What does the federal government love doing? Spending our money… all over the world… decades into the future while lining their cronies’ pockets…
Federal Reserve Chair Jerome Powell has been talking to congress this week, and I called what he was going to say… He was going to come in hawkish and play tough guy.
Then Tuesday, he did exactly that. And then what came next, I also called…
He became a whipping boy for the grandstanding members of Congress, who told him he can’t send this economy off a cliff by continuing to raise interest rates.
You see, there’s something super important about the Fed raising rates.
When it does that, it makes paying back all of our debt that much more expensive. About three years ago, it cost the U.S. about $250 billion a year to pay down interest on its own Treasurys around the world.
Now it costs about a trillion dollars… a year.
So the more he hikes rates, the more difficult it makes the gig for these politicians. So there’s a lot of political pressure, inflation is also a pressure…
And energy is ground zero for these inflation pressures — more on this in a bit.
Back to Powell and rates… I posted a video on Telegram — join my channel here for free updates, analysis, trade alerts and more! — on Tuesday explaining why everyone is focusing on the wrong thing, the terminal rate. We shouldn’t be worried about where he’s going to stop hiking.
Because here’s the thing… It’s never going to end, so stop trying to figure out the terminal rate. That doesn’t matter. What we need to figure out is…
Are we at the beginning of a down move? The end of a down move? Where am I in the range of what a stock’s doing, what the market’s doing? What’s my exposure? What’s my risk?
That’s what we need to focus on because when it comes down to it, Jay Powell is just winging it. He has no idea what he’s doing — he’s the Crony in Chief.
So stop trying to figure out terminal rates and focus on what we can control, like how much risk we’re taking on, and where opportunities exist — and fighting with both hands, long and short.
The reason I’m breaking this whole narrative down for you is because the global energy crisis I mentioned above is the exact reason why Powell is stuck between a rock and a hard place.
And I just gave a presentation this week about how billionaire investors stand to benefit BIG from the 2023 energy crisis — I even gave away my No. 1 energy play that’s been on fire for free.
So check out my presentation here, and let’s discuss opportunities. I started sounding this alarm a while back, it’s already paid off well, and I expect this trend to continue.
I’ve been tweeting a lot more… charts, news reaction and general trading information, so be sure and give me a follow on Twitter @jeffzan.
You can also join my free Telegram channel, where I share market insights in real time throughout the week, articles, videos and more!
*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
