Forget Rate Cuts, The Fed Will Raise Rates Again In 2024 | Danny Dayan
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- Опубліковано 3 лип 2024
- This episode Danny Dayan joins the show alongside Felix Jauvin for a discussion on the problem the Fed faces as inflation remains too high. Making the argument for another rate hike in 2024 vs consensus of rate cuts, we deep dive into financial conditions, the deficit impact, how the Fed broke the yield curve in 2021 & more. Enjoy!
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Timestamps:
00:00 Introduction
01:21 Forget Rate Cuts, The Fed Will Hike Again
07:40 Financial Conditions Are Too Loose
11:29 Avalanche Ad
12:50 Mantra Ad
19:47 The Fed Broke The Yield Curve In 2021
34:31 Fiscal Deficits & The Credit Impulse
39:25 The U.S Debt Problem
43:09 Why Is China Buying So Much Gold?
47:18 Oil
50:26 How To Trade 2024?
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Disclaimer: Nothing discussed on On The Margin should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets. - Розваги
Rate cuts commence in June 2024, taking 6-8 months to complete. A potential crash, if any, might occur by March 2025. The soft landing narrative is gaining traction, making this big recession everyone is calling for less likely. With $1 million from a business sale, I'm seeking profitable investment opportunities for the next 3 years.
The financial market is a reliable choice. Diversify your portfolio with I-bonds, stocks (ETFs, REITs, dividend-paying stocks), and bitcoin. Given your budget, I recommend hiring a fiduciary to ensure you receive professional insights for a fee.
I wholeheartedly concur; I'm 60 years old, just retired, and have about $1,250,000 in non-retirement assets. Compared to the whole value of my portfolio during the last three years, I have no debt and a very little amount of money in retirement accounts. To be completely honest, the information provided by invt-advisors can only be ignored but not neglected. Simply undertake research to choose a trustworthy one.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Marisa Michelle Litwinsky” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
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Thanks to mrs Jenna for
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her for me.
As a beginner investor, it's essential for you to have a mentor to keep you accountable. Myself, I'm guided by Jenna Brooklyn . A widely known crypto consultant
I'm a bit perplexed seeing her been mentioned here also, Didn't know she has been good to so many people this is wonderful, I'm in my fifth trade with her and it has been super.
Sometimes we have to realize, the government is not going to tell you anything about investing your money?
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A significant increase in interest rates by the Fed and rising Treasury yields, all point to additional losses for portfolios. How can I profit from the present market and protect my $450k portfolio
keep yourself safe by knowing when to sell stocks in order to limit losses. I advise consulting a CFP or other professional for advice.
Yes, I have been in touch with a CFP ever since the outbreak. With an initial starting reserve of $80k, my adviser chooses the entry and exit commands for my portfolio, which has grown to approximately $350k.
My portfolio growth has been stagnant since the 2020. I wouldn't mind consulting the advisor who guides you, I really want to grow my retirement fund since I could retire in 3 years.
I'm cautious about giving specific recommendations as everyone's situation varies. Consider independent financial advisors like “Sharon Lynne Hart” I've worked with her for 9 years and highly recommend her. Check if she meets your criteria.
Wow, her track record looks really good from what I found online. I'll take a chance and see how it goes. Thanks for the info
In a rising rate environment, it’s crucial to reassess your portfolio. High-yield bonds and growth stocks might suffer. Consider shifting to value stocks and sectors like utilities and consumer staples, which are more resilient.
I agree. Rate hikes can negatively impact interest-sensitive sectors. I’ve seen success by diversifying into real estate and inflation-protected securities. Working with a professional helped me navigate these changes effectively.
My portfolio has been underperforming lately, and I’m concerned about the upcoming rate hikes
You're not doing anything wrong; the problem is that people don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could hope to earn a high salary in these challenging conditions.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
Well, there are a few out there who know what they are doing.
Rate hikes are useless with backdoor QE and irresponsible government spending
I agree. Fiscal lunacy, not private borrowing is driving our inflation. The government borrows $1T every 100 days.
You expect a drug fiend of a decade plus to go cold turkey? Austerity is like recommending rehab to the worse street crawler.
Yup, all roads lead to FJB
@@joefer5360 I'd settle for not making it worse. Things got WAY worse fiscally post pandemic.
Mark my words: FED won't hike at all. They best they would do is not cut but pause. FED works for the rich people and so far they have been very successful in making sure the asset holders stay rich. I am one of them.
eeeeeheheheheh!!!
Nah, if the EU cuts which they will the USA will cut late right before election. If market dips they cut for Biden, if market holds they may not need to cut but economy will be slow so a cut will be needed
Nah, they’ll cut. The EU will cut soon and the USA will cut, only way they don’t cut is if China goes for Tawain. They will need to cut to hold up the market or save jobs.
Learned a lot from this Danny Dayan. Impressed.
Great show. Congrats!
Thanks guys
It’s obvious rates are not high enough and they should have kept at it before holding.
Yeah, and they also should have started raising a lot sooner than they did.
That was really interesting. Thanks for this pod.
The Fed cannot hike, for two reasons. Each one would be sufficient. 1) If it raises rates there will be more regional bank failures, 2) even if the economy does not slow down the Treasury's interest rate expenditures would blow up since Yellen has refinanced expiring Treasury bonds with short duration bonds. In fact, interest rate expenditures will blow up even if rates do not go up. If in addition the economy slows down there is a fiscal catastrophe. The Fed will have to cut rates to make real interst rates negative and have inflation erode the value of Treasuries.
Great guest! Very good analysis.
Awesome video 😎
Danny is higher for longer.
Great interviewer! Thank you, so much more measured and thoughtful than Mike.
27:01 - This man is in the zone. The 2-year / 10-year inversion is freezing the Fed.
I’m with Danny on this one. Since Nov 2023 Iv been under the
Impression they need to raise, or at least hold. I definitely felt that way in March 2024. Since early 2023 I thought the Neutral rate had double by a factor of 2 or less. I think theres a good chance they’ll abandon that 2.5% target IMO.
That was a great podcast, one of the best recently counting not only this channel. Thanks!
Fantastic analysis by Danny. I think this dynamic of lower long-term rates is what is supporting the explosive growth of private credit as the alternative to traditional lending. Fed is looking at traditional banking and wondering why its slow activity is not slowing down the economy.
Wow, what an interview
Funny how all the experts ignore the best interest rate indicator, T Bills. January the 1/12 was .89 (meaning 3-4 cuts) now it is .17. If the 3/6 inverts and stays their will be no cuts. If the 1/12 gap widens we will be getting cuts and the 3/6 will indicate how soon!! Simple Economics
In theory rate hikes should increase inflation.
However, if you hike rates enough to cause a recession, they should decrease inflation - which is what the Fed tried to do with their rate hikes over the past couple of years.
However, the present administration, for political reasons, didn't want a recession so it has been spending like drunken sailors over the past two years which temporarily has negated the recessionary effects of the rate hikes with high spending.
The upshot of the two working in opposition to each other is kicking the can down the road eventually leading to a much larger recession as the increased spending has only increased the inflationary pressure which, down the road, which will be much more severe to counter.
In other words, a classic clusterF
I agree, I began to sense that Federal Reserve Chairman J. Powell has been fighting the Treasury....Janet Yellen, US Treasury Sec as she has been front loading the debt, basically issuing more short term Treasury securities T-Bills than the longer term T-Notes and Bonds...spending or paying gov't expenditures on a weekly basis, similar to wage earners 'living paycheck to paycheck'.....So with a stagnating inverted yield curve and a Fed Funds rate not restrictive enough to continue reducing the inflation trend the Fed is stuck....Instead of previous US Treasury issuing more longer term securities and spreading the debt out for years ahead.
Rate hikes increase inflation? Rate hikes discourage leverage and borrowing. Borrowing is money creation, increasing the money supply (inflation). I think you have it backwards..
@@elliotthovanetz1945 When money is more expensive to borrow we know that that expense is passed on to the consumer in higher prices. So the question is the tradeoff between money supply increasing at a slower rate vs the higher cost of the new money that is being put into circulation that will cause prices to rise.
@@elliotthovanetz1945When its your own money you are spending on yourself, you are mindful of how much money you spend, the borrowing cost of money, time horizons on consumption, investment and savings, and you make prudent decisions, make sure you get a good value, the best quality and etc. when you spend your money on someone else such as a gift, you may be more mindful of the cost but not so much the value and quality. The Private sector/individuals operate in this way and definitely react to FED rates as it factors into normal decision making, and it has an impact on borrowing and prices go up or down accordingly. However, when you spend other people's money on other people, then you don't mind the cost, the quality, the value, time horizons, etc. The government/politicians operate in this manner, and they don't care the cost and continue to spend at record levels and are not motivate or decisioned based on normal market forces. They only care about today as it's election/relection with only short time horizons. Ultimately individuals and government both are beholden to the market, both are acting in their own best interest. Which do you think will do a better job with the money?
@ortforshort7652 you're confusing the cost of money with price inflation. Cost of borrowing increases are not inflation if the intrinsic price of items stays the same. Only leveraged buyers would feel those higher rates, which would bring down demand and lead to less money creation (deflationary)
If the Fed actually followed their own mandate, they would have already hiked again. Inflation is still over 3% and unemployment is low, Fed mandate says a hike is a no brainer. But the Fed plays politics and won't do a "surprise" rate hike before an election for fear of spooking the markets. Despite the fact that the market is supposed to be irrelevant and the Fed is supposed to be apolitical.
Rate hikes to 12% would crush inflation, trigger deflation. They don’t like inflation and will not allow deflation.
Rate increase probability is extremely low
Currently
@@cybermuse6917 raising rates could destroy the commercial RE market and too much of the debt is on bank balance sheets. The fed wont take that chance. 99% chance they just hold it here for longer. They have already stopped the quantitative tightening, they would start that before raising rates again.
@cybermuse6917 Currently at 624 billion in interest to maintain debt comprising 16% of total federal spending.
Will fed watching replace baseball ⚾️
I’ve always thought that 5% is obviously not restrictive.
It's only "not restrictive" because debt is termed out and fiscal is spending like mad. It is mildly restrictive in reality. If fiscal balanced the budget tomorrow, 3 months later you'd see unemployment at 7% and the Fed would already have cut by 100 bps. Danny's analysis is just fundamentally askew.
It's extremely restrictive if you are levered to your eyeballs. Commercial RE is already crashing, and REITs are liquidating assets to pay debt.
I listen to a lot of earnings calls (Canadian companies only) and a very common theme is debt reduction. Magna International makes car parts and they're talking about debt payment. Various energy utilities like Capital Power and ATCO are talking debt payment. This is super bearish because that debt money comes out of capex. While they are paying debt, they are not building anything new. No new jobs being created. No investment in the future.
@@shawn576 I’ve heard commercial real estate is crashing for 2 years now. Where is the wealth destruction
Ooh! Felix.
I dont know who that guy is.
Never heard of him before, but I'm going to start following him. Great analysis of a market that has diverted from reason
You both need to be wearing ties. Dress smart. Speak smart.
Congress needs to stop deficit spending. Fed simply puts bandaids over problems.
They definitely should, but who knows if they will!
Excited to see how Revux will disrupt the payment industry. Huge potential, and still in presale phase!
Instead of big corporations going into bonds they should be buying gold and gold mining stocks
Higher rates and fiscal stimulus..you are correct
Could anybody find the article that Danny referred to on restrictive environments through history? Link please
Get Danny on here regularly please
This guy knows.
idk I think they'll have to leave rates or step back until we have this next big refinancing for corporates and treasuries. I keep hearing there's a large wall around the end of Q1 2025 so they'll need that to hit and then can go higher as to offset the yield just on the current issuance.
Every new partnership announcement gets me more excited about Revux!
No more FOMO for me - I'm all in on Revux!
Because they continue to let qqq go parabolic. That’s the inflation
Two words - Deficit spending
The Fed has too much pride to hike rates again. Instead if they are quietly worried about inflation I see them using other tools behind the scenes that are less visible, like finding ways to reduce liquidity within the system. Arguably more effective than interest rate hikes anyways.
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How are they going to hike rates when oil is at stable prices, wage growth showing slowing growth, unemployment slowing peaking up? Rates are either go stay at where it is or we are seeing cuts.
A hike is just not gonna happen
No they won't lol
i want some of what he is smoking for sure.
bears just stay losing lol
FED and Govt would neevr let asset market go down meaningful if you want to protect yourself, stay invested long.
@@drajdew1664 aka btc
no raise rates, they can't cut fast enough, invite me on next time, i am just a average joe.
If you increase rates any higher eastern currency markets will break
Papenova Token is the new PEPE!.🔥🔥
Actually they're manipulating the market a lot. Why only interest, taxation is another instrument to control certain goods contribute most to the inflation.
This is unwatchable with all these in video adverts.
holding my 100k Papenova Token from the presale .. $Papenova Token to the moon!🐸
IS the strength (So called) of the economy ONLY DEPENDENT ON CONTINUED WARS?
Real Inflation is a lot higher than last year this time. I see flea markets are great indicators.. prices were crazy today not based on what sellers were asking for but based on what buyers were paying.. and buying
The whole reason why the Fed hasn't already set a higher FFR is because it can't! To do so would break the bond market and the financial system. There's no doubt that the Fed cares more about that than inflation, so higher rates are very unlikely IMO (or if we do get them then they can't last for long before being reversed).
The reason I got revux is because I believe decentralization is more important than anything else.
Papenova Token is going to be huge 🐸
Now is the time to stack up on Papenova Token.
Binance listing Papenova Token is definitely around the corner is just a matter of time and patience.🐸🔥
Papenova Token on Eth looks ready to take off bruuuuh
I mean do you think they don’t know that financial conditions are too loose? Or do you think they’re trying to keep inflation slightly higher to monetize the massive spending they did?
Lag effects are coming through. Job losses will increase. To think the next move is a hike is total delusion.
They've kicked the can long enough in an attempt for the wind to blow in their favor - the fed! Yellen and Biden are crushing the middle class💀
Canada is so fucked if the fed hikes rates again. We desperately need rate cuts to prevent a 2008 style housing and banking collapse, but Canada cutting rates before the fed would absolutely destroy the Canadian dollar.
Forget the rest, Revux is where it's at. Potential moonshot!
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The Fed was not being "irresponsibility dovish". Talking down the 10y yield below 5% was intentional and it worked. But eventually, you run out of tricks.
Very bullish on Papenova Token! ATH in 2024!🔥👌
I am gonna save this link. I'll get back here a year from now. If it turn out that your controversial prediction was right, I'd be listening to you the rest of my life but if it turns out that you're wrong and the fed cuts (as everyone else is saying) I'm gonna give you guys a huge middle finger. Deal?
FOMO kicking in as Revux partners with more and more merchants. Bullish!
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I pay to not have commercials and I really don't care hearing about Avalanche
The Fed will hike about as high as Geddy Lee's voice.
Don't see it. Labor market is starting to take a turn...
The FED follows the 2 year, and it is not saying raise, but cut....learn toread the charts, the bond markets tell the truth
He doesn’t understand leads and lags
One cut in 2024 (political) then a few hikes in 2025 ("orange man bad" 🤪 & "ooops, guess transitory 2.0 just aint so")
And Asia inflation is under control
Every week I buy more of whatever is the lowest percentage of my portfolio and try to keep everything around 10%. Please what could be my safest buys with $400k to outperform the market in 2024?
This is why I entrusted a fiduciary with my investmnt decisions. Many underestimate advisors until emotions lead to losses. My advisor crafted a tailored strategy aligning with my long-term goals, guiding entry and exit points for the equities I focus on. This has grown my portfolio to over $850k. My personal best so far
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?.
“Angela Lynn Shilling’’ is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Hike again then the whole US doom except Big Techs, sound like a good ides.
This guy totally left out Bitcoin as a inflation hedge... its not just gold or silver
I cant help but feel concerned how these comversations miss constant revisions to BLS (leaning towards the negative), household credit at unmanageable levels, during recent heavy efforts to moratorium any normal forebearance events under the rug. Incomes lag inflation so much buyers have left the building for standard home purchases. The fed hikes or not wont stop the momentum at hand. Were at a stage of pray for the least amount of pain. This is what happens in a bank/government mandated debt driven economy.
Wrong bro, the labor market will not hold up, they will not be raising rates with the labor market in the gutter
Dude sounds like he missed the boat, sorry bud.
Could be a good program but overrun with trols trying to con people with comments biut their so called brokers LOL
Crack Up Boom Imminent!
His analysis is incorrect. The real economy is unrelated to Wall Street. The real economy is already in recession.
That's objectively false. May be for some of the people you know though, but not on an aggregate level
Since when is the stock market a reflection of the 'real economy'
@@rickfool1452 who mentioned the stock market? Talking about real GDP, personal consumption, industrial production etc
Gdp is just a result of massive government spending it's not real growth
@@fmpipeline wall street is unrelated to any of these
Revux is more than a crypto - it's a game-changer for the entire industry! Guys don´t miss!
Please normalize the audio levels between the interviewer and interviewee and also the ad reads that will come in, this is just really unprofessional production quality. Good interview though
Don’t need to wait for tomorrow to buy Papenova Token crypto can buy right now.🐸
Bitcoin idiocy is astonishing.
$Papenova Token 🐸 Will 1000x minimum
🤣
I'm buying the Papenova Token token, I believe it will yield 100x this cycle....
Oh ok, he doesn’t understand how markets work 😉
WRONG
can never trust a guy with a haircut like that
I hope you’re joking. This guy is speaking facts
Embarrassing reasonanig.
UA-camr with doomed view end up being a gold bug. Nothing new to see here.