GOLDMAN SACHS JUST DROPPED A BOMBSHELL FOR THE MARKET!

what's going on guys welcome back to another video we had an absolutely crazy day in the markets today we had CPI data this morning the rate cut expectations are flying around we had really interesting comments from the CEO of Goldman Sachs we have something very interesting happening with these rate cut expectations as well that I want all of you guys to understand we have more big pieces of data tomorrow and that could lead to even more volatility uh than what we saw today there's a lot of interesting chart setups too so again I mean I put the screenshot up right here for you or this way over here for you guys shout out to Matt in the Discord over there making all of those gains using those funded accounts to his Advantage again guys we have all the day trading education swing trading the macro research reports uh the private live streams that are starting next week the pre-market plans the watch list of stocks cryptos and FX pairs that are about to explode before they do there is a boatload in there for you guys if you guys are interested make sure you guys check out that link down below two weeks free but let's get into it team if you guys wouldn't mind hitting that like button down below helps out a whole lot getting these uh videos out to as many people who actually want to learn the first thing that I want to cover with you guys is what happened uh with CPI today so year-over-year CPI the headline number uh did decrease from that 2.9% number prior uh in the expectations for this time around were about 2.6% we came in at 2.5 that's decent news right there the only thing that came in higher than expectations was month over Monon core CPI uh coming in at. 3% when the median forecast was 0.2 uh headline was 0.2 versus 0.2 estimate core year-over-year was 3.2% uh versus the 3.2% estimate now remember in yesterday's video what we were talking about what could be driving up some of these different elements of inflation here uh specifically core versus headline well this is exactly what we were expecting to see uh August CPI inflation appears to be consistent with slightly below uh slightly below Target reading on the feds preferred gauge the pce capital economics Paul ashor says in a note monthly CPI was 0 2% which points to a 0.15% monthly increase on the pce again remember pce is the fed's preferred metric of inflation here guys August pce will will be released later this month but this is the most important part here he adds that the 3.2% annual core CPI was due mostly to a 5.2% increase in shelter prices shelter and energy have been the two components of CPI uh that have been really holding these numbers up if we start to see shelter starting to move to the downside which honestly is possible when we start to cut rates because again the volumes of real estate transactions right now are not really that high as rates start to come down people might start to uh transact more in the real estate market and that could actually end up bringing home prices down remember real estate is a very E-liquid market so when more volume's going to come in you're going to get a little a little bit more of an accurate representation of what is going on with the actual true prices and values of those properties and what people are willing to pay now when we come over here and look at the bond market what are we seeing well initially kind of in the uh the last night's trading session when the debate was happening we did see bonds moving to the upside now I know a lot of you guys have been talking about TLT and we've talked about this as well I'm still not sold on movement to the upside in TLT right now I know the chart looks good I it just seems like too kind of an obvious of a trade uh for me to want to take um most of the bond trades that we've had this year and we've been spot on with a lot of these uh these trades based on the macro narrative in the bond market uh have been based on the pendulum swinging way back and forth so remember when we came into the year when we had uh the market pricing in about 6 to8 rate Cuts throughout 2024 uh well that obviously was a little bit too much we saw uh couple of hot readings in CPI and those expectations started to move back down we saw a very similar thing happen down in here and I kind of Ed uh this one individual as the point of capitulation uh when that Wharton Professor came out and said uh we need an emergency uh 75 basis point rate cut uh that was kind of my sign to buy there when the pendulum swinging back and forth um right now though with the way that the market has priced in meaning what are they expecting to see uh out of the federal funds rate rate over the next let's say even quarter a year they've priced in pretty much all that we could potentially see uh out of the Fed so I would not necessarily expect them to front run that even more uh I could be wrong but that's kind of my overarching assumption uh right now now looking at USD JPY again again you have to keep taking a look at this uh due to the fact that the carry trade still has not been Unwound no matter what these large banking institutions want to tell you um when we look at this chart here we did Flash down below what I like to deem the danger zone uh in USD JP uh USD JPY over here if we end up trading down through basically 140 here I think that's going to be the point at which uh it's going to sparkk a new unwind of this carry trade uh that we saw uh kind of in July and into August there and kind of a slow down just basically again we went over this uh in one of the videos earlier on this week uh the the Japanese GDP data the statements from U he's kind of jawboning but kind of backing off some of his statements there effectively saying that they're not going to be raising rates again this year now actually fun fact uh the next time that the bank of Japan is going to be making an interest rate decision uh that's on Halloween so be ready for that um so let's get into some of these statements from Goldman Sachs here why this is important um and what it's actually doing to some of these overarching rate cut expectations that I think everybody should be paying attention to and we talked about this uh on Twitter last night so let's look through a couple of these statements Goldman Sachs CEO Solomon says economy is still in pretty good shape uh says likely scenario is we navigate a soft Landing that's really the most important statement here that we're going to cover as well uh he sees maybe two to three rate Cuts as he moves into the fall says best guess is 25 basis point uh rate cut for the September meeting but he thinks that there's a case to be made for 50 says we've made real progress on inflation we have uh and he says I see them cutting by 5050 basis points given softening so the Goldman Sachs CEO right now is coming out and saying that he thinks that we're going to be navigating a soft Landing now I want to bring you guys over to this fed watch tool right here uh and go through exactly what this is telling us so right now the target rate for the federal funds rate right now so at the current time it's 525 to 550 basis points which again I mean we don't have to use the fancy Finance words basis points 5.25 to 5.5% um the overwhelming expectation from the market right now especially after the CPI data uh is going to be that we're going to be getting a 25 basis point rate cut uh next week at that September meeting so it went from 66% probability yesterday to 87% probability today now what's interesting about this is that the market is still pricing in between uh 100 and 125 basis points of cuts by the end of the year what does this mean it means that the market thinks that we are going to get at least 150 basis point rate cut now in order for us to get a 50 basis point almost jumbo rate cut um so that would be the the case in which we were going to cut by uh 100 basis points by the end of the year so 255025 or 25 2550 or 25 25 but that's the least likely scenario okay and in the other case we have a 31% uh probability if let's say uh we're going to get this 25 basis point cut uh next week there we go 25 5050 now that's interesting to me if if the overwhelming expectation and again the CEO of Goldman Sachs saying that he is expecting a soft Landing why would we have to go from 25 basis points all the way up to 250 basis points Cuts in a row or at least at least even one 50 basis point cut you got to think about what a 50 basis point cut actually means for the market it means that economic conditions would have deteriorated even more so we would have to see and this is kind of what the Market's telling us here that they almost expect growth to slow unemployment to go up and inflation to continue lower at a pretty aggressive Pace into the end of the year so what they're effectively telling us here in these probability metrics is that they actually don't expect a soft Landing to happen because if you were to go and just say all right we're going to slowly back off uh from where we are right now do a series of 25 basis point cuts at each of the next meetings I mean that could easily accomplish that soft Landing as you're easing your way down now what a lot of people are also thinking about right now and what everybody should be thinking about is the Fed is going to bring us to what they call a neutral rate remember uh what a lot of the statements from the FED have been uh have been about whether or not policy is sufficiently restrictive which obviously we are right now we had a giant uh move up in the federal funds rate up to the level that we are right now what a lot of people could be expecting in somewhat the bond market right now due to uh those expectations coming in of all of these rate cuts that are getting priced in again we could go even into December of 2025 I mean right in here you look at this like a bell curve they think that we're going to go from basically 5.25% on the federal funds rate to what 2.5% uh or let's see right here 2.75% uh right that that's a very very significant drop uh in the federal funds right there now is that the neutral rate meaning that the FED is not necessarily involved uh with trying to steer growth unemployment and inflation in any specific Direction and they're effectively going to let a lot of these market conditions play out out what we have to think about is what is that rate actually going to be and that's going to be the new narrative that's going to start showing up over the next couple of months after we start cutting rates because once we start seeing rates coming down everybody's going to be paying really really close attention to the data CPI the jobs reports uh GDP numbers unemployment things like that because if the FED starts backing off and inflation stops going down well that's going to be a problem now again the FED wants to accomplish that 2% uh long run rate of inflation there so what's probably going to happen this is my overwhelming expectation right now is that we're going to see the First Rate cut probably 25 basis points and nothing's really going to change remember a lot of these different policy measures uh and moves by the FED are going to take some time to play out remember the FED started hiking rates and I believe it was March of 22 uh and it took a while for in for us to make very very significant progress on inflation these moves by the FED are not instant and you don't want them to be instant because markets will be even more volatile than they already are but what people are going to start looking towards is how are these incremental differences uh in the federal funds rate actually affecting uh growth uh unemployment and inflation that is really important but what the Market's kind of expecting here is that hard Landing I mean we we'll kind of wait and see if these probabilities are going to move uh in into the end of the year here but when you see a statement from uh the Goldman Sachs CEO that says a soft Landing is the most likely scenario then why are all of these rate cut expectations going into the end of the year still so high now think about it like this if and this is kind of bringing us back to TLT here before I wrap it up for you guys this evening so if the Soft Landing is accomplished and we start to still see the data moving in the right direction after a 25 basis point cut we're probably going to do another one not 50 so then what happens to yields in the bond market bonds probably come down a little bit and yields probably trade to the upside so that's kind of what I'm looking at here and that's what I want everybody to be focused in on especially going into the end of the week here uh but yeah that's really it guys if you guys did enjoy the information and Analysis I provided for you guys in this video here if you guys wouldn't mind going down hitting that like button subscribe if you want more videos like this and remember that twoe free trial to the Discord is ending soon I'll see you guys in there this evening I'll see you on the premarket live stream tomorrow peace