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

[00:00] What's guys? It's Graham here and I hope

[00:01] you're prepared for what just happened.

[00:03] Believe it or not, as of a few hours

[00:05] ago, the Federal Reserve just completely

[00:07] flipped their entire outlook for the

[00:09] economy, inflation, and most

[00:11] importantly, your money to the point

[00:13] where we're about to see a complete

[00:15] financial reversal. And almost no one's

[00:17] prepared for how quickly everything is

[00:19] going to change. After all, from this

[00:21] point on, Kevin Walsh has officially

[00:24] replaced Jerome Powell as the head of

[00:25] the Federal Reserve. The market is

[00:27] freaking out because they're now

[00:28] planning to increase interest rates

[00:30] sometime in 2026. And all of this is

[00:33] happening during what's being called the

[00:35] most overvalued market in history.

[00:37] That's why we really got to break down

[00:39] exactly what the Federal Reserve just

[00:40] said, the changes that are about to take

[00:42] place as soon as next month. And then

[00:45] what this means for you, your money, and

[00:46] your investments, because the decisions

[00:49] being made right now are about to

[00:51] determine who gets rich and who quietly

[00:53] gets left behind. Although before we

[00:55] start, as usual, if you appreciate me

[00:57] making this entire video after spending

[00:59] 18 hours flying across the entire world,

[01:02] it would mean the world to me if you hit

[01:04] the like button and subscribed if you

[01:06] haven't done that already. Really means

[01:07] a lot. That's all I ask. And as a thank

[01:09] you for doing that, here's a picture of

[01:10] a bird. So, thanks so much. And also,

[01:12] big thank you to Policy Genius for

[01:14] sponsoring this video. But more on that

[01:15] later. All right. So, to bring you up to

[01:17] speed with exactly what's going on, we

[01:18] got to talk about the one subject that's

[01:20] nearly destroying the value of almost

[01:22] everything in 2026. And that would be,

[01:25] you guessed it, inflation. See, here's

[01:27] what most people don't realize. Even

[01:29] though rising prices were steadily

[01:31] trending downwards over the last few

[01:33] months, inflation has returned back to a

[01:35] 3-year high with CPI now coming in at a

[01:38] whopping 4.2% increase. Why? Well, when

[01:41] you really dig into the numbers, almost

[01:43] all of the inflation comes down to one

[01:45] source, and that's energy. Like, as you

[01:48] could see, this has nearly doubled in

[01:49] the last 6 months as a result of the

[01:51] conflict throughout the Middle East. And

[01:53] with inflation starting to tear through

[01:54] the value of almost everything, the big

[01:56] question then becomes what's next? And

[01:59] to look at that, we have to see what's

[02:01] called PPI. For those unaware, this

[02:03] stands for the producer price index. And

[02:05] it measures what businesses pay before

[02:08] they pass on the price to you. Kind of

[02:10] like what's coming down the pipeline.

[02:12] And in terms of the most recent numbers,

[02:14] it was a lot worse than expected. This

[02:16] puts the Federal Reserve in a genuinely

[02:17] impossible spot because if inflation

[02:19] doesn't come down, they might be forced

[02:21] to raise interest rates to prevent

[02:23] prices from skyrocketing out of control.

[02:26] But if oil falls, then they're going to

[02:27] have to wait and see for another few

[02:29] months before making their next move.

[02:31] Because the moment a deal falls through

[02:33] or something mysteriously happens, oil

[02:35] jumps right back up again. That's why if

[02:37] the Federal Reserve gets this next move

[02:39] wrong or waits a little longer than

[02:41] necessary, the consequences are going to

[02:43] be felt almost immediately, especially

[02:45] throughout the stock market. First of

[02:47] all, I think it goes without saying that

[02:48] this has been one of the most eventful

[02:50] stock markets that I have seen in years,

[02:52] highlighted by the largest IPO ever in

[02:55] history, SpaceX. However, when it comes

[02:58] to buying into an IPO like this and

[03:00] hopefully making money, here's where

[03:01] things get very interesting. One

[03:03] analysis looked at every single tech IPO

[03:06] over a billion dollars since 2010. And

[03:09] on the surface, the returns have been

[03:12] pretty incredible. Like the average IPO

[03:14] company was up 248% in just 5 years. But

[03:19] the catch here is that the average is

[03:20] skewed up heavily by a few incredible

[03:23] winners like Shopify and Palanteer,

[03:25] which have both increased by thousands

[03:27] of percent. So when you take those out

[03:29] of the equation, believe it or not, the

[03:31] median tech IPO is actually down 7.4% 6

[03:36] months after its first trading day and

[03:37] was still down 3.5% a full year later.

[03:40] On top of that, when it comes to SpaceX

[03:42] specifically, the reason that some of

[03:44] the big winners like Shopify and

[03:46] Palanteer did so well is because they

[03:48] IPOed small and then they grew into

[03:51] hundred billion dollar market giants.

[03:53] But SpaceX is already trading at over a

[03:56] $2 trillion valuation, meaning that 30x

[03:59] returns from here are extremely

[04:01] unlikely. And this post sums it up

[04:03] pretty perfectly. Of course, in defense

[04:05] of Elon Musk and SpaceX, he's not the

[04:07] type of person you ever want to bet

[04:09] against. And all of his companies have

[04:11] seemingly just defied the odds and have

[04:13] done incredibly well. But it is a

[04:15] reminder that buying into the hype

[04:17] usually produces below average market

[04:19] returns and eventually things tend to

[04:22] cool off, especially as the existing

[04:24] shareholders within the company start

[04:26] offloading their shares, which is

[04:28] expected to happen over the next 6

[04:30] months. Oh, and by the way, speaking of

[04:31] SpaceX, for anyone curious about my own

[04:33] thoughts on this, if it's a good time to

[04:34] buy, and what I think is going to happen

[04:35] in the future, I just posted an update

[04:38] for all the channel members, that video

[04:40] is now live for anyone who wants to see

[04:41] it. There you go. That's my way to post

[04:44] unfiltered content there and I hope you

[04:46] enjoy it. Now, separate from that

[04:48] second, I definitely see this narrative

[04:50] that the record-breaking SpaceX IPO is

[04:52] going to signal a market top in the

[04:54] middle of an AI bubble and that private

[04:56] investors are using this as a way to

[04:58] cash out before the entire stock market

[04:59] comes crumbling down. So, are they

[05:02] right? Well, Yahoo Finance actually laid

[05:04] out two really good arguments. If you

[05:06] believe the market's going down, well,

[05:09] the data says that you'd probably be

[05:11] correct. Historically, bursts of giant

[05:14] money-loosing IPOs have often clustered

[05:16] near market peaks, and SpaceX fits the

[05:19] profile. On top of that, the S&P 500's

[05:21] PE ratio now sits near 40, a level it's

[05:24] only touched once before during the

[05:26] dotcom bubble. Bank of America warns

[05:28] that the S&P 500 is overvalued on 17 of

[05:31] the 20 valuation metrics, with eight of

[05:33] those metrics exceeding the levels we

[05:35] saw during the peak of 2000. However, as

[05:37] pessimistic as all of this might sound,

[05:39] keep in mind that the exact same Bank of

[05:42] America checklist hit 70% back in

[05:45] February of 2025 when the S&P 500 was

[05:48] sitting around 61.44. And if you had

[05:51] panic sold back then, you would have

[05:53] missed out on another 20% increase. In

[05:56] addition to that, AI activity is

[05:58] skyrocketing. Even Google said that our

[06:00] cloud revenue would have been higher if

[06:02] we're able to meet the demand. That is

[06:04] why now more than ever, you need to be

[06:06] careful with your money, avoid buying

[06:07] into the hype, and position yourself for

[06:09] both sides. Because now could either be

[06:12] the start of the next major market rally

[06:14] or the beginning of a much worse problem

[06:17] beneath the surface. Although, in terms

[06:19] of what this means for the future and

[06:20] what Kevin Walsh just said about our

[06:22] economy for the first time ever in

[06:24] history, here's what you need to know.

[06:26] Although before we go on to that, I

[06:28] think this is a good reminder that a lot

[06:30] of our financial life is built around

[06:31] things that we can't control like

[06:33] inflation, interest rates, and the

[06:34] Federal Reserve. However, there are a

[06:36] few things that we can control, like

[06:39] making sure the people who financially

[06:41] rely on you are protected in the event

[06:43] something were to happen. Because look,

[06:45] we could spend all day talking about

[06:47] interest rates, but if something

[06:48] unexpected happens and there's no plan

[06:50] in place, nothing is more important than

[06:52] making sure your family is taken care

[06:54] of. That's why when it comes to planning

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[08:12] get back to the video. All right, so

[08:13] before we talk about what's about to

[08:14] happen throughout our economy, Kevin

[08:16] Worsh's latest warning for everyone

[08:18] watching, and then most importantly,

[08:20] what you could do about it, there are a

[08:22] few more topics worth discussing with

[08:23] the first one being the housing market.

[08:26] Now, this is a topic I've been paying

[08:27] extremely close attention to over the

[08:29] last few months because I just listed

[08:31] and sold another property in Los Angeles

[08:34] that's actually scheduled to close next

[08:36] week. And I got to say, over the last

[08:38] few months, the market has shifted

[08:40] substantially. Like, to put this in

[08:42] context, last year I sold my house in

[08:44] LA. I got multiple offers over asking,

[08:46] quick and easy. But this one, I priced a

[08:48] little more aggressively. And even

[08:50] though I still got multiple offers over

[08:51] asking, it just wasn't as strong as I

[08:54] expected it to be. I'm also selling a

[08:56] third property pretty soon. And with

[08:58] mortgage rates having increased, I'm

[09:01] definitely noticing that the buyer pool

[09:02] is thinning out quite a bit. To me, this

[09:04] is why it's just not surprising that

[09:06] sellers are pulling their homes off the

[09:08] market at a nearrecord pace. Like, at a

[09:10] certain point, if you don't get the

[09:12] price that you want, a lot of sellers

[09:14] just want to pull their home off the

[09:15] market and wait for things to recover,

[09:17] especially if they already have a record

[09:19] low interest rate. or basically just

[09:20] from what I'm seeing, you still have a

[09:22] corner of the sellers market who believe

[09:24] that their home is still worth what it

[09:25] was in 2021. So, they're pricing it

[09:27] really high and if they don't sell it,

[09:29] not a problem. They just take it off the

[09:31] market. And buyers, on the other hand,

[09:33] are realizing that they're gaining some

[09:35] leverage and they're submitting more

[09:36] aggressive offers with the understanding

[09:38] that if they don't get it, they just

[09:39] walk away. This is why, according to

[09:41] Zillow, they believe that the housing

[09:43] market recovery is back on pause, while

[09:45] the typical home is only up 0.8%

[09:48] year-over-year. However, I will say it

[09:51] is very important to understand that

[09:52] housing is very much location-based and

[09:55] some places might do a lot better or

[09:57] worse than the average. Like Zillow

[09:59] 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

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[18:20] that already. So, with that said, thank

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