---
title: 'BREAKING: The FED Cancels ALL Rate Cuts - Market Selloff Has Begun!'
source: 'https://youtube.com/watch?v=zJZTJAMUkP0'
video_id: 'zJZTJAMUkP0'
date: 2026-06-29
duration_sec: 1130
---

# BREAKING: The FED Cancels ALL Rate Cuts - Market Selloff Has Begun!

> Source: [BREAKING: The FED Cancels ALL Rate Cuts - Market Selloff Has Begun!](https://youtube.com/watch?v=zJZTJAMUkP0)

## Summary

The Federal Reserve has unexpectedly canceled all rate cuts and signaled a potential rate hike in 2026, driven by inflation surging to a 3-year high of 4.2% due to energy costs. The video analyzes the implications for the stock market, housing, Bitcoin, and the new Fed chair Kevin Walsh's first speech.

### Key Points

- **Inflation Returns to 3-Year High** [01:38] — CPI inflation hit 4.2%, a 3-year high, primarily due to energy costs from Middle East conflict.
- **PPI Worse Than Expected** [02:14] — PPI (Producer Price Index) came in worse than expected, indicating future price pressures.
- **SpaceX IPO and Tech IPO Performance** [02:55] — SpaceX had the largest IPO ever, but median tech IPOs are down 7.4% after 6 months.
- **Market Overvaluation Warning** [05:21] — S&P 500 P/E ratio near 40, a level only seen during the dotcom bubble; Bank of America says 17 of 20 valuation metrics show overvaluation.
- **Housing Market Shift** [08:26] — Housing market shifting: sellers pulling listings, buyers gaining leverage; Zillow says recovery on pause.
- **Bitcoin Sell-Off** [11:26] — Bitcoin down 40% from all-time high; sell-off triggered by Strategy selling 32 Bitcoin.
- **Kevin Walsh's First Speech** [14:23] — Kevin Walsh gave first speech as Fed chair; wants to remove dot plot for less guidance.
- **Peace Deal with Iran** [14:45] — Peace deal with Iran tentatively reached, giving Fed room to cut rates if oil falls.
- **Fed's New Projections** [15:27] — Fed expects rate hike in 2026, inflation at 3.6% through 2026.

## Transcript

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