Will The Economy Crash Before The Rate Drops?

The Fed kept interest rates at 5.5% and the stock market is unsure whether to celebrate or panic.
The S&P 500 is setting new records, but what does Jerome Powell's announcement mean for interest rates longer-term?
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[@SashaYanshin]

This video is sponsored by my puppy. 🐶 She gets an extra biscuit for every Like on the video.

[@tonynewman3631]

Needs more doggo, less Sasha 😉

[@FreaksSpeaks]

Do dogs get diabetics?

[@davidlea-smith4747]

I was going to like but I don't want your dog to die of diabetes and obesity (yes, this is a big issue with dogs). On an unrelated note should we base all investment decisions assuming that most public officials are idiots?

[@BaronCorrino]

You had my like at the word 'puppy'

[@reecie2000]

500+ biscuits is too much!

[@Mikey_NoCap]

We get a new phrase - Tweedle Numpties. America sneezes, we in UK catch bubonic plague, yet again the fed leads the way and the Bank of England’s own Numpties decide well America are not dropping so we will not, meanwhile, our shorter fix term mortgages continue to roll off and cripple the hard working, all the energy companies sit on their hands and do not pass on the proper price reductions to us and the supermarkets continue to shaft us. Phew 😅 there we go, got that off my chest. Great content Sasha.

[@Cassp0nk]

We import too much to drop rates before the fed. If they go in for the pound will tank and all the imports will cost more driving inflation. We are small fry and subject to greater forces.

[@pritapp788]

@@Cassp0nk Yes, same issue for every not so big economy in the world. Aside from Russia and China perhaps, everybody is forced to follow the Federal Reserve's moves, or risk a massive increase in dollar-denominated imports (fuel in particular).

[@leemorrison8785]

Feel your pain amigo 💥

[@theodoreberry]

Thanks for sharing, brokenly down very nicely

[@lancejones4636]

One of your finest final 2 minutes, Sasha.

[@DP52001]

You are truly the best…awesome content - keep it up!

[@jasgap]

Best Macro analysis on KZbin cheers

[@protonpillpopper1]

This is brilliant. Subscribed.

[@Lstexcel]

Thanks, always appreciate and trust your insight! Keep it going Sasha!

[@LuxeonIII]

Watched 2 videos and I’m hooked , fantastic 🎉

[@pangert1]

Another great video that is backed up by data. Love that you rip on them. 😅 Please keep up the great work 😅

[@ChuckKnightTaylor]

Love Spicy Sasha. Keep it coming

[@josephk1571]

Sincerely, I appreciate your takes. I am choosing to move on. Peace and best wishes for your tube career. or whatever you decide to do. Peace from Wisconsin

[@guillermoherrera1381]

You the man 💪🎉

[@billpole]

Any investing tips for this scenario?

[@user-ho4bt2ml2r]

Love your videos sasha, so does this now mean we should be more cautious or still continue to add to funds as per your prev video ? Some small caps already up 20% in past six months.

[@affegorilla1299]

Are you ever doing a fvrr update? ✌🏻

[@bizarre9301]

How about inflation rate in the UK?

[@cyfrowymuza]

you forgot about the color of JP's tie, this is also very important and moves the market

[@markukblackmore]

Such quality content and insight. Watching Sasha is an absolute privilege.

[@astroganov]

Yeah, all indexes should go up forever exponentially no matter what.

[@user-js4iv3lz1i]

Understanding the current Fed dot plot forecast can only be appreciated with this recent history. So enlightening.

[@Moha92YT]

Can you do another video on the UK economy?

[@informer-365]

Uk economy is booming mate ftse 100 about to secretly hit that all time high and dividends and buy backs at highest levels

[@imbonkers3629]

Uk is about to hit £3 trillion of debt 😮 all big western economy’s are in the toilet 🚽

[@dazzleships1]

Brilliant and entertaining analysis. Great to get this level of analysis as it rarely exists in the mainsream media

[@OnlineSafety-ng7et]

Yes.

[@jeremypayne4840]

brillinant insights in plain english

[@RubenYebran]

Just amazing content, as always! Thank you Sasha!!

[@SashaYanshin]

🙏

[@vinitbaliyan9418]

Sasha, your analysis is correct as always. But I disagree that Fed does not know what they are doing. A bit of bluff is a part of their job in managing expectations. Their job is to avoid extreme panic or enthusiasm so crashes and bubbles don’t happen.

[@franekspeak953]

And yet they've failed tremendously with delaying interest rates increase contributing to the highest inflation in decades.

[@vinitbaliyan9418]

@@franekspeak953 I don’t think they failed because US economy is still doing ok. They have to go slow with hikes (on purpose) to avoid panic (which will really hurt economy) and give ample time to market participants to be mentally prepared. Even now they will decrease the interest rates really slowly. After everybody is bored of listening about rate cuts. This will take care of the any over enthusiasm. They are just trying to control moods swings of the public, which can swing a lot (and can hurt economy). That’s their job.

[@alfredomarchione6017]

Saving rate cuts for market free fall.

[@RichPober]

Excellent reporting. Excellent insights.

[@SashaYanshin]

🙏

[@miketrumpet6946]

Excellent data. Excellent spice. Excellent sarcasm. Excellent as ever Sasha.

[@gooldii1]

No.

[@darrellh4259]

Food deflation would be nice and insurance, but ain't gonna happen

[@cedriccottage2070]

Feels unreal, doesn't it, so obvious abs therefore so shocking what "calibers" are in charge of these things. Things you say are usually far too obvious, but as it's clear, not too those who are literally paid to not only get these obvious basics, but to be well ahead. Shocker

[@69RTR]

Are you happy

[@CuBixxx86]

i like to think that consistent incompetance is actually intention.

[@jwill540]

You think, fiat currency and low interest rates are a scam.

[@carolined5923]

Well said Sasha, they do not appear to have a clue.. one step forward and 3 steps back, they are playing hit or miss because they do not know what theyre doing.

[@CA06917]

They won't cut!

[@jonathanphillips3257]

Thank you Sasha, great fact filled review.

[@Jason-hl8uj]

When’s the next UK “is completely fucked” instalment mate?

[@SashaYanshin]

Not on the radar - too much more interesting stuff to talk about!

[@FreaksSpeaks]

Yeah,mad for it. 😂

[@johnristheanswer]

They're like hen's teeth. UK ' tubers ' don't make money talking about the UK so tslj about the US, bizarrely.

[@SashaYanshin]

@@johnristheanswerI have talked about both over the last year. Problem with that is only half the audience is interested in any one video I make. Before that, my focus was on US, Global stuff and stocks. There is only so much you can say about the state of the UK financial crisis. A lot more interesting topics with more value elsewhere.

[@voice.of.reason]

@@SashaYanshin What UK financial crisis? Two very slight negative quarters , it will be positive on the next one. "Recession" finished

[@arunpatel3253]

Hi Sasha, if you have time can please give me your thoughts on this question please? If the FED again acts slowly, then inflation will i guess drop hard to maybe below 2% in years to come, then will this allow the FED to print money again and keep inflation at 2%, so by doing what they are doing now, it allows them to turn the money printers on again later down the line? Just a thought

[@RichPober]

rations / quotas

[@Nightzo]

So, how should we take advantage of the situation if deflation hits the US economy? And why is deflation bad anyway? Wouldn't lower prices be a good thing?

[@antilunio]

Sasha. An in deep video to understand on the Trillion- scale debt of the US and risks would be really appreciated ❤

[@franekspeak953]

There's absolutely no way they're getting this wrong. Apparently, there's still a need for those high rates. The only questions are what's their purpose and who needs them. Figuring that out would be useful.

[@markemdee7311]

The federal reserve talk and dots are to deserve people, so their really do know what their are doing !

[@tombjornebark]

To avoid a scenario similar to the Volcker era, easing monetary policies too soon could lead to a resurgence of inflation. The 2% inflation target is perplexing; why not aim for 0%?

[@piotr7085]

Sasha, thank you for your input. We all appreciate it indeed.

[@mikev324]

Wasn't supercore inflation, which excludes housing, still 0.47% in Februari so rather high?

[@dunggg]

I rather see deflation than inflation.

[@absolutemadlad6340]

Hopefully 😊

[@diddleyshinyhunter]

Sasha by far the most based finance youtuber out there

[@richlandzee8686]

I'd have to disagree with you on this one. I'm in central US. I have always had an automatic text threshold set to notify me whenever I spent pass this limit. I stick to a fixed budget but guess what, I consistently get this for the past few years. In the past, this seldom happens even when I go out to eat with friends. I purposely left the notification on just to see how long this will last, it never stopped. Last month I treated a friend for Chinese New Years dinner celebration at a restaurant and they have the audacity to charge $8 for a small pot of tea with 2 small cups. My home and auto insurance rates have doubled in the past 2 years. I am in no means hurting financially since I am a high income earner but I will call as I see it. Many Americans are struggling with high prices and layoffs with phantom job opening. CC spending at an all time high and many won't stop until their credit is cut off. I just have a feeling as soon as the Fed decides to lower rates, unemployment will spike followed by economic crash.

[@jamessan6921]

Love that football analogy

[@havencat9337]

The stock market is at record high and what is putting it there are highly inflate 6-7 companies. how long till it pops? the smaller companies are all still not recovered and we probably all have a few of those that we hold hoping to start going up again - can you do a video about this? i am very confused and not sure what to do

[@alessio491]

This is of course just speculation, but given how much cash is still sitting in many funds it wouldn't surprise me if keeping rates the same is also to squeeze every single penny out of those cash holdings (risk free rate) until it becomes obvious to the public that rates should in fact already be lower. I don't think people at the Fed or BoE are clueless I think they know very well what they are doing unfortunately.

[@evadeanu1]

You’re naturally brilliant.

[@SashaYanshin]

🙏 That’s very kind!

[@westmime1083]

Good thing i watched your videos couple years ago. I bought my first appartment and locked in a 25 year loan with 1.8% rate even tho everyone from the bank recomended floating rate.

[@Clarky006]

Being critical about what they are planning is important. Almost always it never goes to plan and some ‘unforeseen problem’ rears it’s ugly head to force cuts, in this scenario it’s likely to be some kind of banking failure black swan…

[@NoNo-nr2xv]

Maybe they "oopsie" so those who know the ins and outs can profit from the wild stock ups/downs as rates are shoved up and down fast.

[@caioscofield]

Hey Sasha, don't forget the is an election year. Holding the drops for July-Sept is best for votes.

[@SSCLIA]

So what does this mean for people investing into the stock markets like the s&p500?

[@UndisturbedMonk]

Excellent

[@jboy8787]

Does the stock market crash when they cut rates? So will that tank bitcoin too then?

[@j-doomer7421]

If they cut before they reach their 2% target goal, then it'll likely be because of something substantial breaking in the economy (my guess is the financial sectors that will kickstart this crash). Keep in mind that Bitcoin is highly correlated with the S&P, and whenever indexes take a hit, so too does Bitcoin.

[@adolfoecs]

Powel is a lagging indicator as well

[@SashaYanshin]

Indeed!

[@user-ue8dc5mk6i]

The Fed is data dependent. It all depends on the upcoming data.

[@bigdaddy7729]

The thing is fed wants the inflation to be near 2%, so they still think it’s too high ! I don’t see them decrease rate anytime soon

[@lilsabin]

@5:48 , what if "those experts" are just misleading the public on purpose. I mean , they were not gonna "tell" you that they expect rates to go higher after printing money , that way , nobody panic. :)

[@PharaohC6]

It is shocking to see how clueless and useless the people with the power in politics are, once you open your eyes

[@marcusv2226]

They aren't useless. This is all part of their plan. The plan to destroy our economies is playing out perfectly for them.

[@Justchillin145]

Or maybe they aren’t clueless and they are doing things to harm us purposefully for their own selfish benefit.

[@Pepening]

Its also shocking that most people still listen and believe them, I could care less what jerome says, he's fuckin clueless

[@nkdoherty]

By once you open you eyes you mean find someone who's explained it to you

[@PharaohC6]

@@nkdoherty For the Economy, yes. But choosing who will explain it to you is important, and being able to understand what is being explained

[@pedrobarros2000]

As someone that heavily relies on data to make decisions, it's refreshing to see someone applying it to macro economics instead of pulling stuff out of their arse 😂. Thanks Sasha, love your videos.

[@oumuamua1963]

Quantitative easing (stimulation )is a softener to a declining economy. Maybe this is what is meant buy a soft landing

[@KO-gj9ug]

Historically, premature cuts lead to resurgent inflation. Holding too long causes recession. These points overlap in something called stagflation. Soft landing is literally impossible in inflationary scenarios.

[@dr.kawasaki7380]

Sasha Market Analysis 💯👍😎

[@SashaYanshin]

🙏

[@williamstares7542]

Sasha please tell us what has been the best asset class to invest in over the last 12 years. What is the best hedge against inflation? What has a fixed supply, is getting mass adoption and finally the respect that it deserves? What asset class is Larry Fink the ceo of Blackrock most bullish on? There is only one answer and have you got any?

[@Coondawgwoopwoop]

I thought I was the only person that saw more hawkishness in the dot 😅 very strange week

[@simonscott9043]

Ok but CPI and PPI both overshot expectations las couple of months isn't that relevant then?

[@SashaYanshin]

No, because you need to look at the reasons why. I covered this in depth when the inflation data came out.

[@simonscott9043]

Ok watched the inflation video and seems to plausibly contradict what am being told so .. huh..so puppy will get extra biscuit @@SashaYanshin

[@The_Unintelligent_Speculator]

All that QE got to go somewhere 📈🏠

[@pritapp788]

There will most likely be a crash, stock market rallies are irrational and mean nothing. There's a long lag between when interest rates go up and when its effects on the economy are fully felt, so right now Powell is patting himself on the back without having a full picture. When that picture becomes available I expect rates to go down very quickly, and again it won't be pretty - just like the previous rapid loosening and tightening cycles. Either that or the Fed continues to look at the wrong numbers to pretend the economy is doing great.

[@walternate2914]

The problem is that the economy appears to be very strong and housing prices are still at insanely unaffordable levels. The moment they cut, inflation will tick back up, especially in the housing market.

[@louisboylan7623]

Nice of the fed to realise that UK inflation is still pumping and since the UK bank of England has to copy every decision the fed makes they should keep rates high for long enough to beat UK inflation too before starting to cut

[@Hypocricid3]

Youre upload schedule seems to have improved. Love ur videos

[@SashaYanshin]

Doing my best!

[@JonHassellProphecy]

it may crash after this time

[@roger_is_red]

I wonder WTF the fed does too. Jeannine

[@TabulaRasa666]

Why does Sashin always sound like he has just rushed into the room 1 second before recording his videos, and is struggling to catch his breath?

[@Teetimeagain]

Why is the FTSE100 crashing upwards atm?

[@voice.of.reason]

All the mainstream channels including the normally excellent Pensioncraft, were also saying the transitory arguement until the fed admitted they stuffed up

[@mrtuber3491]

Great effort was made to ensure nearly all central banks are in the “right hands”. To the extent of taking down countries with military might. So when manipulating the global economy is required they have all the tools needed. Central banks all around the world are making the same plays and no major one is reacting differently to show up the major players and their mistakes. These are not genuine mistakes but a concerted effort and therefore they have other goals. Transfer of wealth? Interest rates were stuck at a low position for a decade and there was no wiggle room in case of a recession and the economy was not looking great despite money printing. Along comes a so called major flu epidemic 🤔 and money printing went through the roof and now they were able to inject growth into the economy and achieve higher interest rates in the process. Pre 2020 this growth and higher interest rates was highly unlikely and yet here we are. If the man on the street knows what the play is we will act accordingly in our own interest, but if we don’t know then we will act in their interests and be easily manipulated into what they want and expect us to do.

[@qsncures2201]

So you think shelter will fall in price? February home sales beat expectations by roughly 460k all on the hopes that the Fed will lower rates. Mortgage rates took the slightest drop and there was a noticeable uptick in housing demand. How can you think that if the Fed lowered rates significantly right now, there won't be a mad dash to buy homes again? You're completely overlooking aggregate demand.

[@SashaYanshin]

No. I said Shelter inflation is slowly reducing. Inflation reducing means prices go up less fast, not actually go down.

[@KingKroki007]

Hey Sasha, Big fan of your content :) A crypto project called ethena was launched and promises a risk free return of a measly 35%. Seems to good to be true of course. But their documentation is quite interesting because of their arguments why it’s “riskfree”. I guess, it could work for some time, but will blow up because of some tail risk. Wanted to tell you about it because I would like to hear your take on it. It has some interesting mechanics and I thought you could give it an educational spin on why it should and can not work in the long run. Understandable if you have better things to do :) Cheers

[@sidi6283]

Chicken Genius is a big supporter of it as you may have noticed. ;-) Would also be very interested in your opinion. Big fan of your content as well 🎉

[@Lovemy911]

😮go sasha! 😮 x

[@GOATMENTATOR]

haha this guy is too good :D

[@4272005]

"An old fart with a non-functioning brain" i laughed hard on that one

[@LeWarGaming]

You do a brilliant job at explaining macroeconomics in simple terms. Thanks very much for your vids, they're really helpful!

[@SashaYanshin]

Very glad you find it useful! 👍

[@aljanet1514]

The stock market is at record high, car prices close to record high, home prices just hit another record high, unemployment very low and you want the Fed to cut rates???? Here in CA Costco just increased their 3 liters of olive oil from $23.99 to $34.99 and you are telling us that food inflation is only 2%?? Do you go out and shop for food??? The Fed should NOT increase the rates this year and they should cause "some" pain to relieve the pressure of the high inflation already in the system.

[@robmacintyre3020]

when is Sasha getting a ticket to the Fed meeting so he can call them a bunch of tweedledums to their faces?

[@LiLChiLi_]

I support you and your family from 30k to 160k+

[@brandon_youtube]

It's purposeful. The fed wanted to run the economy hot due to the shutdown. Even if it meant wild inflation to get the supply chains up and running. They only started tightening when it was too hot!

[@mikelord93]

Might be... they also needed to devalue their debt. Now it seems like China and Russia are buying up a lot of gold. Guess what lowering the interest rates would do to gold prices

[@losersclub9942]

The last inflation numbers, CPI PPi both came in hotter than expected.

[@petevineaux]

It's not that they didn't know what they were doing, or 'not looking at data'. They were playing a diplomatic game because they didn't want to spook markets and an already fragile economy

[@lamang7603]

Total BS analogy my friend look at the insurance premium for the car, egg, milk prices are still outrageous here in US just to name a few so the Fed needs to aggressively hike rates to bring inflation down…..

[@SashaYanshin]

I spoke about car insurance in my video about inflation. It is an organised cartel racket by the industry. Nothing to do with inflationary pressures.

[@woody3804]

Printer goes brrrr

[@shinxdobeats1235]

They do it on purpose.

[@primafacie6442]

I have US relatives who are about to retire on 80% final salary government pensions, but can the US economy sustain such expenditure?