Kevin Warsh *JUST* Bailed out the Stock Market HIMSELF

My goodness, I am falling asleep out here. But you know what got me more energy than a double set of monsters and a cup of coffee? It was this sound of notifications coming through about Kevin Walsh bailing this market out. Holy moly. Let me just put it this way and I think this will give a little bit of clarity on the bailout that we just got. Not from Mr. Waller now the dove that's supposed to be neutral on the race setting committee. Uh-uh. Kevin Walsh himself just bailed this market out. And you know how we can tell? I just want you to look at the November 15th. Sorry, that's September. September 15th, 2027 futures target for rate hikes uh yesterday morning after CPI. So there was before CPI. So we'll do like BCPI. Okay. We sat at about 3.17 hikes that we were pricing in. Then we got CPI. We priced in like 3.8. And this was a day before CPI. We were like 3.7 even before that. Uh and then this morning after the hot PPI, we were at like 3.35 hikes to go between now and September 15th. Right now after these washywor comments we sit at 3.024. In other words, we are seeing the odds of these more or these additional rate hikes from a hot CPI and hot PPI report fade away. I mean in fairness, PPI this morning is like, bro, this is 80% fuel, 50% gasoline. This is crazy. But what did Kevin Worshy Worshy just buy? Oh man. Oh man. Oh man. Oh man. Let's go over here to what we call the alpha wire, baby. You could actually get this for free right now in the Meet Kevin app. Uh the whole Meet Kevin app is getting rebuilt between now and the end of the year. So it's really exciting like what's there now. It's just a scratch of uh what it's going to be. It's kind of cool. But take a look at this. Breaking Worsh. This is uh because he had he just gave a speech in uh in Taiwan, I believe it was. But anyway, I I want to go to bed. Be up early tomorrow. But here we go. Kevin Worsh, Fed task forces are charged with creating new intellectual capital to aid the FOMC. Now, this is interesting because remember Worsh talked about, oh, uh, we're going to have information from the task forces out at the end of the year. Well, that kind of implies like December that kind of implies that he'd be willing to wait for the information from those task forces. And then, of course, just because you get the information from the task forces doesn't mean you could instantly implement it. We might be one and done this year, boys and girls. I think that's what Kevin Walsh is saying here is, hey, we need to wait for the task forces. Let's take a look at some of the other things he's saying. The Fed will have a field hearing on artificial intelligence in San Francisco. AI will make the economy more productive. There will be more wealth, but the path there will be a bumpy one. AI will change the real economy, but the near-term impact on employment is uncertain. Ah, now that's a very important line right there because if you have a Kevin Worshy Worsh that says, "Hey, hey, uh, you know, we we got to be careful here, there are potential tailside risks, then if we go too far, if we hike too fast to control inflation expectations that are already controlled, then we could crush the labor market." What did we get the last few days? Remember in the CPI report, worker pricing power down. What do we get on retail sales uh control group this morning? Consumer retail sales x energy and gas missed expectations in that control group. That's just another example where ah crap, wait a second, what what is like are we starting to roll over on the labor market? Because once the labor market rolls over, it'll take about a year for people to start realizing, ah crap, like the unemployment rates going up, you know, it was 42, then it's 43, then it's 44, then it's 46, then it's 48. You know, nobody's going to care if it's 44, 45, 46, 47, 48. Even when it gets to 5%, then people are going to go, "Oh man, this is this is really started to go up again. This isn't good." You know, all of that that takes time. that could take a, you know, 12-month period of time for people to actually see that year-over-year change. And so, I think what Kevin Worsh is doing is by saying, look, you know, we've got to be really cautious of these tail risks is why are we going to go super duper aggressive right now on artificial intelligence if inflation break evens are stable? And that's exactly what we're seeing right now. We've got inflation break evens that are substantially down from where we were at the beginning of the year. Not only are we down substantially from the uh beginning of the year, we're also down substantially from when Mr. Worshy Worsh did his uh hikey wy here. I I'll read you the numbers here. So, at the beginning of the year, we spiked all the way up to about 2.56 on the 5-year break even. Uh literally the turn of the year. So, January 1st was closer to where we are now. That's actually at about 2.3. We sit about 2.35 right now. And so within two weeks of the beginning of the year uh two to four weeks we're about 25. Then when the war was going on we were sitting at 27 inflation break even. Right before the Fed meeting we got up to 25. They hiked right back down to 2.35. So sitting around 2.3 on inflation break evens. This is not necessarily a reason to hike again here in October despite the hot data that we've get been getting. I just pulled it up again. And so I think he's recognizing, ah crap, you know, if we go too fast here and we don't give time for either Donald Trump to make a deal, which he's probably on the phone with Trump and Trump's like, "Dude, I'm going to make a deal. Like, just wait. Just wait, man. Like, it's all going to be okay." Uh, I wouldn't it wouldn't I would not put it past Donald Trump to be doing that to give Kevin Walsh this heads up that, "Hey, uh, you know, just can can you guys skip October and then I promise I'll have a deal for you." And you know what's going to happen when we have a deal? you know, rates were going to plummet, right? Of course, that's what's anticipated. Uh, now I want to show you what else was said, but I also want you to see this because I think it's really incredible. This morning on our alpha report, we mentioned that you should buy the dip if we end up bouncing at $715. Look at that, folks. On this chart, we got down to 71585. If you actually look at the minute-by-minute chart, we got down to $7543. Then we bounced. When we started bouncing over here, we set a buy alert. We set an alert. We said, "Listen, we are a buy." We told everybody we were going to do it. Then we set the alert saying we're doing it. So, we gave everybody in the alpha report a heads up of what our strategy was going to be. We said it in the course member live stream and the alpha report. Then, we actually put six figures on it. Like if we say we're gonna do something, we like to say our word is as good as gold. And so if you want to be part of that, join us over at reinvest one.com. Remember, you pay once. You get lifetime access to everything. The alpha report, the uh the portfolio transparency, the private live streams, all nine courses, the agentic blueprints, the research terminal, uh the stocks terminal, the homes terminal, you name it. Go to mekevin.com and check it out. But anyway, let's continue here. So there are negative tail risks and the Fed needs to think about financial stability risks. Think about what just happened today. I mean it's entirely possible that somebody went bankrupt today uh on on getting liquidated this morning that potentially one of the reasons we saw this collapse in the cues here was because somebody got liquidated and there are rumors circulating about you know how a small hedge fund much like Leopold could have gone bankrupt. I joked on Twitter which you can follow me there at realme Kevin onx. Uh, I joked that, uh, hey guys, it sounds like we're about to meet the great Leopold the second, except I pronounced it the great Leo Fold II. Anyway, that's just me being, you know, meet Kevin. But anyway, uh, the Fed needs to think about financial stability risk. That this does not sound like a guy who's like, dude, we are way behind on inflation. We need to hike more. This this sounds like a guy who's very, very cautious about potentially going too dang far. So let's take a look at the rest that we have here. So his speech right here, Kevin Walsh will make judgments about October and and December at those meetings. Right now we have structural growth, an investment surge. Remember, the Fed can't do anything about an investment surge. This is just another way of saying, "Hey, there's nothing we can do about that right now." He's trying to talk down inflation expectations. It's exactly what he's doing. Oh, there we go. I've got the computer to where I could actually pop it open right now. Sorry, I was a little preoccupied there for a hot little minute. Uh here we go. Look at that. Look at those inflation break evens. Look how stable that is. And I want you to see the beginning of the year. So January was really this surge right here. And then of course we went to the war. Uh then when we had a ceasefire, things fell. This right here, that peak, that's when wars got forced to hike. We don't have that peak anymore. And as long as we don't have that peak, I actually think the odds are you might not see a hike at all this year. And Williams has already hinted that we might not see a hike at all in 2027. And think about how bullish that's going to end up being for the economy, the market broadly. Oh my gosh, it's going to be euphoric. But anyway, we'll be meeting a couple more times this year. Those will be crystallizing moments, crystallizing what's happening to output, employment, inflation. Look at that. He's clearly signaling we are now putting employment first because we are worried that AI is going to crush jobs. People don't believe me when I say this, but all you have to do is study history. And frankly, when I say study history today for a lot of people, and there's nothing wrong with I mean just ask your AI, okay? But usually employment from a new innovation uh comes in a U-shape. This is actually very problematic, but it's quite important for you to understand. unemployment. Uh so you get a new innovation, right? So uh you get some kind of new innovation moment, the steam engine, whatever. Uh initially people adopt it out of experimentation and curiosity. Is this actually going to make money? Can this really replace jobs? Once people get to the oh my gosh yes this can replace jobs which we're just now getting to with AI dude coding you know that was that was earlier this year you know now you need to be like an AI engineer who can actually infrastructure build anyway just coding in general it's almost not even happening anymore for coders uh video editing AI is doing it emails AI is doing it web design AI is it's scary but anyway uh then people adopt it you You can actually see some hiring where it's like, "Oh, we need some steam engine engineers or whatever, AI engineers, whatever." And then people adopt it and they're like, "Oh my gosh, we can actually cut so many damn jobs." And then you have this like extended U. I probably dropped that too soon over here, but you tend to have this extended U where so you initially get a ramp of hiring. That's kind of where we are now. Then you get this extended U usually which is recessionary because the new innovation is deflationary and a lot of people get laid off. You know maybe this is kind of where the break even employment rate is and eventually you create new jobs and you'll net create more jobs than we had before. Like this will be way higher than this. We'll have more productivity, more prosperity, everything will be better there. But you might have to go through a period of hell first. Uh, and that's one of the reasons I've been so anal about stressing like look, I'm bullish that we're going to have another euphoric run. There's time left in this party. We're buying the dip. But I'm also of the mindset that like, pay down your debt. You know, even people that have like 2.9% mortgages or 4% mortgages, I'm like, no, man. Pay down your debt. You know, it's just not worth it right now. Like I I I don't I don't want debt. I also don't want to be a lender right now. In fairness, we did just actually reinvest like just two days ago. got an email from the Department of Real Estate and they're like, "We're planning to approve you to be a lender in November of 2026." And I'm like, "Ah, that's cool." Like, I'm just going to hang that on the shelf. Like, we'll put that on the tool belt because kind of what I think is the time to really get into lending. Okay, this is between you and me. Don't don't tell anybody the strategy because this is our strategy to make some money, you know, if poop hits the fan. Okay, but between you and me, when we're in hell, rates are going to go to zero. And you know what's going to do really damn well in that business? # no guarantees. This is not a promise. Lending. You got to get your ducks in a row. Before, you know, people were like, "Oh, you got lucky." Isn't luck when preparation meets opportunity? Man, that was corny. turning into the old dad. Ah, Fed War says, "Since September's FOMC, the world has broadly conformed to our expectations." See, yes, it's right here. Their expectations. Yes, that's right. And that was since the September meeting. In other words, hey, since the September meeting, we have conformed to his expectations. He literally bluntly just bailed out the markets and bluntly told you that is my expectation. He just told us this. This is it's like it's right there. Uh okay, that's great. That's fantastic news. Okay, that was the Treasury official before him. Investment surge is the most important thing happening in the economy right now. AI is going to hit the demand side of the economy before the supply shock. That's inflationary. Don't believe in saying what I might do in meetings for the rest of 2026. Don't prejudice meetings. AI will help central banks have confidence in data. Their task forces are going to give them confidence in maybe a lower inflation rate that they just sort of pull out of their butt. AI will change the real economy, but in the near term, the impact on employment is uncertain. Okay, there's your risk. That's your tail risk. That is the red flag. Okay. Task forces. The US is investing through private sector in new technologies. The Fed does not try to figure out who is right or wrong. The Fed needs to think about financial stability. There are negative tailside risks that policymakers can do something about. In other words, don't destroy the labor market. It is already weak enough. Like, yes, it is positive, but it's it's still weak. 75% of Fed staff does not work on monetary policy. We got to work on culture. We're not going to give you a hint about the October meeting. He gave plenty of hints. Okay. Fed chair needs to be uh the head of all parts of the Federal Reserve. Institutional credibility is really important. He already told you the expectations are aligning with what they wanted. I'm not in the legacy business. I'm trying to get policy right. I'm proud that Vulkar, Greenspan, and Bernani left the Fed with more institutional credibility. Oh, he just left OUT POWELL. OH, that is a slight on Powell. I mean, he's been dunking on Powell for a while in credibility. So, but I mean, that's pretty damn blunt. You literally purposely left Powell out of that list, dude. Those meetings got to be awkward. Wow. You know what we ought to do is we ought to check out what the odds are right now of one hiker. Yes. So, uh, I've I've talked about this before pretty pretty bluntly on the channel, but I believe that, uh, there is a real potential we only end up getting one rate hike, uh, from the Federal Reserve, and I think those odds just went up, or at least they should, uh, following this. So, what we want to look at is we want to go to here. Uh, Fed maintains for October. That's fine. And what we need is Kalshi um rate hikes this year. Okay, that's the one we need. We hop in over here and exactly one right here, 16%. Ah, that one's looking juicy after this, especially with this alignment on expectations. Dude, that payout could be nice. I like I'm probably gonna buy this or more of this even. Uh because I don't even need to ride this to the end. I just need to ride that through an Iran deal. So like I've previously owned this. I've gone in and out of this one, but I want to buy more like right now because if I go to this expectation sheet, he told us since the meeting, the world has aligned with their expectations. I mean, these are he's the guy who's dropping us hints. It's like the hikes comment that he had at Jackson Hole, right? I don't know, man. That's juicy. I mean, no guarantees, okay? like, you know, not like, oh yeah, this is financial advice or whatever. But, uh, if you do want to make bets, remember, you could always, uh, head on over to Kshi on what you think is going to happen with the Fed hikes. Uh, with call prediction markets, we don't like to say the betting markets, but anyway, if uh, you sign up for Koshi and you make your first trade, you get a free $25 if you use this code, kshi.com/r/meet. You can also scan the QR code. They are a paid sponsor of the channel. You could use code meet Kevin when you sign up. But honestly, I'm just going to go in there and buy some more on this right now because the more I read this and I don't know it it could be delusional, right? But I again I don't need to hold this to maturity. I just need to flip out of this on like a double. So I'm going to go into the exactly one. Yes. I don't know, put in like a few hundred bucks and uh just go order my fill. Okay. Yeah, this is this is their their limits. You put in 200 bucks. Okay. Yeah. Yeah. Yeah. 500 bucks. I don't know. Somewhere around there. So, I'll you know, I'll put in we'll put in another 200 bucks over here. There we go. All right. Cool. So, um I'm pretty excited about it. We we'll see where it goes, but you know, I'm I'm jumping up and down a little bit on the inside that these hints from the Fed were a pretty clear bailout move and they kind of doubled down on Waller's point of view of like, oh yeah, you know, we uh we're uh we're we're doing good. Expectations are stable. So anyway, nice little evening talk. Join us for the Alpha Report tomorrow morning. That's only in like 6 hours. uh at uh meet kevin.com or reinvest.com, whatever you want to go to. Links in the description as well. We'll see you all there. Thanks so much. Goodbye and good luck. >> If you like that video, check this one out. I think you're going to love it. >> Why not advertise these things that you told us here? I feel like nobody else knows about this. >> We'll we'll try a little advertising and see how it goes. >> Congratulations, man. You have done so much. People love you. People look up to you. >> Kevin Pra there, financial analyst and YouTuber. Meet Kevin. Always great to get your take.