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Hey There Income Hunter,
How about this for Fed BS …
“Given that the recovery has been considerably stronger and faster than in the previous cycle, I expect the balance sheet to shrink considerably more rapidly than in the previous recovery.”
Obviously the consumer doesn’t agree with the Fed, since consumer expectations are much worse now than they were in the 2008 tightening cycle.
And the Fed hasn’t even started QT!
Today, I will show you that not even the Fed itself believes what they are saying … Plus a most significant move yesterday that raises a red flag.
The Fed Nowcast GDP
The only real information the Fed provides is the Atlanta Fed nowcast GDP forecast. Now, Their forecast for Q2 ‘22 is .09% – and that is half the level of their target growth level of 2%.
Notice the chart below that illustrates their model trend, and also Wall Street’s level that is double the Fed’s forecast …
Fed Credibility Takes Another Hit
As the Fed continues to deceive Americans, we get closer to the point when the cat is out of the bag.
The chart above and the one below tells the real story of the Fed’s lies.
2018 was the last time the Fed launched QT and the economy was growing at 5% right before they pulled the trigger.
Today we will have the current GDP numbers before the Fed initiates QT. They will be MUCH lower.
Next week will begin to see real economic data from the first quarter and those numbers will bring transparency to the economy.
I think the numbers will come in softer than expected and then earnings will be the real surprise.
The bottom line is growth is slowing fast and the Russian invasion and sanctions have made our economic problems much worse.
Bring It Home
The other signal we received yesterday was from iShares High Yield Corporate Bond ETF (Ticker: HYG) … HYG appeared to be breaking out to the upside above the 50-day moving average, but it failed miserably on high volume.
That is significant because high- yield bonds are always the first to show early signs of problems in the economy and the possibility for corporate bond downgrades and defaults on debt.
I expect HYG to make new lows in the weeks ahead.
I gave my Power Income Trader members a bearish HYG option strategy last week and today it was up 16%. We have a number of trades in the money right now and I expect over the next week we will be stacking profits on them.
If you would like to get exclusive trades sent directly via email and text – plus learn how to front run the Fed and gain a massive advantage over the market — call 888-872-3301 and speak to our Customer Care Team about a subscription to Power Income Trader …
There’s no time to waste … I see awesome trading opportunities in the months ahead.
Live and Trade With Passion My Friend,
Griff