The Great Turning Point for the U.S. Economy is Finally Here

The time has come for policy adjustments as Jerome Powell, the Chair of the Federal Reserve, recently indicated at Jackson Hole. With the current federal funds rate at 5.25% to 5.5%, we are witnessing a pivotal moment in U.S. monetary policy as inflation drops to around 3%. This video delves into what these potential interest rate cuts mean for borrowing conditions, mortgage rates, and overall economic health.

As we explore this shift in strategy by the Fed, we'll discuss its implications on employment and price stability while addressing concerns about whether lowering rates is indeed a wise move.

#InterestRates #FederalReserve

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★ ★ CONTENTS ★ ★
0:00 A New Era for Monetary Policy
1:55 Unemployment Data Triggers a Cut
4:00 Will Rates Really Fall That Far?
7:08 Jerome Powell's Opinion
9:28 Steve Eisman's Take
10:28 The Economic Consequences

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[NewMoneyYouTube]

Interested to hear your perspectives - where do you think the Fed will land with interest rates over the next year or so?

[SheriKaye]

Although I have interests in global economics I don't watch the news anymore... I have enough FUD lol. Thanks for this news and offering your insight on how to navigate during unfortunate times/events like this. You're right about keeping level headed when investing so that's why I think it's important to limit the amount of FUD we consume. I don't watch the media but the news that you present has enough to know issues going on without riding the emotional rollercoaster if I were to watch the news everyday. Now I buy and just trade long term more than ever, I have made over 16 btc from day trading with Francine Duguay in few weeks, this is one of the best medium to backup your assets incase it goes bearish.

[SaintMoretz]

I'm looking to enter the market now and ride it out as the economy improves. I'm putting together a $350, 000 portfolio with Stocks and ETF's. Do you have any recommendations with solid cash flow?

[andrewvisiko]

Unemployment may currently sit at 4.3%, but the Federal Reserve knows it's about to rise rapidly. Before the situation worsens, the Fed is preparing to cut rates, but when they do, it's never a positive sign. Rate cuts signal that the Fed anticipates an economic downturn and is trying to preemptively stimulate the economy. The problem is, it’s already too late. The damage has been done. Job layoffs and corporate bankruptcies will continue, even in a lower interest rate environment. Consumer demand will keep falling, and demand destruction will accelerate.

It’s important to remember that monetary policy has a lagging effect. It typically takes two to three years to fully impact the economy. The same applies when the Fed lowers rates—there’s a delay before any positive effects are felt.

The Fed is in a precarious position. Inflation remains uncontrolled because they never raised rates high enough to truly curb consumer spending or encourage saving. Both consumers and companies are dangerously over-leveraged in debt, and they’re about to feel the consequences. We are entering a stagflation scenario, where unemployment is rising alongside persistent inflation.

Traditional Fed strategies won’t work this time. Lowering rates and resorting to money printing through quantitative easing will only weaken the dollar further and exacerbate inflation. The usual playbook won’t be enough to steer us out of this.

[ClaudiaSchreiber-bp]

The rising interest rate can surely control inflation, but won't prevent erosion of the eroding purchasing power of the US dollar. I have learnt my lesson this time. The banks can't be making money off my money, while inflation eats into it. I have set aside 650k to invest in the stock market now, since that keeps up with inflation, but I don't know how to get started.

[NikitaMcLauren]

Amazing content! I have been following your videos for sometime now, consistently kicking down Wall Street doors for two years now, I have over $320k in stocks. Currently, my portfolio is down by 15%. Wondering if they're any short term opportunities I can invest in

[garbonzo]

I would have liked to have watched this entire video, but the thumping bass on the music was so obnoxious, I moved on.

[gmachlin]

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[randyortonrko]

Re-upload without the background music

[Jones]

The U.S. economy can actually get better if only the govt can start making better decisions for the sake of it's citizens, cos' they've really made life more difficult for its residents. Hyperinflation has left the less haves bearing the brunt of the burden. Its already eating into my entire $620k retirement portfolio. Like where else can we invest our money with less risks?

[Arizona]

Seriously it doesn’t matter if prices don’t drop. A new truck shouldn’t cost as much as they are and a small home needing repair is not worth the price no matter the rate

[CodingAbroad]

The music!! My ears are bleeding! Noooo

[killersentra]

Election year they will keep it moving positive.

[billlhooo]

billionaires be like: making billions out of the suffering of people and buying stocks when low and profiting when high. The rich stays richer and the poor stay as slaves and poorer.

[TascastFishing]

I remember asking my parents about their interest rates. 12.5% in 1980. But the housing market was much more affordable. If rates were at that level for most new home buyers, they’d simply default. We’re living in very different conditions so the RBA should tread very carefully.

[abea]

To say that these rates are closer to the historical norm than being high is pretty silly. If you accept that, then house prices should be repriced to the same house prices to income ratios as historically, and that would collapse many western economies.

[webweb]

I stopped watching at 0:49 because of the background music.

[Theresaa]

Some experts thinks the current rate could boost certain industries, while others warn it might increase concerns. I'm reviewing my $600K portfolio allocations and I'm curious about strategies to respond to these potential sector impacts.

[alexaber]

I have about $110k left on my mortgage. I've been delaying paying it off because 1 yr cds have been 5%+ and my mortgage rate is 3.5%. Keeping the $110k in CDs rather than becoming debt free yields positive yearly cashflow of about $1, 650. If the fed rate drop causes CDs to drop to less than 3.5%, I'll pay off my mortgage the next time the CD matures.

[JacobPaul-np]

Since Biden took office, there seem to have been more unfavorable results in America. These results include effects on the markets, such as price declines and sharp increases in inflation, as well as bank failures. I wonder if the sudden increase in interest rates will help value investors or if it would be wiser to stay away from the stock and financial markets for the time being.