• Skip to main content
  • Skip to primary sidebar
  • Markets
    • Helping Families Build Wealth
  • Trade Ideas
  • Reflections
  • Links
  • Trading Program
  • Income Model
    • Income Trading Blueprint
  • Watch List
  • About
    • Privacy Policy
    • Terms of Service
    • Terms of Participation
  • Login

Zach Scheidt

Helping families build wealth so they can focus on what really matters

Jerome Powell Has a Reckless Driving Problem

September 21, 2022 at 7:19 pm by Zachary Scheidt

Jerome Powell Reckless Driving

Take a look at the picture above. It’s a real world example of what happens when you over-correct while driving.

This was my daughters car last summer. Thank goodness she was ok (and learned a valuable lesson).

But it’s also a picture of what our economy could look like thanks to Fed Chairman Jerome Powell.

It’s the Fed’s job to keep the economy in the road…

Not too far on one side. (Don’t let inflation get too high and hurt savers.)

But not too far on the other side either. (Don’t let the economy get weak and hurt employment.)

I don’t envy Jerome Powell and of course his job isn’t easy.

But today’s interest rate decision made it clear that Powell and the Federal Reserve are over-correcting and driving this economy off the side of the road.

I just hope we walk away from the wreck with only minor bumps and bruises.

Powell’s Dangerous Direction

Today, the Federal Reserve raised its target interest rate by 0.75%.

The target rate is important for the overall market, because it influences the yield on treasury bonds (which many retirees hold), the rate for mortgages, and plenty of other interest rates throughout our economy.

By hiking interest rates (and promising more rate hikes to come), Jerome Powell is slamming the breaks on the economy.

To use the driver analogy, he’s also losing traction, skidding sideways and taking our economy in a dangerous direction.

Thanks to higher interest rates, families will have higher interest payments for homes, cars and consumer debt. (Yes, I know consumer debt isn’t wise. But it’s still part of the economy we live in.)

Businesses will also face challenges. It will be harder to borrow capital to expand — which will reduce hiring, increase layoffs, and also hurt profits. (That’s part of why the market is headed lower.)

Even the government is hurt by rising interest rates. Remember all of those entitlement and stimulus checks the U.S. has been handing out? Yeah, those are financed and require interest payments as well.

And get this…

The Fed’s tool of raising interest rates takes 6 to 9 months to actually work in the broad economy.

So even though we’re already seeing signs of weakness, the Fed is firing a bazooka-sized artillery round at our country — which will take effect in April when who knows how weak the overall economy will be.

(Sorry for the mixed metaphors.)

Bottom line, the Fed is over-correcting and by the time it becomes clear that interest rates are too high, the damage will already be done.

Protecting Your Wealth From Recession

If you’re worried about the Fed’s direction for our economy, the best advice I can give you is to invest in high-quality companies that can generate profits in good times and bad.

Think about the things you’ll buy regardless of how well your stock portfolio is doing. Chances are, the company you’re buying from is a stock worth investing in.

I especially like value stocks (stocks that trade for a low price compared to earnings), and dividend plays (that pay you while you wait for the economy to rebound).

If you want to get more aggressive, green energy stocks are some of the few bright spots in todays market. These companies will benefit from spending tied to the “Inflation Reduction Act” (which won’t do a thing to reduce inflation).

One other option is to use a trading approach that can profit from falling stocks (as well as stocks set to rebound).

My Speculative Trading Program is an example. And while it has had plenty of winners AND losers, the overall program is currently profitable for the year.

Jerome Powell

You can see that as of Thursday’s close, the model has more bearish exposure. This means we’re expecting further weakness and set to profit if our bear plays trade lower.

This particular model is high-risk / potentially high reward. So I don’t advise putting more than a small portion of your overall wealth to work with a strategy like this.

But if you’re interested in an alternative approach to markets in this turbulent season, I invite you to give it a try!

(All subscriptions come with a 30-day money back guarantee. And if a monthly subscription makes more sense for your budget, just reach out to me and we’ll find a solution.)

Bottom line, we’re in for more challenges ahead.

Buckle up and make sure you’ve got a plan for protecting your savings!

Here’s to growing and protecting your wealth,

Zach

(Trade procedure: 5 minutes after this notification posts, I will enter the trade on my brokerage platform. Once filled I will edit this post to include execution prices.)

Please note: I am placing these trades in my own account. And while I notify the group of all trades 5 minutes before I place my own personal trades, this creates a conflict of interest. Please review all disclosures and agreements included with your subscription packet.

Filed Under: Markets, Public Tagged With: economy, Federal Reserve, inflation, Jerome Powell, Recession

Primary Sidebar

Top 10 Stock Picks

The Best Option Strategy to Maximize Profits

After decades of professional investing, this is the best option strategy I’ve found to maximize profits while still managing risk.

quantum computing stocks should be on your radar for trading and investing

An Investor’s Primer on Quantum Computing Stocks

Quantum computing stocks are on the move. Here are the stocks to watch and the information every trader and investor needs to know.

market bounce

Is It Time to Buy? Three Signs Point to a Market Bounce

After three weeks of declines, its time to play for a market bounce. Stocks are oversold, and trading near key support levels.

DOGE: How You Profit from Government Efficiency

DOGE is a dire threat to defense contractor revenue. But I’ve got a simple trade for you that will actually profit from cuts in government spending.

These “Trade War” Stocks are on the Move!

We’re just a few weeks into Trump’s second term, and already we’re seeing a major trade war erupting. But believe it or not, this trade war can actually work to YOUR BENEFIT as an investor!

Momentum Begets Momentum: Why This Rally Has Room to Run

The lessons I learned from Sir Isaac Newton and my old boss Bill. And why today’s market momentum reminds me how right both men were.

Five Daughters, Three Days at Universal… And One Massive Investment Trend

Affluent customers are spending big on experiences. Here’s how you can profit from this massive investment trend.

Trump’s Energy Policy Shift Will Push These Stocks Higher

I’ve been neck deep into the energy sector lately. And one area of the oil patch has caught my attention. These aren’t the flashy stocks you hear about on CNBC. But they’re the companies doing the heavy lifting in the energy world. These companies have drilling expertise… the specialized equipment… and the technical know-how that […]

When I Run Through My Neighborhood, I See a Housing Problem

I’m seeing a major shift in the housing market. And it could spell trouble for homebuilder stocks.

travel stocks

Three Travel Stocks to Pay For Your Next Trip

Spending on travel continues to be strong! Here’s how to profit…

dot plot

Mind the Dots!

The Federal Reserve’s “dot plot” will be an important market driver. Here’s what to watch as the market responds to Fed day.

homebuilder stocks

It’s Time to Take Profits on Homebuilder Stocks

Homebuilder stocks had a great run! But as investors prepare for interest rate cuts, these stocks could fall.

China stocks

🇨🇳 China Stocks — Really??

Chinese stocks have been under pressure for years. But today, Chinese stocks finally look attractive!

Death Cross Alert!

Is this falling stock in your account? I hope not!

official bear market

Wall Street HATES These Three Stocks

Investors are betting against three key consumer stocks. Here’s why these plays could be ready to hand you some lucrative profits!

DISCLAIMER: Stocks and options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the stocks and options markets. Don't trade with money you can't afford to lose.

This is neither a solicitation nor an offer to Buy/Sell stocks or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this page. The past performance of any trading system or methodology is not necessarily indicative of future results.

All trades, patterns, charts, systems, etc., discussed on this page are for illustrative purposes only and not to be construed as specific advisory recommendations. Information contained on this site or in any correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Arete Publishing, LLC · Copyright © 2025 · All Rights Reserved
Privacy Policy · Terms of Service · Terms of Participation · Log in