The Four Key Factors for Analyzing Fed Events Amid a Deepening Banking Crisis

Stansberry Investor Hour

This week's episode of Stanberry Investor Hour features John Netto, author of investing book The Global Macro Edge.

Dan and Corey start the episode by examining the recent failure of First Republic Bank – the second-largest U.S. bank failure to date – and its acquisition by JPMorgan Chase. They raise concerns about the ongoing banking crisis and the role the government plays in backing "too big to fail" banks. With three of the four largest bank failures in U.S. history happening in the past two months, there's growing uncertainty heading into this week's Federal Reserve meetings. Then, John joins the conversation and shares insights from his book, including the concept of how emotions act as the lubricant for decision-making. He says that traders often make the mistake of analyzing their success based solely on the results rather than how well they executed their process. To combat this phenomenon, John created the "Netto number." He explains how it can help investors recognize when their strategy begins to decay and how they can use it to maximize returns. The discussion then shifts to central banks and monetary policy, with John describing his four factors for analyzing Fed events. Based on his analysis, John argues that the Fed will not be cutting rates this year and will instead be keeping them near a 4.5% to 5.5% pace until the second quarter of 2024... "Because we have interest rates at 7%, it's going to take a long time for this housing inventory to roll over." He asserts that if we go into a recession, it will be a very mild one. You can hear his full reasoning in today's Investor Hour.

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