BREAKING: The FED Cancels ALL Rate Cuts - Stock Market Melt-Up Has Begun!
In a Nutshell
The Federal Reserve has paused rate cuts indefinitely due to surging oil prices driving inflation to ~3.3% (potentially higher), fueling a historic stock market melt-up with S&P 500 up 12%, Nasdaq's 13-day win streak, and Bitcoin up 13% amid institutional ETF inflows—despite record-low consumer sentiment signaling potential fragility. Housing prices are flattening nationally (Zillow forecasts 0% rise), with drops in overpriced Sun Belt markets and gains in affordable Northeast areas, as mortgage rates climb toward 5.7% by 2030. Ignore short-term noise from Powell's exit and Warsh's nomination; stick to consistent monthly investments in stocks and Bitcoin ETFs (under 15% allocation) to capture long-term gains, as markets thrive on maximum pain and disbelief.
These notes were generated by AI and may contain inaccuracies.
We're in the middle of one of the strongest stock market rallies ever in history, back near brand new all-time highs. This isn't just stocks: home sales are increasing, Bitcoin is up 13%. This might suggest the start of the great melt-up where asset prices balloon to unimaginable levels before everything crashes.
Federal Reserve decided not to lower interest rates a few hours ago. Need to discuss what's happening, if concerning, and how to come out ahead. This could be the last phase of the cycle where everyone feels rich right before the bill comes due.
Inflation is the giant problem. Oil controls costs of everything: cargo ships, trucks, planes, tractors, factories, plastics, packaging, fertilizers, supply chain. Every $10/barrel increase in crude oil raises inflation by 2% and sets back economic growth by 0.1%. Oil was $57/barrel a few months ago, now over $100, implying inflation increase by ~0.7%. Last month inflation at 3.3%, before oil's all-time high, so next month could be worse. Fed has frozen rate cuts this year; market prices next cut in October 2027.
Stock prices setting non-stop records: 10% rally in 10 days (one of strongest ever), from oversold to overbought in 11 days (second fastest on record), NASDAQ 13-day win streak (most in 13 years). Yet consumer sentiment at lowest in survey's 70-year history. When stock market strong and sentiment low simultaneously, something's about to break.
Stock market is forward-thinking, cares about 12 months ahead: corporate earnings, trade resolutions, future growth. Consumer sentiment measures how people feel today: grocery prices, oil prices, job security. Wall Street bets on tomorrow; Main Street lives through today.
Low consumer sentiment historically good for investing; when it improves, stocks melt up higher. Best prices at maximum pain, not maximum price.
Constant disbelief at market returning to all-time highs despite messy economy, oil issues, no rate cuts this year, ongoing inflation. Cannot time markets; no idea what happens next week. Markets don't care about pessimism. Could see economic destruction but market rises expecting bigger rebuild, or good news with sell-off for profits.
Market fell in one of worst stretches to strongest rally in 10 days. Sellers at bottom missed rally. Market best at most uncertain times, safest right before drops. Keep investing, stay the course. Cannot outperform hedge funds/insiders, but join the ride long-term.
This is broader economic shift; protecting yourself is financial and digital. During uncertainty, more log into banks/investments on public Wi-Fi. Surfshark VPN encrypts data, masks IP, prevents hackers identifying location/history. Swap device location globally (e.g., South Korea to US). Clean Web blocks ads/trackers/malware/phishing. No logs. Use code graham at surfshark.com/gra for 4 extra months free, 30-day money-back.
S&P 500 up 12% in month, Bitcoin up 13%. Still down from highs but higher prices likely: institutional money into Bitcoin ETFs, Strategy overtook US government as largest Bitcoin holder, Schwab, Goldman Sachs offering crypto products, rising national debt drives hedging.
Bitcoin down 30% from peak; fall to $60,000 rough, but doubters miss buys. Doubled down on Bitcoin ETFs when red, lowering average cost; up 25% in 2 months from bottom. Doing opposite of market belief works: buy when 'done forever', sell at hype peaks ($250K/$1M). Bitcoin ETF <15% of portfolio, long-term optimistic.
National home prices up 1.4-4% year-over-year, but Zillow downgraded forecast for 400 markets: 0% rise next 12 months (national average; half up, half down). West Coast (CA, OR, WA, NV) flat; Sun Belt (TX, LA, FL) larger drops; Northeast (Chicago, Rochester, CT) increases. Declines in areas with biggest prior run-ups, now unaffordable.
Buyers relocate to affordable Northeast ($350K houses). Key factor: mortgage rates. Higher oil → inflation expectations → higher rates. Yahoo Finance: rates to 5.7% by 2030, boosting purchasing power 5%. Forecasts: Redfin 2.6% increase, NAR 4%, Zillow/JP Morgan 0%. In Las Vegas, properties selling at 5-15% loss from 2021-2023 purchases (low rates), high inventory, buyers sidelined, sellers pricing aggressively/negotiating.
No interest rate cuts foreseeable due to inflation, rising prices, worsened consumer spending, fragile labor market. Jerome Powell term ends May 15th; Kevin Warsh (Trump nominee) expected next, 4-year term. Warsh: monetary policy independence essential, act in nation's interest. But could argue cuts are best interest (aligning with Trump). Actions > words.
Since 1930, new Fed chair → stock market average decline 16%. Warsh wants to shrink Fed balance sheet (less money printing), nearing dot-com peak levels.
Every time thinking market figured out, opposite happens. One tweet changes everything. Sellers in April missed fastest rally; Bitcoin non-buyers at $60K missed 30%. Market humbles confidence.
Only consistent strategy: decide monthly investment amount, allocation surviving 30-50% drawdown, invest no matter what (Powell, Trump, oil, inflation). Since 2017, kept buying at highs; up 200%+ on S&P 500. Daily consistent buys work. Channel membership for early/bonus videos (e.g., watch collection details).
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