In today's episode, Kip takes us through the key takeaways from the latest Federal Reserve meeting. He discusses Jay Powell's statements, including a surprising turn on tariffs and inflation expectations for the coming years. Kip provides a deep dive into the market's reaction, highlighting the rally in equities and the performance of commodities like gold, silver, and bitcoin.

Don’t look back. The market is closed. Good Wednesday afternoon, everyone. Kip Herriage here with the today’s daily VRA investing podcast. Hope you had a good day today. Big day today. Fed meeting today. Normally this would be Tyler’s day to do podcast.

He’s our resident Fed expert, so I’ll stand in for him on this. But I’m going to start this with, by the way, very, very good meeting. I don’t know that Powell could have done a lot better. They didn’t talk about restarting the rate cutting program, but their next meeting’s not until May 7th. It’s a lot of time between now and then. And also with the commitment they’ve made to being worried about Trump’s tariffs, it’s kind of hard to talk about rate cuts now. But, but it’s what he said about halfway through his press conference that really stoked the markets and got them going. And I’ll come back to that in just a moment.

[00:00:49]:
But it was a good day for equities, good day for gold. Another all time high bit. Bitcoin up now 4.3%. 85,584. This is a risk on day, risk on. Okay. This is a day to buy stocks. That’s, that’s the message that Jay Powell sent today.

I want to read to you. I quote, I don’t watch CNBC anymore. Have more CNBC from the pandemic days when they just, it was 247 propaganda. Just cannot go back and watch that, that network anymore. Also, Jim Cramer’s on it, so there are a few reasons, but I like Bloomberg and today Mike McKee, who I like a lot, he’s their, their chief economist, if you will, for Bloomberg. If you watch Bloomberg, you probably know who Mike McKee is. This is what Mike McKee said after J. Pal’s presser.

You can’t take this Fed seriously. Anything J. Pal said after hello should be discounted. That’s what Mike McKee said. Now, I don’t think he was taking a direct shot at Jay Powell saying that he’s the worst bitch here in our times, as we’ve said, as he is. But McKee’s certainly making a point. McKee and Jay Powell have had their run ins before and they’ve done it on live tv. So there is some history here.

[00:02:05]:
But I think what McKee was saying, instead of being catty or taking a direct shot at Powell, what he’s saying was the Fed has no idea because how could you know? We don’t even know what the Trump tariff policy is going to be. And that’s really, I think, the key point here. The Fed doesn’t know to a certain degree everyone is flying blind. Which is why when they make these revisions to their Fed policy, it really is laughable. They should just say we don’t know and we’re going to keep existing policy in place. We’ll have a next meeting when we have our meeting. Of course, they have to do these every month essentially because it’s all about the Fed now, right? Our financial masters of the universe. But here’s, here’s what, here’s what the market got going.

Jay Powell said this again, this was just over halfway through that our base case is that any inflation will be short lived. And then he said, yes, transitory. Now, if you remember the pandemic, you remember the disaster of a job the Federal Reserve under Jay Powell did during the pandemic when he went from one month saying there is no inflation. Remember, this is inflation was ramping up and getting ready to go to, what was it, 41 year highs. Okay? One month he said there is no inflation. The very next month they said it’s transitory. There’s that word again. And then of course, after the next month, it was inflation off to the races, right? Because the money printing, because inflation is only and never one thing and that is money printing.

But when Jay Powell said our base case is that inflation will only be a 2025 story and then 25, 26 and 27 by 27 will be down to 2% or lower inflation. That’s when the markets took off. And that is such a key point because what he’s saying is this, even in the worst case scenario, based on our review of Trump’s tariff policy and even depending on reciprocal tariffs, other countries might do to us. Even in that scenario, their base case is that this is only a 2025 story, folks. The markets look through that. And that’s what stocks did today when Powell said that. Because that is not something that the markets had really thought about. Certainly we’ve not heard this talked about a lot that any inflationary concerns would, would be really short lived.

[00:04:31]:
And I think Scott Besson’s done his job here. This is kind of the challenge we put out there for Scott Besson. Because when Janet Yellen was Treasury secretary under Biden, what she did very well is because they’re on the same team, of course, what she did very well was communicate with Jay Powell. So you didn’t have these public battles, public spats. They were on the same side. They echoed each other’s comments. And that continuity, the market’s like that. The markets like predictability, continuity.

The last thing the market wants is surprises. And hence, you know, it should be no surprise that what the markets have done is go lower because of Trump’s very scattershot Trump tariff policies. Okay? But today I think that what happened here is Scott Bessant, who’s got a great history of working with the Federal Reserve. This is one of the big reasons that Trump selected Scott Besson as Treasury Secretary is because his relationship with the money men, okay? Because that’s. That’s what. What Scott Bessett is. He is a Wall street guy, a Wall street insider through and through, which means you’re a Federal Reserve guy through and through. It’s all the money cartel, banking cartel, money cartel, Wall street cartel, all under the same roof.

I think what happened here, my read of this, and we’ve been talking about this. So I think this is what happened. I believe that J. Scott Bessant did what he’s supposed to do. He’s the middleman between Trump and Jay Powell. Because we know what happens when Trump and Jay Powell communicate directly. It’s ugly. We saw it in 2018.

[00:06:07]:
Trump was essentially daily putting out tweets and truth. I don’t know. Truth. Social was around then. He wasn’t. But he’s putting out tweets daily, saying in public, pressers daily, how horrible Jay Powell is and that they have to cut, cut, cut. They shouldn’t be raising rates. This is a public message from Trump.

If you don’t think about the Fed and Jay Powell, they don’t respond to public pressure. Again, this is the largest and most powerful cartel on the planet, the money and banking cartel, more powerful than military cartel, more powerful than anything else. And it’s the one group you really don’t want to mess with. And Trump learned that lesson. I believe he learned that lesson. And we see that because Trump has been very soft and pretty much silent when it comes to talking about Fed policy and Jay Powell. Let’s hope that continues. Because the last thing we want Trump to do is pick another public battle with Jay Powell, especially after this presser today, because I believe that Scott Bessant and Jay Powell have a relationship.

I believe they have a good relationship. And now there’s a lot of communication here where Besson’s in the middle and Trump is on one side, Powell’s on the other, and they never, ever should meet or talk, ever, ever, ever. Because only bad happen to the markets. When that happens, I thought today, and I thought especially again the line that where Jay Powell said any inflation from tariffs will be short lived. Yes, transitory. Again, that word. Okay, we really don’t want to hear him say that word because last time it certainly wasn’t transitory. But that’s when the market started taking off.

[00:07:45]:
And that really for me is the takeaway from this presser today. And again, we encourage President Trump, please don’t start this fight again. Let Scott Besett fight your battles for you. Today was a successful presser. Now, again, just completing my thoughts here on the presser today and the FOMC statement. It was essentially as expected, going to get two rate cuts. Again, this is their base case. This is a dot plot.

Two rate cuts this year. They did lower the GDP estimate this year from 2.1% to 1.7%. Why they did that, who knows? They don’t know. But it’s like, it’s like Mike McKee of Bloomberg said, they don’t know. Why are they saying it? Why are they changing policy when they have no clue? Because they don’t. And they also lower GDP next year from 2% or 2.6%, 2% to 1.8%. Again, these are essentially meaningless guesses. And that’s what they are.

They’re absolute guesses from Powell and the Fed. And all they do is hurt their credibility when they do this because they even he keeps, you know, during the press where he kept saying, I, we don’t know. We just don’t. I can’t answer that. We just don’t know. No shit. So stop, stop putting out these dot plots that do not matter because I also believe this. And we’ve been, we’ve owned a record on this very confidently.

[00:09:05]:
We said it’s a high confidence call. Trust me when I tell you GDP growth this year is going to be higher than the Fed’s estimate of 1.7%. Our estimate is within 12 to 18 months of Trump’s inauguration. So either by the end of, say that by the end of next, by the end of next January to 12 months after, to six months after that, we expect US GDP growth to be at better than 5%. Because if you think a Trump economic miracle, which is what we had in his first term, again before the pandemic, before his battle with Jay Powell, this economy was rocking and rolling. Tax cuts, deregulation, and yes, tariffs. That’s exactly the model that Trump used in his first term. And the economy was on fire, Okay? I mean, it’s the strongest economy the US has ever had.

And so if you think for a second that Trump’s going to go back to a very similar policy again, tax cuts, deregulation and tariffs, very similar policy, maybe a little more aggressive on tariffs. We don’t know that yet, do we? I actually happen to think, and I wrote this morning, Tyler and I agree on this, that we’re going to see a pivot from Trump on tariffs. And it’s probably going to come, almost certainly will come before the April 2 deadline. There’ll be some kind of face saving deal. You know, countries will announce that they’ve negotiated with Trump, the tariffs on April 2 won’t go into place. You can already hear the language. Can’t you always hear Trump saying, look, look at Canada and Mexico, they’ve cleaned up their fentanyl problem. Look at our border crossing, we don’t have an open border anymore.

And these are, again, these were cornerstones of what Trump needed to see from Mexico and Canada and China, certainly when it comes to fentanyl before he would decide not to put the tariffs in place. So I think it pivots coming from Trump. I’ll be very surprised if there’s not. Tyler agrees with this. And the primary reason is because why wouldn’t he? You know, honestly, nothing else makes sense because in the background, Trump can keep doing whatever he wants to on tariffs. Those are private meeting conversations. The public doesn’t need to know about all this. Right? Again, the markets hate confusion.

[00:11:24]:
The markets hate public battles. We don’t need to know that. President Trump, get the economy back. Just do what you did in the first term, man. Cut taxes, use deregulation. Just let animal spirits come roaring back. Let the wealth effect do what it does, which is make people optimistic and spend more money, hire more employees. Right? That’s what you do.

That’s how you do this. And then very behind the scenes, fight your tariff battles. Right? Go for it. Go for the jugular behind the scenes. And I, I think that’s the pivot’s coming. And the reason I think that is because nothing else makes sense. Why would Trump do it in any other way than this way? So I think that’s what we’re seeing here. Look, we have a market that’s extreme oversold.

We, we needed a rally anyway. We’re at levels above a soul that are just extreme fear on steroids. Okay? We’re still in extreme fear. On the fear and greed index, we’ve had Back to back AI investor sentiment surveys with 40 point differences between bulls and bears. Okay? I mean, you have to. You have to go back a long way and look at crashes and the pandemic right before you see anything as bad as what we’ve seen here. We also learned yesterday, Tyler covered yesterday in the bank of America Global fund manager survey record levels of selling of US Equity by fund managers and buying European equities. With Trump as president, none of that needs to happen.

[00:12:49]:
And that’s why, again, it makes no sense whatsoever for Trump to take any other tactics than what we just been laying out for a year. And I think that’s the path to least resistance is the path that makes the most smart money sense. And Trump can say all he wants to, that he doesn’t watch the market. He’s not watching the markets. Right. And Scott Bessing can say all he wants to. He’s not concerned about a little market volatility. Went to correct hardcore correction in three weeks.

That ain’t a little bit of volatility. Trust me. Everybody we talk to is looking at the 401k. Everybody we talk to is worried about these markets. These guys. I’m sorry, but you’re not being honest, guys, because no one’s buying what you’re selling. You watch Trump and Betsy watch the market probably closer than I do, and I rarely leave my screen. So they certainly understand the world of economics better than I ever will and the interconnectedness of various asset classes and tariff policies, et cetera.

I mean, this is their stuff. But what they, what they can’t ever tell us again without being laughed at in their face is they aren’t watching the markets and that volatility doesn’t matter. So this is the path of least resistance. It’s the one that makes. It’s a strategy makes the most sense. I believe Trump is. I believe he’s got a big game plan here, and I think it involves a pivot. I think we’re going to see a deal reached on terrorists, at least some.

[00:14:11]:
Some kind of a deal that allows the markets to get back to doing what they want to do, which is go higher. You know, U.S. economy and the markets want to go higher. The fact that the Fed lowered their GDP, I mean, again, Mike McKee at Bloomberg is right. This is, this is, this is not. This should not be listened to. But it was a very dovish presser, primarily, in my opinion, because of the comment about tariffs only being a 2025 year. 2025 issue, and that they just don’t know what they’re talking about.

I mean, they essentially admitted that, but it was a dovish Again, we didn’t get specific comments about resumption of rate cutting policy. But I think that’s coming in May because I will tell you again, I couldn’t disagree more with the Federal Reserve when they’re saying that they’re lowering GDP growth targets and raising inflation targets. I think they’re wrong on both. I think it’s now as a discounting mechanism it’s time for the markets to start leading and we want to see that really in our again a good day today. Want to see, you know, we want to see a string of good smart money hours, strong afternoons like we had today. We want to see the semis start to lead. The semis have been up a semis did finish up 9/10 of 1% today. That wasn’t more than Nasdaq.

NASDAQ today was up 1.4%. But that was Intel. I think it was tied mostly to Intel. Intel today was down. Let me get you. Yeah, intel down 7% on the day. So I believe that’s the reason the semis backed off because they had, they had market leading gains until intel fell out of bed. And intel was really not a name that we focus on anyway.

[00:15:52]:
So they’ve obviously had a long term series of problems as a, as a, as a chip company has kind of been made a laughing stock. I think he’s turned that around. But key point is want to see the semis continue to lead. They have been leading since March 1st. All you do got to do look at the relative strength ratio of the semis to the S P 500. You’ll see that leadership from March 1st that’s starting. We’re getting better action in the afternoons. The internals again, we just had back to back days of internals.

NYSE New York up volume of 91% and 87% back to back days. S&P 500 put in back to back days of better than 90% up volume days. Okay. These are thrusts, these are bullish thrust. Right. And again, very, very good internals today as well. Got it here somewhere. Yeah.

78.9% and 74.7% NYC in NASDAQ. I throw a lot of numbers at you but the point is the eternals improved, the semites have improved, the afternoon trading is starting to improve and I think the Fed today, I think this was a risk on presser. It was absolutely dovish and I think the Fed meetings, excuse me, the Fed governors and presidents will be out hitting the rounds now. I think they’re going to make this point very clear. That they expect tariff policy to have a short term effect, as Jay Powell said today. I don’t know how they can say anything else than what Jay Powell said, especially using the word transitory. What else from the Fed today? Yeah, they actually think that unemployment is going to rise to 4.4% this year. I think, again, I think that’s laughable.

[00:17:33]:
I think it’s laughable even with the Doge cuts. I think it’s laughable under a Trump economy to think that the GDP growth is going to decline this year. I don’t see that at all. The only way it’s going to happen is if Trump takes, in my opinion, a dangerous path down the tariff road. Because again, you can do both. There’s no reason to destroy the markets and send the economy into a recession just because you want to save face on tariff policy. That makes no sense to me. I don’t believe by any stretch that’s going to be the outcome that’s going to take place here.

What else today? Oh, Powell’s asking about a recession. We just don’t see it. That was his answer. Just don’t see it. He also had some very interesting comments which we loved, about investor sentiment, about sentiment versus soft data, which is surveys, consumer surveys, which are a laughing stock. They’re very political now, okay? The media won’t tell you this, but it’s very, very true. The sentiment surveys, consumer sentiment surveys are between 70 to 80%. Democrats voted these okay.

And so they’ve become more of a political tool and a political weapon, if you will. And so they talked today about the soft data again, consumer survey results versus hard data, which is cpi, ppi, core, pce, all the hard data that we get. Because that data along with oil prices being down to $66 a barrel, right? Along with the 10 year yield now being down to 4.25%. Down big again today. Yields continue to come in. Remember, we’re at 4.8% yield just after Trump got elected. So yields are falling, oil prices are falling. Gasoline, most of the country is down below $3 a gallon.

[00:19:23]:
That’s four year lows. Egg prices have fallen by 50% since Trump took office. So all these inflationary concerns, again, hard data. The hard data is telling us inflation is not a problem. That’s the point that Powell was making today, talking about hard versus soft data and we applaud him on that. Again, this was a very good press. This is a managed, this fe to me like a managed press conference. It felt to me like Scott Bessant and Jay Powell got together and said, here’s what we’re going to do.

And this felt coordinated to me. And if that’s the case, folks, the market’s lows are in. That’s been our view anyway. Not necessarily that the lows are in because, you know, we don’t call bottoms, but because, you know, you just don’t know in this world but that this sell off, this correction now is a massive buying opportunity. And I, again, I would not be at all surprised if the lows were in for the year, maybe for Trump’s entire presidency right now. I kind of think that’s going to be the case. Great press conference today. Rarely do I give Jay Powell a golf clap.

Today Jay Powell gets a golf clap. That was just exceptional. That’s all we want, A.J. that’s all we want out of you. Be honest. Tell people the truth. Right? And again, love the fact that Jay Powell and Trump aren’t getting into it. That, that, that’s what, that’s the President Trump right there that we need.

[00:20:45]:
Let your underlings, right, let this, this is the best, most talented, smartest financial administration history. Let them do your heavy lifting for you. You can focus on the things that you really want to focus on. President Trump, I think the guy has learned a lot and I think that this is now about leaving a legacy for him and what a legacy it’s going to be. Look at the things they’ve already succeeded on. All we got to do now is get this one bugaboo out of the way. A stock market correction. Just handle this.

Don’t make that happen again. And we are good to go, Mr. President. All right, let’s take a look under the hood today again. Good day here all around. We had 3 to 1 advanced decline for both NASDAQ and NYSE. Again, NYSE up volume today, 78.9%. NASDAQ 74.7% against a string of really good internals we’re seeing now.

We did have a few more stocks. They hit a 50 week low than a high, but nothing at all to be worried about. Again, those are cumulative readings. And so at the end of the day, they almost don’t make much sense to report them. What you don’t want to see are the -600,700 stocks hitting 50 lows. And we’ve, you know, we’re obviously, you know, not with nothing like that here. Okay. In our sector, watch today also excellent.

[00:22:00]:
All 11 sectors finished high on the day. Led the upside by consumer discretionary, I.e. consumers that can spend money on things that cost a lot of money. That’s what you want to see. That gives you a risk. On vibe, that’s what we had again today, up 1.9%. We had, we had 1, 2, 3, 4, 5, 6 sectors up more than 1%. Again, nothing finished.

To the downside. Technology up a big one 1.4% as well. Again semi is up now 9/10 of 1% of the day. Our commodity watch again, here’s another key point. We’ve been making this point with you and I think we got this just right. Okay? There is no way, I mean I’m telling you, in my career this is never, I’ve never seen it happen. Where global markets are going up, hitting all time highs. That’s what’s happening all right.

In Europe, in China we all time high. Nikkei, all time high. In Germany’s DAX again, these are pretty, pretty important global indexes hitting all time highs while the US markets are going lower. Never once in my career has it been the case that tells us we have a problem in the US this is a rotational theme folks. That’s all that it is. This is a bull market theme that’s been in place from the, from the, the birth of the bull market. Octo22 we don’t have hardcore sell offs because the money never leaves the market. It goes from one sector or one country now to another.

[00:23:23]:
So what I wouldn’t be doing now with my money and what I won’t be doing is adding or. We don’t, we don’t have any European positions anyways. The socialist continent. Why would you want to own any stocks there? Sorry, I know they’re hitting all time highs but I’m sorry, I can’t do that. We do own Chinese tech stocks. That’s a different story. Trading at 3 decade low multiples compared to cash flow and earnings. So it was a compelling story and we still like Chinese tech by the way.

But I would not be putting allocating new money here into European equities. Not when we’ve had this sell off in US because that’s the distinction. The fact that the money only went to another country instead of leaving and going to cash. Right, or leaving and going into bonds. That tells us this is only a US centric sell off. And it was nothing but not a thing, just a chicken wing. There was no big deal and that’s what’s going to play out here. We had that confirmed as well by Gold.

Gold continues to rise and again in times of economic turmoil in the US and globally what happens? Guess what? Gold sells off. You wouldn’t think it would happen, but it always does because that’s a liquidity concern and people are just selling to get out, to get anything out they can that you have a gain in or need to raise cash. Oh, let’s sell some gold. It’s up. It won’t take a loss. Right. And the fact that gold continued to rise as did global markets while we went through our correction, told us it was us centric from day one and that this too shall pass. Right.

[00:24:55]:
Gold today up 16 bucks an ounce at $3,056 an ounce. Again all time high today of 3,061. Our year end price target on gold is 4,000 an ounce. Love the miners, especially the junior miners going to make fortunes in this group, folks. Silver today, reversal here hit a high today of, of 30, almost 35 bucks an hour. 34.78. It did close at 34.42. Down slightly on the day, but silver is trying to break 35 and then, I mean then I think we’re looking at all time highs, folks.

I think we’re looking at 49 plus here after this. Silver. Silver is not our favorite metal because we’re, we’re gold bugs here. At least I am. I won’t speak for Tyler. I’m a gold bug. Have been for a long time. We own, it’s like 80, 20 gold to silver.

Okay? So I, believe me, I want to see silver. Like a lot of smart people that I know, saying silver is going to be going to blow gold away. All right? It’s going to 100, 200, 300, 400 an ounce based on supply, demand and the way that that market’s been manipulated, it wouldn’t surprise me. It’s just not a prediction from us. But I. Look, the fact that silver is breaking out here is extraordinarily bullish for gold as well. Right. But especially again for the miners.

[00:26:10]:
That’s the key here. That’s where the leverage is, folks. Copper Today, boom. Over five bucks now. 512 a pound. That is a new. What is that? Copper’s not been over five bucks in quite some time. Yeah, cop.

It’s an all time high now. So there you go. All time high.512 a pound on copper. What does that tell us? It tells us the global economy is in really good shape. All right. It tells us that the last thing we have to worry about is a weak economy. How about that? We know this. I would say with a high degree of certainty, copper sends that message.

Silver does as well. Okay, again, industrial metals here. So that’s very good to see. As you can tell, we think this market’s gonna rock and ship from here. Okay. And we don’t own a copper stock, but I think I like our positions with the gold and silver and certainly with the miners. We’ve done well in copper in the past. Copper stocks in the past.

[00:27:12]:
Just can’t find one that’s more exciting than the mining stocks that we own currently. If you have one, send it away. We’ll take a look at it. Crude oil today bouncing back a little bit, back to just over $67 a barrel, up 30 cents. Today again, drill baby, drill likely means, as we’ve been telling you now for many months, drill baby, drill likely means that oil prices are going lower. How much lower? 60, maybe 62. It won’t be devastation. These oil and gas companies will still make a ton of money.

Gas and natural gas, much different story. It’s been red hot. We believe it will stay red hot. But that’s very good for obviously for inflation and for gas prices. So. And these journaling companies still going to make a ton of money. EP companies still making a ton of money even at 60 because the technology’s gotten that much better. Okay, and what else today again, that gas today? 420 per mcf.

And finally the day bitcoin again. You know, bitcoin is just a completely risk on, risk off asset, is it not? Is it a store of value? You bet your assets it’s a great store of value over a period of time. It’s obviously not a good store of value as gold is. But I don’t think that’s why anybody that I know owns bitcoin. We own bitcoin because it’s the best supply demand story of all time. And as I’ll remind you, what Cathie Wood said we shared this morning in interview she did on Bloomberg yesterday, her price target of a 2030 is $1.5 million in Bitcoin. We don’t even have a 2030 target. I think we said maybe by May, maybe a million by 2030.

[00:28:46]:
Cathie Wood’s pretty bright. They do a lot of work in the space. Again, her target, 1.5 million by 2030 as just too much institutional money that is still yet to come into bitcoin. These pullbacks are a gift. Last Trade on Bitcoin, 85,419. All right, folks, that’s it for the day. Hope you had a great day and even better night. We’ll look back to see you back here again tomorrow after the close.