Two Fed Voters Just Tried to Force a Rate Cut

So we had 2 Federal Reserve voters try to break rank last FOMC meeting, and they basically voted for rate cuts. They wanted it to immediately happen. Are they anticipating a rate cut? Nobody knows. Are they trying to make themselves look good in front of Trump because the new Fed chair is coming into play? Nobody knows for sure. But what I do know is they went completely against the Federal Reserve and definitely made a scene. And the Federal Reserve is currently split, which is very important because the Federal Reserve pretty much determines the trajectory of our market. If they cut interest rates, that That means the liquidity comes into the market and asset prices go up. If they don't cut interest rates at all, that means it pretty much tightens the market and asset prices don't do as well. If you want crypto and stocks to go up, you want the Federal Reserve to cut interest rates. So it's very interesting that they've been holding off on cutting for a while. But we have 2 people that literally just like, no, we need to cut interest rates. This almost never happens. What's also interesting is that we actually had Governor Waller, which sits on the FOMC board, basically say And I quote, there's two possible outcomes and they're close to a coin flip. He's making it very clear that it's 50/50, a coin flip, which is interesting because right now the market is predicting no cut at all, like 98% odds. That's really interesting. So he's saying there's a coin flip. He's saying it's 50/50 odds and the market's saying 98%, no rate cut happening for a fact. That's where the opportunity arises. Another very interesting thing that Waller said, which is I know most people missed this, most people missed this. He said appropriate policy should look through Tariff Effects on Inflation. He basically said tariff price increases are temporary noise, and the real risk is the labor market breaking. Now, if you've been keeping up with my content, you know I've been talking about how AI is displacing jobs. It's literally taking white-collar workers' jobs. This has been a consistent thing through big tech companies, which could contribute to literally the unemployment rate going up. And if that goes up, the Federal Reserve will be forced to cut interest rates. But on the flip side, we have the Iranian war. They shut down the Strait of Hormuz, or whatever it's called, which 20% of all the oil goes through there. And essentially, the price of oil has spiked up a lot. Now, the thing about oil going up is that it increases inflation. Inflation will also go up as well because oil is used in pretty much every aspect. I mean, transportation— it brings the cost of everything up. Transportation, the creation of it, the electricity to make whatever good it is. Essentially, it's involved in all those scenarios. So that means that inflation brought the price of things up, which goes against the rate cuts. So we have one situation where the job displacement can cause the rate cuts, but then we have the other situation where the increase of inflation will keep them from cutting rates. It is a weird environment for the Federal Reserve. Here's my official thoughts. When I think they're going to start cutting it is towards the end of the year. We've talked about this for a while. Towards the end of the year, when everything cools down, they'll start cutting interest rates, inflation will cool, all these things. Probably won't even have a war. So if you have a portfolio in the market, be careful. Be precautious, chill out, don't make any crazy risk decisions because right now it's very uncertain.