Ep. 43 - Jerome Powell: The Emperor with No Clothes On

Does anyone notice how watching the Fed’s decisions has become the new “Super Bowl” of economics? Well, In this episode, we analyze and break down the recent decision by the Federal Reserve to raise interest rates and its potential impact on the stock and bond markets. They delve into the increasing power of the Federal Reserve and its effects on businesses and individual wallets, highlighting the possibility of a soft landing for the US economy. Alex Stewart joins in as we cover the impacts of tightening credit on consumers, businesses, and builders and the correlation between tightening credit standards and recessions. And it wouldn’t be What’s Your 1 More without revealing the opportunities hidden in the market. Diversifying investments, investing in hard assets, preparing for potential financial shocks; all here on today’s episode.

So jump right in, and let’s figure out what’s going on with Jerome Powell’s “Emperor with no clothes on” approach to decisions.

[00:01 - 06:21] Federal Reserve raises interest rates by a quarter point, causing mixed reactions in the market

[06:22 - 12:29] Experts are predicting no soft landing for the US economy, brace for potential volatility in the market

[12:30 - 19:29] Federal Reserve's tightening of the credit market causes concern for small businesses and builders

[19:30 - 24:47] Builders face constraints as regional banks struggle, leading to potential home price increases 

[24:48 - 37:43] Experts warn of potential bank runs and systemic risk as depositors seek safety amid economic uncertainty—how to start preparing

Quotes:

"The original intent behind the Federal Reserve was never to have this much power. They should not have this much power. They should not even be in a position they're in right now, but because we are where we are right now… Their power has grown.” - Quinton Harris

"When you're tightening the credit market, you're disincentivizing regional banks...That's the pressure they put on these regional banks when they do that, and that's the pressure they're applying to the credit market." - Quinton Harris

“We are at the tip of the iceberg… The reaction to any sort of crash is going to be, ‘throw money at the problem.’” - Alex Stewart 

“To me, this is opportunity… At the end of the day, this is something we just need to prepare ourselves for. We can foresee what’s going to happen, and that means I need to take some action.” - Alex Stewart

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