Why the Fed Cuts are Causing Interest Rates to RISE Instead

TIMECODES
0:00 Intro
1:03 Federal Funds Rate
2:36 Current Mortgage Rates
3:13 Credit Card Interest Rates
4:18 New Car Loans
4:54 Government Treasuries
8:51 Inflationary Pressures on the Economy

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My name is Joe Brown, and I'm a former stock broker who spent years advising the top 1% on how to manage their wealth. After making enough money to leave the corporate world behind, I turned my attention to teaching regular people financial strategies that exist outside the mainstream - things you'd never hear from your traditional fiancial advisor.

I am not a CPA, attorney, or licensed financial advisor and the information in these videos shall not be construed as tax, legal, or financial advice from a qualified perspective. Linked items may create a financial benefit for Heresy Financial.

[jonathantaylor]

Longer dated bonds have massive duration risk. My running theory is much of the demand for the long end (10-30 year) has been coming from bond traders "renting" those bonds with zero intention to hold to maturity. As the realization sets in that inflation is here to stay bond traders are losing confidence that will be a profitable trade so we are seeing demand soften and yields climb. IMO you'd need to be crazy to loan the Federal Government money for 10 to 30 years at this point. Bills are a great and safe investment. I wouldn't even buy a bond at current yields with your money. The 10 year needs to be 6%+.

[BennyMedina-xm]

I'm retired at 47, went from Grass to Grace. This here reminds me of my transformation from a nobody to good home, honest wife, $35k biweekly and a good daughter full of ❤ I’m forever grateful harriet dixson

[Pangora]

One correction, "after the fed keep rates historically high" is more like "returned rates to the historically normal rate"

[rangerdoc]

That didn't cut rates because of victory over inflation. They cut rates because of defeat over unemployment

[vonfragyou]

Work all your life to save money to retire while the govenment deflates your money so your stuck being upside down. I remember being a child and savings account got your 6% return and there was no need for all these fancy investments. There is alot of smoke and mirrors and you explain so good that I almost understand it.

[thetapheonix]

With the government’s unending money printing you’d have to be insane to loan the government for a 30 year fixed rate of 4%.

[JoeyPaul]

Get ready folks, the treasury yield curve is unraveling. There has never not been a recession after an unraveling. It takes on avenged 6 to 18 months for the recession to hit. Rates are dropping because of labor market is trash which will eventually cascade to markets.

[MOstix]

Many savers were very happy with historically normal interest rates.

[theprofessionalamateur]

George Gammon did a great video on fed funds in 08, and the same thing happened fall of 08 after the first cut, rates went up. Interesting correlation...

[andrewilliamson]

The chart at 2:00 is incorrect. You just said they dropped 1/2 a percent (which they did) but the line only drops 1/4 percent based on the left axis scale. You can take ruler to the screen if you don't believe me.

[adrianjos]

Reckless borrowing drives up Is a good constricts reckless borrowing enough to slow inflation.

[dylankent]

Your videos paired with older videos of Milton Friedman make for a good informative Monday.

[kalobrogers]

In the long term, after the initial very short term imbalance, the federal funds rate has an exact correlation to the 30 year average mortgage rates in the usa. Look at mortgage rates since the 70s in a line chart, then pull it up next to fed funds rate since the 70s, they are almost identical.

[LeoNidas-]

Well said. The bond market is king and Fed just follows. The Fed can manipulate the short end but doesn’t control the long end of the bond curve. This second spike in short term rates is the beginning of the next bond bear market after 40 years of the bond bull market. Get ready for a repeat of the 1970s in the 2020’s.

[cjay]

This is why my long term TLT trade didn’t work the way I thought it would.

[bvwalker]

Rates weren’t historically high. They’ve been much, much higher at earlier times

[gepard]

Its nothing to worry about. If things get to difficult. FED and China will send trillions of dollar and yuan out in the market so the stock exchange will go for many more years.

[mirchimome]

I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Brooke Miller.

[beachbumLifestyle]

They will print to oblivion 😂 this is the moment the titanic cracks in half we already hit the ice and are sinking

[SteveSwanson]

2:11 "Many people were excited when the Fed finally cut rates". Not me, my money market fund 7 day yield dropped hard. Not happy lol.