BIG RUG PULL

Tomorrow marks a significant transition for the Federal Reserve as Jerome Powell prepares for his final press conference as chairman. While his tenure technically ends on May 15th with Kevin Worsh taking over, Powell is expected to use this final meeting to signal a "higher for longer" interest rate policy, driven by persistent oil price inflation. This outlook is further complicated by President Trump's recent directive to prepare for an extended blockade of Iran, a move that could exacerbate oil supply issues and headwinds for the stock market. The speaker notes that they had advised caution regarding stock market plays this week due to the impending Federal Reserve announcement and significant earnings reports. They anticipate that Powell's statements will negatively impact the market, potentially "poisoning the well" for Worsh by emphasizing the worsening oil situation compared to pre-Iran war conditions. Despite Trump's initial goal of a nuclear deal, the current situation involves Iran proposing to end its blockade in exchange for an end to nuclear discussions, while Trump maintains the blockade to pursue a deal. Iran's resilience through economic hardship, including printing money or borrowing from Russia and China, could potentially drag the global economy into recession. Despite underlying economic data, the stock market has shown resilience, which has allowed for some improvement in job numbers. Recent ADP employment data for April 11th showed 39,250 private payroll jobs created, and a revised figure for the previous week indicated 40,250 jobs. These numbers, when extrapolated, suggest a healthy job market. Powell is expected to reiterate this strength, and combined with inflationary pressures from oil, he may signal the potential for interest rate hikes rather than cuts. Consequently, the market is pricing in a low probability of rate cuts this year, with any potential cuts or even rate hikes being more likely in mid-2027. The speaker believes Powell will remain on the Federal Reserve board as a governor until January 31st, 2028, potentially to avoid personal lawsuits from Trump and to continue influencing monetary policy. Powell's final meeting is predicted to be a "middle finger meeting" where he will clearly state that the committee, with the exception of perhaps Steven Mnuchin, has reached a consensus against cutting rates due to oil prices and the need to navigate supply shocks. This preemptive stance would make any subsequent attempt by Worsh to cut rates appear politically motivated and lacking consensus, potentially rendering him a "lame duck." This scenario is expected to frustrate Trump, who may accuse Powell of obstructing policy, especially heading into the midterms. The market will likely have to accept a prolonged period of higher interest rates. The speaker attributes inflationary pressures to Trump's tariffs and the current oil spike stemming from the Iran crisis. They also touch upon the historical context of inflation, suggesting that both Trump and Biden have contributed to it, with Biden inheriting the situation as inflation began to rise. Looking ahead, the speaker expresses optimism about corporate earnings, particularly in the artificial intelligence sector, with software plays and hardware plays showing strong performance. They mention a specific hardware stock, "So and Soil," which has seen significant gains. The discussion then shifts to SpaceX and Elon Musk's proposal for super-voting shares, which the speaker views as a hype-generating tactic before an IPO. The video concludes with a promotional offer for a "Goodbye Powell" coupon and mentions an upcoming web app and stock AI tool.