BREAKING: Federal Reserve Announces Upcoming Rate Cut! (Major Changes Explained)

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STOCK MARKET RETURNS:
Over the last 100 years, the Stock Market has averaged a 10.3% annualized return - but, if you isolate presidential election years, that jumps to an 11.6% return.

In terms of which political party is “better” for the stock market, it really depends on whose data you decide to look at. For instance, YCharts found that the average Democratic President achieved an 8.72% return when both the House and Senate were majority Democrat, a 15.72% with a split Congress, and a 14.55% return with a Republican Congress.

On the other hand, Republican Presidents received an averaged 11.7% return with a Republican Congress, 12.2% with a divided congress, and just 1.04% with a Democratic Congress. Ultimately, what it seems to favor - historically - is that a divided Congress is best for the markets because any extreme proposals won’t pass, so it’ll be more of the same.

HOUSING PRICES VS RENT CONTROL:
Under a new proposal, the president calls on Congress to “cap rent increases on existing units at 5% or risk losing current valuable federal tax breaks - and provide $10,000 in mortgage relief to unlock homeownership for millions of Americans.”

But, practically, Rent Control has actually been found to make the housing situation worse. A Stanford study argued that Rent Control has an adverse effect on prices for renters and works against making housing more affordable:

-Rent-controlled tenants were 20% more likely to stay in their unit.
-Renters were more likely to move elsewhere if they didn’t have the incentive of having their rent capped where they currently were living
-In the priciest neighborhoods, turnover was HIGHEST as landlords actively try to remove tenants to achieve market rents
-Landlords of rent-controlled buildings were more likely to convert their buildings in such a way that it wasn’t rent-controlled, reducing the amount of housing by 15%
-The loss of available housing drove up the prices of rental units. It was found that a 6% decrease in housing supply led to a 7% increase in rental prices. 

The net result is that, based on these studies, rent control ends up restricting the supply of new units into the market - and while some renters may get a bargain and win the lease-agreement lottery, most people never get access to low rent-controlled prices; if they do, they are incentivized to never move out because it’s so cheap, lowering supply.

THE FEDERAL RESERVE MEETING IN JULY 2024:

Even though Jerome Powell didn’t outright say: “We’re lowering interest rates at our next meeting,” they did give us some clues that give the option to reduce rates, should inflation continue on a downward path, and if they decide it’s the correct move to make.

To me, this is something that will likely take another year or two to “completely normalize” or get to a point where the federal funds rate hovers around 3.1% - which, they’re currently projecting to occur in 2026.

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*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice.

[sidneyblack]

I made a belt out of watches once. It was a waist of time.

[NicholasBall]

Personally, I think investors will start to seek more market diversification. can i confidently invest about $350k into the financial markets in 2024? I'm still not sure how rates will effect the market just yet, which worries me a lot.

[scottarmstrong]

Markets look like 2015-16. Probably going back to all time highs, but will probably go sideways until fed signals rate cut, Recently sold 25% of my $285k portfolio comprising of plummeting stocks that were recommended by certain financial YouTubers, quite devastating!

[dianarabbanii]

With markets tumbling, inflation still high, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly-which means more red ink for portfolios this quarter. How can I profit from the current volatile market, l'm still at a crossroads deciding if to liquidate my $400k bond/stock portfolio.

[patrickjones]

i am Confused and open to discuss. I had $250k waiting for rate hikes to end, but now I'm unsure as rates may keep rising and stocks falling.

[Vlaakster]

They announced no such thing. Even this channel, the last respectable finance channel, is filled with BS titles. I can’t do it anymore.

[oliverp]

Worst video ever with a misleading title. 15min wasted for nothing, will not happen ever again

[GraceKauffman]

AI stocks are set to dominate 2024. I prefer NVIDIA because they're well-positioned for long-term growth and support other AI companies. I know someone who made over 200% with NVIDIA. I'll also consider the other recommendations you made.

[crisflips]

I rent in Mass. The previous owner of the building sold it to an investment company. One year later the investment company raised my rent by 53%. My rent was below market value before, but the building is still in terrible shape. They claim they are going to fix some things within 90 days of rent being raised, so far it’s been 60 days and nothing has been done but adding a light in the dark hallway lol

[NancyFranciss]

Wow, another rate cut? Just when I thought my emergency fund of 234k was safely sitting pretty, now I'm tempted to dive into the inves tment pool. But where do I even start? Anyone else feeling the itch to make their money work harder?

[PattiMedema]

One thing I have learned about the stock market is that it is very very manipulated. It will not let investors know when it go up or down. It will always do the opposite what investors think it might do... If investors can figure out what the market is going to do, companies will go bankruptcy.... So I don't waste my time and energy to bother what the market is going to for me .. Long & short-term trading is generally safer, allowing investors to weather market volatility. I have managed to grow a nest egg of around 100k to a decent 432k in the space of a few months... I'm especially grateful to Aldona Sabaniene, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape.

[tenebrousjones]

Do not be fooled, prices will never go down. What may happen is prices will increase slower than they have been.

[ShepShepFT]

Rates need to stay high for another year maybe more. Low rates do not benefit middle class right until demand drops considerably.

[motormichael]

Prices didn't drop. The rate of increase did. Big difference. Also should look at real rate of return that includes inflation. If the market goes up 10% but your $ is worth 50%, you get the idea.

[commonsense]

Rate cuts would be nice but also home prices are still out of control.

[deviouslaw]

I'm a little confused on why the rate cuts are even desirable. It all seems to wash out. Stocks go up but the dollar gets devalued.

Also can we stop excluding food and energy from inflation??? I need that stuff.

[maxview]

I want to see the rates increase. I love high interest rates. Give us another 100 bps until inflation is at 2%

[michaelkuckuk]

They've been selling the food buckets for years. They suck. Make your own.

[Tonybologne]

Rates will drop, prices will drop for a month and after that the prices will surpass where they’re currently at

[jonathantaylor]

If the FED fks this up and inflation starts to come back after a rate cut or two.. watch out. Total bond market chaos.