The FED can Play with Rates, until Modern Monetary Theory Collapses (MMT)

The FED just cut rates but the fundamentals are deteriorating and fortunately for the FED, they can play with rates until inflation picks up. If inflation picks up again, and rates can't be lowered, the modern monetary theory experiment will be over and things will look ugly. I hope it doesn't happen.

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0:00 The FED
0:51 Old Projections
2:13 Current Projections
3:57 Rate Cut
4:55 End of MMT

[LilianScott-dynz]

The rate cut is a very bold move by the Fed to stimulate economic expansion, ease financial conditions and address inflation concerns with potential benefits for consumers.

[bobzzo]

"Greed is good" - Gordon Gekko.
"Greed is good, until it's not" - FED

Good to have u back Sven.

[dannielleemarie]

My wife is already panicking, so many questions! will the rate cut lead to inflation? I'm very worried about my $1million stock portfolio losing value. What strategies should I be employing in my portfolio right now?

[Ballesteros-d]

With the Fed cutting interest rates by 50 bps, what do you think will happen to the stock market? My portfolio has performed exceptionally well this year, but I am concerned about the possibility of a market crash and losing my gains.

[kevinswift]

Love it, Sven. You know one thing that surprises me? How long the game keeps going. I do feel your perspective is close to the truth, and it's similar to mine, but the game just keeps going on and on. My theory is that, given how much vested interested there is in the game (wealthy elites, US government, etc.), they have found ways to keep the thing going even when it might seem impossible.

It can't go on forever, IMO, but it does seem to be more resilient than I once imagined.

[priestofforgottengods]

I've missed your videos, thanks!

[garrisonsimon]

A voice of reason! Sven, I also told my friend who invests that I disagree with the rate cuts. You have taught me well!

[eminhawa]

Bro we are at under 2% inflation if you exclude everything that matters such as rent, groceries, car insurance, gas. So to the fed we are doing amazing

[edbc]

Great points as always, thank you, Sven. I haven't seen any other channel that covers macro in so understandable manner. Unfortunately, politicians don't care. They're rich enough already to survive any financial Chernobyl. Ordinary people will pay for everything, as always.

[theodoroseidler]

In my opinion, the reason for the 50 bps rates cut is two fold: 1- the debt. If you add up debt + debt like obligations (healthcare and pensions) you get to 130 trillion and change. Rolling the upcoming expiring debt with high interest rates is a medium term problem. 2- recession. Anyone following the Bloombergs high frenquency economic indicator, sees the disinversion of the 2-10 yr spread and sees the FEDs remarks on the payroll must know the country is on recession and the FED is way behind the curve. If you take both the inflation/debt and the recession the FED seems to be between the sword and a hard place. And without room to print an additional 3 trillions of cash like in the pandemic. We are about to test the Modern Monetary Theory big time.

[Whanlon]

Good to have you back sven! There are a few things here i'm not sure about. First about the fed committee predictions. In the FOMC meeting I feel chair powell makes it very clear that the predictions are a poor representation and they just show a best guess rather than the spread of possible futures. And second, the article you are reading might be faulty or maybe its just a small group of traders but the overall futures market was pricing in a near 60% chance of a 50bps rate cut in the week leading up to the cut.

[BakOonLy]

Hey Sven,
Thank you for coming back :)
I missed your reality check these last weeks ahah

[bernteinar]

Buying Vale @sub 10 can be lucrative in the future ;)

[CraigTaggart]

thans Sven good to have you back and your analysis is spot on

[noredbull]

Inflation is a tax. And again, nice to see a new video!

[jasonalexander]

It's crazy to cut rates when market is all time high 😊

[jens-yngvemartinsen]

Finally someone adresses this. The budget on interest US has now grown bigger than defense budget. (Ref. US Dept clock). Projections in only 4 years is gonna be 4 times from now, being the absolute biggest budget. This is insane, and the world will collapse in a few years.

[randomencounter]

I'm pretty sure that we will see it happening. But on other hand you and me really want to see what comes after that!

[harsharao]

You are so right. Per Ray Dalio this will end with a big war.

[SomeGuy-wszj]

Hi Sven. I have no other way to tell you that Bayer is now at a technical harmonic pattern low. I have been waiting since 2019 for this level between 6 and 8 USD. Other ultra low price is natural gas and other commodities. Greetings.