[0:00] What's guys? It's Graham here and I hope
[0:01] you're prepared for what just happened.
[0:03] Believe it or not, as of a few hours
[0:05] ago, the Federal Reserve just completely
[0:07] flipped their entire outlook for the
[0:09] economy, inflation, and most
[0:11] importantly, your money to the point
[0:13] where we're about to see a complete
[0:15] financial reversal. And almost no one's
[0:17] prepared for how quickly everything is
[0:19] going to change. After all, from this
[0:21] point on, Kevin Walsh has officially
[0:24] replaced Jerome Powell as the head of
[0:25] the Federal Reserve. The market is
[0:27] freaking out because they're now
[0:28] planning to increase interest rates
[0:30] sometime in 2026. And all of this is
[0:33] happening during what's being called the
[0:35] most overvalued market in history.
[0:37] That's why we really got to break down
[0:39] exactly what the Federal Reserve just
[0:40] said, the changes that are about to take
[0:42] place as soon as next month. And then
[0:45] what this means for you, your money, and
[0:46] your investments, because the decisions
[0:49] being made right now are about to
[0:51] determine who gets rich and who quietly
[0:53] gets left behind. Although before we
[0:55] start, as usual, if you appreciate me
[0:57] making this entire video after spending
[0:59] 18 hours flying across the entire world,
[1:02] it would mean the world to me if you hit
[1:04] the like button and subscribed if you
[1:06] haven't done that already. Really means
[1:07] a lot. That's all I ask. And as a thank
[1:09] you for doing that, here's a picture of
[1:10] a bird. So, thanks so much. And also,
[1:12] big thank you to Policy Genius for
[1:14] sponsoring this video. But more on that
[1:15] later. All right. So, to bring you up to
[1:17] speed with exactly what's going on, we
[1:18] got to talk about the one subject that's
[1:20] nearly destroying the value of almost
[1:22] everything in 2026. And that would be,
[1:25] you guessed it, inflation. See, here's
[1:27] what most people don't realize. Even
[1:29] though rising prices were steadily
[1:31] trending downwards over the last few
[1:33] months, inflation has returned back to a
[1:35] 3-year high with CPI now coming in at a
[1:38] whopping 4.2% increase. Why? Well, when
[1:41] you really dig into the numbers, almost
[1:43] all of the inflation comes down to one
[1:45] source, and that's energy. Like, as you
[1:48] could see, this has nearly doubled in
[1:49] the last 6 months as a result of the
[1:51] conflict throughout the Middle East. And
[1:53] with inflation starting to tear through
[1:54] the value of almost everything, the big
[1:56] question then becomes what's next? And
[1:59] to look at that, we have to see what's
[2:01] called PPI. For those unaware, this
[2:03] stands for the producer price index. And
[2:05] it measures what businesses pay before
[2:08] they pass on the price to you. Kind of
[2:10] like what's coming down the pipeline.
[2:12] And in terms of the most recent numbers,
[2:14] it was a lot worse than expected. This
[2:16] puts the Federal Reserve in a genuinely
[2:17] impossible spot because if inflation
[2:19] doesn't come down, they might be forced
[2:21] to raise interest rates to prevent
[2:23] prices from skyrocketing out of control.
[2:26] But if oil falls, then they're going to
[2:27] have to wait and see for another few
[2:29] months before making their next move.
[2:31] Because the moment a deal falls through
[2:33] or something mysteriously happens, oil
[2:35] jumps right back up again. That's why if
[2:37] the Federal Reserve gets this next move
[2:39] wrong or waits a little longer than
[2:41] necessary, the consequences are going to
[2:43] be felt almost immediately, especially
[2:45] throughout the stock market. First of
[2:47] all, I think it goes without saying that
[2:48] this has been one of the most eventful
[2:50] stock markets that I have seen in years,
[2:52] highlighted by the largest IPO ever in
[2:55] history, SpaceX. However, when it comes
[2:58] to buying into an IPO like this and
[3:00] hopefully making money, here's where
[3:01] things get very interesting. One
[3:03] analysis looked at every single tech IPO
[3:06] over a billion dollars since 2010. And
[3:09] on the surface, the returns have been
[3:12] pretty incredible. Like the average IPO
[3:14] company was up 248% in just 5 years. But
[3:19] the catch here is that the average is
[3:20] skewed up heavily by a few incredible
[3:23] winners like Shopify and Palanteer,
[3:25] which have both increased by thousands
[3:27] of percent. So when you take those out
[3:29] of the equation, believe it or not, the
[3:31] median tech IPO is actually down 7.4% 6
[3:36] months after its first trading day and
[3:37] was still down 3.5% a full year later.
[3:40] On top of that, when it comes to SpaceX
[3:42] specifically, the reason that some of
[3:44] the big winners like Shopify and
[3:46] Palanteer did so well is because they
[3:48] IPOed small and then they grew into
[3:51] hundred billion dollar market giants.
[3:53] But SpaceX is already trading at over a
[3:56] $2 trillion valuation, meaning that 30x
[3:59] returns from here are extremely
[4:01] unlikely. And this post sums it up
[4:03] pretty perfectly. Of course, in defense
[4:05] of Elon Musk and SpaceX, he's not the
[4:07] type of person you ever want to bet
[4:09] against. And all of his companies have
[4:11] seemingly just defied the odds and have
[4:13] done incredibly well. But it is a
[4:15] reminder that buying into the hype
[4:17] usually produces below average market
[4:19] returns and eventually things tend to
[4:22] cool off, especially as the existing
[4:24] shareholders within the company start
[4:26] offloading their shares, which is
[4:28] expected to happen over the next 6
[4:30] months. Oh, and by the way, speaking of
[4:31] SpaceX, for anyone curious about my own
[4:33] thoughts on this, if it's a good time to
[4:34] buy, and what I think is going to happen
[4:35] in the future, I just posted an update
[4:38] for all the channel members, that video
[4:40] is now live for anyone who wants to see
[4:41] it. There you go. That's my way to post
[4:44] unfiltered content there and I hope you
[4:46] enjoy it. Now, separate from that
[4:48] second, I definitely see this narrative
[4:50] that the record-breaking SpaceX IPO is
[4:52] going to signal a market top in the
[4:54] middle of an AI bubble and that private
[4:56] investors are using this as a way to
[4:58] cash out before the entire stock market
[4:59] comes crumbling down. So, are they
[5:02] right? Well, Yahoo Finance actually laid
[5:04] out two really good arguments. If you
[5:06] believe the market's going down, well,
[5:09] the data says that you'd probably be
[5:11] correct. Historically, bursts of giant
[5:14] money-loosing IPOs have often clustered
[5:16] near market peaks, and SpaceX fits the
[5:19] profile. On top of that, the S&P 500's
[5:21] PE ratio now sits near 40, a level it's
[5:24] only touched once before during the
[5:26] dotcom bubble. Bank of America warns
[5:28] that the S&P 500 is overvalued on 17 of
[5:31] the 20 valuation metrics, with eight of
[5:33] those metrics exceeding the levels we
[5:35] saw during the peak of 2000. However, as
[5:37] pessimistic as all of this might sound,
[5:39] keep in mind that the exact same Bank of
[5:42] America checklist hit 70% back in
[5:45] February of 2025 when the S&P 500 was
[5:48] sitting around 61.44. And if you had
[5:51] panic sold back then, you would have
[5:53] missed out on another 20% increase. In
[5:56] addition to that, AI activity is
[5:58] skyrocketing. Even Google said that our
[6:00] cloud revenue would have been higher if
[6:02] we're able to meet the demand. That is
[6:04] why now more than ever, you need to be
[6:06] careful with your money, avoid buying
[6:07] into the hype, and position yourself for
[6:09] both sides. Because now could either be
[6:12] the start of the next major market rally
[6:14] or the beginning of a much worse problem
[6:17] beneath the surface. Although, in terms
[6:19] of what this means for the future and
[6:20] what Kevin Walsh just said about our
[6:22] economy for the first time ever in
[6:24] history, here's what you need to know.
[6:26] Although before we go on to that, I
[6:28] think this is a good reminder that a lot
[6:30] of our financial life is built around
[6:31] things that we can't control like
[6:33] inflation, interest rates, and the
[6:34] Federal Reserve. However, there are a
[6:36] few things that we can control, like
[6:39] making sure the people who financially
[6:41] rely on you are protected in the event
[6:43] something were to happen. Because look,
[6:45] we could spend all day talking about
[6:47] interest rates, but if something
[6:48] unexpected happens and there's no plan
[6:50] in place, nothing is more important than
[6:52] making sure your family is taken care
[6:54] of. That's why when it comes to planning
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[8:09] today. Thank you so much. And now, let's
[8:12] get back to the video. All right, so
[8:13] before we talk about what's about to
[8:14] happen throughout our economy, Kevin
[8:16] Worsh's latest warning for everyone
[8:18] watching, and then most importantly,
[8:20] what you could do about it, there are a
[8:22] few more topics worth discussing with
[8:23] the first one being the housing market.
[8:26] Now, this is a topic I've been paying
[8:27] extremely close attention to over the
[8:29] last few months because I just listed
[8:31] and sold another property in Los Angeles
[8:34] that's actually scheduled to close next
[8:36] week. And I got to say, over the last
[8:38] few months, the market has shifted
[8:40] substantially. Like, to put this in
[8:42] context, last year I sold my house in
[8:44] LA. I got multiple offers over asking,
[8:46] quick and easy. But this one, I priced a
[8:48] little more aggressively. And even
[8:50] though I still got multiple offers over
[8:51] asking, it just wasn't as strong as I
[8:54] expected it to be. I'm also selling a
[8:56] third property pretty soon. And with
[8:58] mortgage rates having increased, I'm
[9:01] definitely noticing that the buyer pool
[9:02] is thinning out quite a bit. To me, this
[9:04] is why it's just not surprising that
[9:06] sellers are pulling their homes off the
[9:08] market at a nearrecord pace. Like, at a
[9:10] certain point, if you don't get the
[9:12] price that you want, a lot of sellers
[9:14] just want to pull their home off the
[9:15] market and wait for things to recover,
[9:17] especially if they already have a record
[9:19] low interest rate. or basically just
[9:20] from what I'm seeing, you still have a
[9:22] corner of the sellers market who believe
[9:24] that their home is still worth what it
[9:25] was in 2021. So, they're pricing it
[9:27] really high and if they don't sell it,
[9:29] not a problem. They just take it off the
[9:31] market. And buyers, on the other hand,
[9:33] are realizing that they're gaining some
[9:35] leverage and they're submitting more
[9:36] aggressive offers with the understanding
[9:38] that if they don't get it, they just
[9:39] walk away. This is why, according to
[9:41] Zillow, they believe that the housing
[9:43] market recovery is back on pause, while
[9:45] the typical home is only up 0.8%
[9:48] year-over-year. However, I will say it
[9:51] is very important to understand that
[9:52] housing is very much location-based and
[9:55] some places might do a lot better or
[9:57] worse than the average. Like Zillow
[9:59] believes the prices will fall in places
[10:01] like Austin, New Orleans, Denver, the
[10:03] Sunb Belt, and a big chunk of
[10:04] California. Meanwhile, prices are
[10:06] expected to rise throughout a lot of the
[10:08] more affordable areas in the Midwest.
[10:10] We're talking Rockford, Illinois,
[10:12] Rochester, Wisconsin, and Sarah Cruz,
[10:14] New York. As those areas are attracting
[10:16] younger buyers who just want a more
[10:18] realistic price point to buy their first
[10:20] house. That's why in terms of the
[10:21] housing market today, as weird as this
[10:23] sounds, the higher interest rates go,
[10:25] the more likely sellers are to pull
[10:27] their homes off the market. But
[10:29] coincidentally, the fewer the homes that
[10:30] are on the market, the higher those
[10:32] remaining homes end up selling for. So,
[10:34] it's a weird paradox where housing
[10:36] prices should be falling more than they
[10:38] are, but they're not. So, here's my
[10:40] advice for buyers. Don't be afraid to
[10:43] walk away. Don't be afraid to submit an
[10:45] aggressive offer and make sure to shop
[10:47] around your loan to get the lowest
[10:49] interest rate because even a small
[10:51] difference here could save you thousands
[10:53] of dollars a year for a very long time.
[10:55] And for sellers, the strategy is
[10:57] actually the exact opposite. You have to
[10:59] price aggressively upfront if you
[11:01] actually want to sell your house. The
[11:02] reality is the longer your house sits on
[11:04] the market, the more leverage you lose,
[11:06] the more buyers begin to think that
[11:08] there's something wrong with it. and you
[11:10] wind up accepting an offer that's
[11:11] probably going to be a lot lower than
[11:13] had you just priced it appropriately
[11:15] from the get-go. In fact, this type of
[11:16] leverage isn't just happening in real
[11:18] estate, there's another market that's
[11:20] reacting to the exact same uncertainty,
[11:22] except much, much worse, and that would
[11:24] be Bitcoin. Look, there's no way to
[11:26] sugarcoat it. For all of you Bitcoin
[11:28] holders out there, it's been a rough
[11:30] ride. Like, over the last year, Bitcoin
[11:32] is down almost 40% from the all-time
[11:34] high of $124,000.
[11:36] And even in the last month, it's fallen
[11:38] another 20% to its lowest point in over
[11:41] a year. Why? Well, I hate to say it, but
[11:44] a lot of people right now seem to be
[11:45] blaming one person, and that's Michael
[11:48] Sailor. See, for those unaware, Michael
[11:49] Sailor runs a company called Strategy,
[11:52] which is the largest corporate holder of
[11:54] Bitcoin in the world with slightly more
[11:56] than 4% of the entire supply. This means
[11:58] that the Bitcoin market is now heavily
[12:00] exposed to the actions of one company or
[12:03] in essence one person who's built their
[12:06] entire reputation around the mantra of
[12:08] never selling. However, on June 1st, it
[12:10] was disclosed to that company ended up
[12:13] selling 32 Bitcoin. And right after that
[12:16] was made public, the entire market
[12:18] started to sell off. Now, even though in
[12:19] the big picture, selling 32 Bitcoin out
[12:22] of 844,000
[12:24] is basically nothing, one person summed
[12:26] it up perfectly. They said that Sailor
[12:29] could buy 20,000 Bitcoin a week and
[12:30] nobody cares. But the day he sells even
[12:33] a tiny amount, the whole market panics.
[12:36] Or basically to simplify this even
[12:37] further, Strategy is buying Bitcoin by
[12:40] issuing shares in their company. And to
[12:42] entice people to buy, they're paying out
[12:44] a 12% dividend yield. How could they
[12:47] afford that, you might ask? Well, if the
[12:49] price of Bitcoin keeps going higher,
[12:50] they could issue more shares and use the
[12:53] appreciated price to pay the dividend.
[12:55] But if the value falls, well, they might
[12:57] issue more shares of their common stock
[13:00] to raise more money, which dilutes
[13:01] current shareholders. Or they're going
[13:03] to have to sell their Bitcoin to pay for
[13:05] their overhead costs, which could cause
[13:07] the market to fall, causing them to sell
[13:10] even more Bitcoin, causing the market to
[13:12] fall, essentially creating a death
[13:14] spiral. Of course, in Michael Sailor's
[13:15] defense, he claims that if Bitcoin
[13:17] appreciates by just 2% a year on
[13:20] average, the company could cover all of
[13:21] its preferred dividends indefinitely
[13:23] without needing to issue more common
[13:25] shares. And he did wind up buying even
[13:28] more Bitcoin after the price fell. So,
[13:30] where do we go from here? Well, even
[13:32] though it doesn't sound as dramatic, the
[13:33] real reason Bitcoin has been falling is
[13:35] because a lot of the excitement and
[13:37] money has been chasing recently IPOs,
[13:40] AI, and tech. Bitcoin's also been
[13:43] underperforming over the last 5 years
[13:44] and people have grown tired of it. And
[13:46] until everyone gets excited about
[13:48] Bitcoin again, we're probably going to
[13:50] see pretty choppy performance for the
[13:52] near future. For example, Galaxy
[13:54] Research just reported that they believe
[13:56] Bitcoin may not have bottomed yet with a
[13:58] base case that it could fall between 40
[14:00] and 46,000 by late this year. But on the
[14:03] other hand, Standard Chartered believes
[14:05] that the Bitcoin bottom is already in at
[14:06] 59,000. And Galaxy itself still believes
[14:09] the Bitcoin hits 250,000 by the end of
[14:12] 2027. Although in terms of the main
[14:14] event, the new Fed chair Kevin Walsh and
[14:17] why everyone is panicking about what
[14:19] comes next. Here is what you need to
[14:21] know. As of a few hours ago, Kevin Worsh
[14:23] officially gave his first speech as
[14:25] chair of the Federal Reserve. And just
[14:27] like Jerome Powell, he reiterated that
[14:29] they are committed to fighting inflation
[14:31] while protecting the broader economy.
[14:33] Except until recently, things weren't
[14:35] really going that well. Inflation was
[14:37] rising, oil prices were skyrocketing,
[14:39] and it was unclear when the conflict was
[14:41] going to end. Although, I will say maybe
[14:43] it was just a crazy coincidence. But
[14:45] right before this meeting, a peace
[14:47] agreement was tentatively reached with
[14:49] Iran, which gives the Federal Reserve
[14:51] some room to eventually cut rates again
[14:53] when things start to subside. The bad
[14:56] news is that as of today, the market's
[14:58] pretty much confirming that we're
[14:59] unlikely going to see any rate cuts
[15:01] anytime soon. In fact, they've just
[15:03] indicated a potential rate hike sometime
[15:05] this year and that interest rates are
[15:06] expected to remain much more elevated
[15:09] than all of us were expecting. On top of
[15:11] that, today is the day where we get
[15:12] what's called the summary of economic
[15:15] projections, which basically forecasts
[15:17] where the entire Federal Reserve thinks
[15:19] our economy is heading over the next few
[15:21] years. And in terms of what they just
[15:23] said, like I mentioned earlier, they're
[15:25] now expecting interest rates to increase
[15:27] a little bit in 2026 before falling back
[15:30] down again in 2027. and once again in
[15:32] 2028. They also expect inflation to
[15:34] remain elevated at 3.6% throughout 2026
[15:38] before eventually falling back down
[15:40] again. Now, funny enough, one of the
[15:41] ways that we could tell where the
[15:42] market's heading in the future is based
[15:44] on what's called the dot plot, where
[15:46] every voting member gives the public
[15:48] full transparency as to what they think
[15:49] is best for the economy. But wouldn't
[15:51] you know it, Kevin Walsh wants to get
[15:53] rid of the dot plot entirely under the
[15:56] impression that the Fed should signal
[15:57] less and do more. effectively meaning
[15:59] that we would all get zero guidance as
[16:02] to what's going to happen next. It would
[16:04] be just a total shot in the dark.
[16:05] Although even if he is able to
[16:07] accomplish this, each voting member
[16:09] would still be able to cast a vote as to
[16:11] what they want for the future. It's just
[16:13] we wouldn't know it. That's why Kevin
[16:15] Worsh cannot unilaterally lower interest
[16:17] rates without convincing the entire
[16:20] Federal Reserve to vote alongside with
[16:22] him. And with Jerome Powell still on the
[16:24] board, it's unlikely that we're going to
[16:26] see any substantial changes until he
[16:29] eventually steps away. However, there
[16:30] are rumors that since Kevin Walsh is
[16:33] Trump's pick, he'll attempt to use that
[16:35] freedom to make his case internally for
[16:37] farreaching changes at the Fed. All of
[16:39] which I promise I will keep you posted
[16:41] on as long as you're subscribed. Anyway,
[16:43] in terms of my own thoughts about what
[16:45] just happened today and then what you
[16:46] could do about it, here's of course what
[16:48] you came for. Overall, I tend to think
[16:50] that what everyone's saying about Kevin
[16:52] Worsh is a bit dramatic. Like, in
[16:54] reality, the guy inherited an economy
[16:57] with 4.2% inflation, a war-driven oil
[17:00] shock, a divided Fed, and a bond market
[17:02] that's already in shambles. That's why,
[17:04] from my perspective, the only thing that
[17:06] matters over the next month is simply
[17:08] the peace deal. If it goes smoothly and
[17:10] oil comes down to the point where
[17:12] inflation begins to subside, then
[17:14] potentially we could talk again about
[17:16] rate cuts. But if something throws a
[17:18] wrench in that plan and things happen
[17:21] when you least expect it and inflation
[17:23] rises back up again, then all bets are
[17:25] off the table. Basically, I am just
[17:27] cautiously optimistic at this point that
[17:29] things will work out. But I'm also
[17:31] hedged just in case they don't. Plus,
[17:33] absolutely no one can predict what's
[17:35] going to happen next. Like just in the
[17:37] last week, we have seen the largest IPO
[17:40] ever in history, the hottest inflation
[17:42] in three years, a peace deal with Iran,
[17:44] and Bitcoin cut in half before the
[17:46] markets moved higher. If you would have
[17:48] even tried to have predicted this a year
[17:50] ago, it would have been impossible.
[17:51] That's why through all of this, I just
[17:53] keep saying that I'm a random dude
[17:55] making videos in a halfconverted garage.
[17:57] I have no idea what I'm talking about.
[17:59] And the only thing I can consistently do
[18:02] that has the highest chance of coming
[18:03] out ahead is just buying in as usual.
[18:06] consistently. I know people hate that I
[18:08] keep saying this, but like my strategy
[18:09] is not going to change. I've just I've
[18:11] been doing this now for like 10 years
[18:13] openly on YouTube and so far it's worked
[18:16] really well as long as you hit the like
[18:18] button and subscribe if you haven't done
[18:20] that already. So, with that said, thank
[18:21] you so much for watching. Make sure to
[18:23] check out our sponsor, Policy Genius,
[18:25] down below in the description. And as
[18:27] always, if you want bonus videos from me
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[18:33] free to join as a channel member. And
[18:35] there's a special bonus if you send me
[18:37] your investment portfolio. I'm picking a
[18:39] few every other week or so to do a
[18:42] financial audit where I could go through
[18:43] all of your finances and give you my
[18:45] thoughts. So, if that sounds
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[18:48] you so much and until next