central banks are supposed to do to tackle inflation and what they very well may do um that is going to do nothing more than put more pressure on us it's not going to solve the cost of of fuel right we'll just stop buying it because we won't have the money to afford it but that's not going to [01:07:26] Speaker 2: change what gas station providers are pricing it at let's talk about um more about let's talk about [01:07:46] Mark Malik: the probabilities because people have those questions what are they going to do well right now there is a almost 100 probability that the fed is going to do nothing but i did bring up earlier in the program i did talk about the fact that you know fed uh fed heads who have come in before fed chairs they have raised to to prove a point uh now i want to point out that that is all fed uh the fed chair only has one vote uh but the fed uh chair is very influential and we already know from the last couple of meetings that there are more and more folks in the fomc that do vote that are starting to believe that the fed needs to take a harder line on inflation we know that four fed officials dissented so there's dissension going on in the fed and so it would be very easy for kevin warsh uh if he believed we should be raising rates and historically he's been a hawk um despite what he said in his testimony in front of the senate um he has been a hawk and uh his policies have been very very hawkish um so uh there is not a zero percent probability that the fed raises and of course the ecb raising also has an impact on what the fed does as do the numbers that i have been just ramming down your throats today uh all of which are saying inflation inflation inflation now on the other side of the equation i'm just going to touch for a quick second uh the labor market right if the labor market were falling apart the fed would not easily be able to raise rates because they have to worry about both things both things is their dual mandate however if you've been following my videos um you know that the headline number that we got last week tells you very little about what is really actually happening in the economy with a labor market i don't want to get into it now uh watch some of those videos maybe we'll do some more of that on next week's stream but i do want to tell you that the number the non-farm payrolls number that we got last week uh is absolutely meaningless because if you break it down a big part of those numbers is from food service if you work in food service that's great for you however you would know if you worked in food service that that big spike is most likely because the world cup is being held right now in the us and so there are a lot of hires that went into that if you look down in the numbers if you go below the headline and look at the shadow numbers you will know that that number is not as good as it was and you will also know if you followed me long enough that i believe that the labor market is really struggling under the surface the headline numbers are great for politicians but they are not great for people like you and me ultimately we hope that the fed is going to look at those numbers all right they're thoughtful people we hope that they look at those numbers when they make that decision um that um also said let's talk about for a minute uh let's talk about what kevin warsh can do that may not just be rate hikes or rate cuts it's not all about that okay funny right the fed funds rate if you don't know uh is the rate that banks charge each other to borrow from each other overnight overnight okay so nobody on this call uh unless you are jamie diamond borrows at the fed funds rate and jamie himself can't borrow at the fed funds rate but his bank can okay so it's very interesting that that is the key interest rate has nothing to do with with you and me and and what we pay but obviously it has an influence on the market the point i want to make here is what the fed says and what the fed does actually in fact in fact does influence the rates that you and i pay so when the fed says that they're going to lower rates or the fed says that they're going to raise rates are they going to hold rates steady that's called forward guidance and when the fed lowers or raises their target for fed funds rate even though you and i don't borrow at that rate it affects how all the other rates react how the bond market reacts and how the bond market reacts it prices your credit card uh your credit card rates it prices your mortgage rates it does absolutely everything so it's about what the fed says and does more about they're not going out there and telling banks what they should charge for a mortgage rate they're not lending you and me money but they are saying things that make the folks that do do that stuff change what they charge you and me that said you notice i mentioned this little thing called forward guidance okay so forward guidance is a big part of what the fed does and you've seen this happen in practice i know you have when the fed comes out and says something like we're going to do everything it takes to keep the economy strong guess what happens stock markets rally they do nothing all they said they're going to do what it takes at the stock market rallies they have to just say that they want to help us out and the stock market rallies or they come around as they did a couple years back in late 2022 and say something in front of congress like i think it's prudent for us to consider uh raising rates in the future well that happened long before the fed actually raised rates they didn't raise rates until the next year however stock market went down immediately and already mortgage rates started going up the second that powell uh now just on the fed not the fed head uh said that he thinks rates should go up so forward guidance is extremely important the fed does that by talking and i talk all the time and i in all of my posts i talk about fed speakers you got to listen to what they say they're the voters you have to listen to of course what the chair says uh because he or she is very influential uh are they are they inclined to want to lower or raise rates we want to know that we don't know what wash is going to do just yet he said he thinks rates could be lower that doesn't mean he's going to lower them he was very careful in his words okay so we have to see what he actually does do but before that they will tell us what they think and they usually that's why you see the markets are more volatile after the policy usually when the fed is the fed um the fed chair is speaking in a press release and so that's why you see people watching more closely the press releases uh and that is extremely important and that i'm going to try though may not get it this time but i am going to try to get that streamed right here so we can put commentary on that if we can't get it next week we're going to get it by the next time i promise you um that uh my partners and friends who are who are supporting me here they know how to do it we just got to figure out how to do it right without getting in trouble that said that's extremely important but there was one really really important formal way that the fed tells us what they're going to do that forward guidance and it comes in their sep reports which they put out four times a year uh that is their strategic uh economic projections okay they put them out four times a year and in that they pull each one of the fomc members and they tell you where they think the economy is going to be at the end of this year and the next year the end of next year and so on maybe four years out and then forever after that god bless them and they also tell you where they think interest rates are going to be the fed funds rate and that's important because those are the people that vote so where they think the rates are going to be i think we should want to know that right and uh so they tell us that they actually tell us that and that came under i believe ben bernanke was the first fed chair to do that before bernanke um we had alan greenspan and alan greenspan was notoriously tight-lipped uh he wouldn't say anything he was straight faced you actually there was a briefcase indicator you people would try to figure out how full his briefcase was based on that what the fed might do that's all we had then under i believe bernanke uh they started being more forward uh telling people what they're going to do and the market would react and so that's that's actually a more powerful tool than even the rates themselves because i could tell you we know what rates are going to do for the most part but we what we want to hear what the fed says they might do in the future so we watch that stuff closely the separate port has also with it a notorious the notorious infamous dot plot have you heard of the dot plot well that literally just plots where all of those fed folks think that interest rates are going to be at the end of this year at the end of next year and so on and they change them every time they release one one four times a year each quarter and those dot plots are really what bond markets really will use as their forward guidance bond traders use that as forward guidance because these people are making the policy and i could show you the math exactly how people factor in how the yield curve is created based on all of that and it's math i mean there's a little speculation in there but not as much as you think so that what what those people put in that uh plot is extremely important and uh there are a lot of opponents of it uh and there are a lot of proponents of it and it turns out my friends that kevin warsh is an opponent of central banks giving forward guidance so we want to find out will kevin warsh remove the dot plot will he take away that forward guidance will he uh will he do as if he's written for many years about the fed should be more of a silent partner uh the fed should act less um and the fed should be more hawkish that is what he has written ad nauseum about for several years since he left the fed after the global financial crisis uh and now he has returned has he picked up anything since then has he softened up we don't know but this is the stuff my friends that we're going to be watching very very closely next week during the fed fed meeting not necessarily the policy but really what does warsh say what is he going to do to evolve the central bank uh as my earlier question right we want to see the central bank evolve and there are many places where we think it can evolve so it's not all negative but there will be things that uh we will learn next week in the fomc meeting um that will affect uh how the market trades uh in the near future i can tell you that for a fact i'm going to speed things up a little bit right now because we're really beyond our time here uh let's just talk about what we need to know about for next week let's talk about what you need to be watching for monday we have housing starts um look for that um that's important um and uh tuesday we get retail sales that's extremely important that's a critical test of consumer resilience we need to see is the consumer still buying that's extremely important so let's watch that on tuesday we also are going to get on tuesday the fomc rate decision um as i said earlier uh the odds are that the fed's going to do nothing um and but there's not zero odds that they're going to raise rates there are probably uh some odds that they could raise rates uh we shall see um and of course if we look at those odds and those probabilities i just want to point out because i didn't say it earlier that there is probably a greater than 50 chance based on the futures markets uh that the fed is going to raise interest rates by 25 basis points between now and the end of the year and that number is very very uh very liquid it's moving all over the place but if there are no hikes there are no cuts in there i can tell you for sure i think everyone has abandoned their cuts i think global i mean goldman sachs was the last bulge bracket bank to abandon their call for rate cuts uh they've pushed their rate cuts out to the summer of next year 2027 so there's very little chance of that that means the market's not expecting that um if the fed does cut which it probably won't you could see a violent positive reaction um if the fed cuts uh raises rates i think you would see a violent reaction negatively um if the fed does nothing you're going to see volatility if warsh talks like a walks like a dove but talks like a hawk you can see a very negative impact on the market to that earlier question um we have initial jobless claims also next week very important and those are really the things that we want to watch so we we have a lot to focus on uh right now we have the news cycle which obviously we'll be watching to see if anything changes in the straight of her moves we got good economic numbers we have our last few um important earnings that probably came out after the close that i haven't even looked at just yet but next week we still have a couple of earnings announcements not huge ones i think the big ones are are pretty much behind us um at this point um so let's talk about a stick stepping back truth bomb the market is trying to price three things at once and it's getting them all wrong at the moment it's pricing inflation as a temporary event as as temporary when every single data point this week as i said before says it's structural walk away with that remember that it is pricing the hormuz crisis as a manageable one when the iea is calling it the largest supply shock in modern history uh i know it is a little bit um uh uh extreme to say that but i hope you understand that why they say that now because it is structural and it's pricing the fed as dovish it still believes the market still kind of believes it's dovish when four of its own members are asking for higher rates and the guy stepping in to head at the table is a known hawk despite what he's saying more recently my friends that's the setup that's what the market's trying to price right now this is exactly why we do not why we do this radar report to focus on what matters before it shows up in the headlines to shine the light on the shadow data the stuff that is not convenient for the mainstream narrative my friends if you found this useful please make sure to subscribe and turn on alerts we're live every thursday at 4 30. i know we missed last week um but i i hope you came back this week we're going to come back as often as we can there's so much going on right now i want to thank you one more time uh for your subscriptions for your support it is unbelievable we are growing this community it is a very lively community we get a lot of very very serious questions and very positive questions i want to thank you once again for joining tonight and until next time guys do not trade the headlines please understand the data and remember most importantly that there is no free lunch on wall street with that i understand the data and i will wish you guys good night