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Fed Rate Hike Fears Climb📈Market Turmoil Ahead?🔥 · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Rate hike odds are increasing and this could have major
• 0:03
  Speaker 1: impact on the market today. Let's break it down. I
• 0:06
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• 0:41
  Speaker 1: it for yourself. Because I want to kind of focus
• 0:43
  Speaker 1: on something that's happening right now. And that, of course,
• 0:46
  Speaker 1: is the possibility of a full-on rate hike. When you
• 0:51
  Speaker 1: look at the current Fed rate hike odds right there
• 0:53
  Speaker 1: on Polymarket, here's the spike right there to almost 60%.
• 0:58
  Speaker 1: This is getting a little bit out of control when
• 1:00
  Speaker 1: you can consider right now the impact of what we're
• 1:03
  Speaker 1: dealing with, guys. There's two things that could be really
• 1:08
  Speaker 1: important here. And one, I think you have to look
• 1:11
  Speaker 1: at how Warsh is going to deal with this. This
• 1:15
  Speaker 1: is going to come up in just a few weeks
• 1:17
  Speaker 1: as we go, actually, on September 15. We'll get a
• 1:20
  Speaker 1: chance to see how he responds. But also, I think
• 1:23
  Speaker 1: the fact that is going to be boiling down to
• 1:25
  Speaker 1: this is how is he going to deal with Trump?
• 1:26
  Speaker 1: Because Trump has been pushing so hard to maintain. However,
• 1:31
  Speaker 1: even though he has backed off some, I don't know
• 1:33
  Speaker 1: if he's ready for a full-on rate hike, which, as
• 1:36
  Speaker 1: you can see right there, holding at 60% for a
• 1:39
  Speaker 1: 25 BIP. So no change, setting at 40%. Let me
• 1:44
  Speaker 1: know what you guys think. Are we going to get
• 1:45
  Speaker 1: a hike here in a couple of weeks or not?
• 1:47
  Speaker 1: You also have to look at another major issue right now.
• 1:50
  Speaker 1: And that, of course, is the S & P 500
• 1:53
  Speaker 1: starting to adjust down. Brent oil crude prices are now
• 1:57
  Speaker 1: going up. We're seeing plus 90. I'll show you some
• 1:59
  Speaker 1: stuff there. When you look at the overall, let me
• 2:02
  Speaker 1: go to the S. Actually, let's take a look at Bitcoin,
• 2:05
  Speaker 1: because this is one that has been holding through this
• 2:07
  Speaker 1: period of tumultuous times just in the last week or so.
• 2:12
  Speaker 1: So when you look at the S & P, you
• 2:13
  Speaker 1: can kind of see a little bit of an adjustment
• 2:15
  Speaker 1: there off the all-time high. This could be a reversal.
• 2:19
  Speaker 1: This is something also Tom Lee has talked about. He
• 2:21
  Speaker 1: thinks we're going to have a bullish September. This, of course,
• 2:26
  Speaker 1: plays in line, I think, maybe with digital assets. If
• 2:28
  Speaker 1: you look at gold, of course, it also has been
• 2:31
  Speaker 1: taking a beating over the last few days. Bitcoin holding
• 2:35
  Speaker 1: fairly nice. And I think that's the issue we're in
• 2:37
  Speaker 1: right now is a very uncertain market. And of course,
• 2:41
  Speaker 1: very uncertain issues around where inflation is going to play.
• 2:44
  Speaker 1: ISM manufacturing, the PMI came in missing, which was around
• 2:49
  Speaker 1: a 55.2 forecast. This, of course, was stepping down from
• 2:52
  Speaker 1: its last month's four-year high at 55.6. But one thing
• 2:57
  Speaker 1: to consider here is if you put this all together,
• 2:59
  Speaker 1: none of this collapse and none of it is a
• 3:03
  Speaker 1: green light either. So it's kind of an in-between moment
• 3:06
  Speaker 1: right now in terms of how PMI is going to
• 3:09
  Speaker 1: play out. And this, of course, plays into inflation in general.
• 3:13
  Speaker 1: And I think this is the thing that Warsh is
• 3:15
  Speaker 1: going to have to take a look at as it
• 3:17
  Speaker 1: continues to put a little bit of pressure on him.
• 3:19
  Speaker 1: And of course, the other issue you're dealing with is energy.
• 3:23
  Speaker 1: And energy is the one I think that puts more
• 3:25
  Speaker 1: pressure on the Republicans than anyone. Average national gas price
• 3:29
  Speaker 1: right now, four bucks a gallon. This was every day
• 3:32
  Speaker 1: of August, which was breaking a new record for the
• 3:34
  Speaker 1: most expensive month ever for gasoline. on President Trump's watch.
• 3:39
  Speaker 1: So for no new wars and the issues that we're
• 3:43
  Speaker 1: facing all stemming out of what's going on in the
• 3:46
  Speaker 1: straight of war moves. If you look at crude right now,
• 3:49
  Speaker 1: like crude futures, you see this breakout line that we're
• 3:53
  Speaker 1: in literally today. That's where we are as crude continues
• 3:58
  Speaker 1: to break out at almost $ 90 a barrel. If this
• 4:02
  Speaker 1: moves into $ 100 a barrel, I think the midterms are
• 4:05
  Speaker 1: lost for sure. There is no way I think the
• 4:07
  Speaker 1: Republicans come back from this. And this, of course, changes
• 4:10
  Speaker 1: everything in politics in D.C. over the next couple of years.
• 4:14
  Speaker 1: So let's take a look at where this lands, guys.
• 4:17
  Speaker 1: And you are dealing with a Fed that has one
• 4:22
  Speaker 1: set of data points that are gearing toward inflation, energy
• 4:27
  Speaker 1: mostly being the catalyst of what we're seeing in inflation.
• 4:30
  Speaker 1: And then you have an administration that is pushing back
• 4:33
  Speaker 1: literally by the tons on this Fed chair to ensure
• 4:38
  Speaker 1: that we don't get rate hikes. And this, of course,
• 4:40
  Speaker 1: is all leading into a midterm. So timing is everything.
• 4:43
  Speaker 1: I don't think we see a rate hike. I think
• 4:46
  Speaker 1: he pauses again. Now, what does this do to the market?
• 4:49
  Speaker 1: This is going to be an interesting week when that occurs,
• 4:52
  Speaker 1: because there's another thing that's happening. And that, of course,
• 4:54
  Speaker 1: the cloture vote happens on the 15th as well for
• 4:56
  Speaker 1: Clarity Act. So for crypto, it could be a very
• 5:00
  Speaker 1: interesting time with a pause on rate hikes. a potential
• 5:05
  Speaker 1: cloture vote one way or the other, and of course,
• 5:08
  Speaker 1: the situation that is brewing within Iran. All of this
• 5:11
  Speaker 1: is happening this month, guys. So I want to go
• 5:14
  Speaker 1: to a clip here because this is where it kind
• 5:17
  Speaker 1: of goes into the point of we're not even close
• 5:19
  Speaker 1: to an end. And that's the point I'm getting at
• 5:21
  Speaker 1: is this has a lot more to play out. Take
• 5:23
  Speaker 1: a look.
• 5:25
  Speaker 2: Well, to answer that directly, Andrew, I would say we're
• 5:28
  Speaker 2: not close to the end here. It's clear there are
• 5:30
  Speaker 2: many more chapters. I think what is confusing markets and
• 5:34
  Speaker 2: investors and consumers right now is this use of military
• 5:39
  Speaker 2: force and the threat of more force just a week
• 5:42
  Speaker 2: after Secretary Besant announced.
• 5:44
  Speaker 1: That the U.S.
• 5:45
  Speaker 2: Was pivoting to a strategy of real economic pressure over
• 5:49
  Speaker 2: military strikes. To me, actually, this is actually not a contradiction.
• 5:55
  Speaker 1: And what is.
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  Speaker 2: Really the problem here with the United States strategy is
• 5:59
  Speaker 2: there are all these tools in play. We've got sanctions.
• 6:02
  Speaker 2: We have military force. The Iranians talking about diplomacy again.
• 6:06
  Speaker 2: But none of this has been brought together in a
• 6:09
  Speaker 2: strategy to advance a clear goal. And until that happens,
• 6:14
  Speaker 2: we are going to continue to lurch from escalation to escalation.
• 6:19
  Speaker 1: So the long term is that there's no real easy
• 6:21
  Speaker 1: way out of this. There is going to have to
• 6:23
  Speaker 1: be a structural change in some sort of strategy. I
• 6:27
  Speaker 1: just don't know how this happens in this presidency. And
• 6:31
  Speaker 1: this will be something that could go on for years.
• 6:34
  Speaker 1: So other things, you've got Barr now warning this. And
• 6:38
  Speaker 1: this is in reference to what he's saying about inflation,
• 6:41
  Speaker 1: which is remaining too high. And this, of course, all
• 6:44
  Speaker 1: levers into what's happening in the energy market. And he
• 6:47
  Speaker 1: did warn that if inflation fails to cool soon, an
• 6:51
  Speaker 1: interest rate hike will be necessary. So this is a
• 6:54
  Speaker 1: governor that is pushing back. Remember, we had dissents on
• 6:58
  Speaker 1: the last one, FOMC meeting. How much can Worth withstand
• 7:03
  Speaker 1: if we continue to see? And don't forget, Jerome Powell
• 7:07
  Speaker 1: is still in there as a Fed governor. So there's
• 7:09
  Speaker 1: some pressure there coming from the previous chair. Other points,
• 7:14
  Speaker 1: here was Charlie Biello, and this kind of goes to
• 7:16
  Speaker 1: the point I was mentioning earlier. The Fed cut rates
• 7:20
  Speaker 1: 50 basis points in September of 2024. This was a
• 7:24
  Speaker 1: big deal. It was kind of that unusual time when
• 7:28
  Speaker 1: Powell did this, and it happened during and right before,
• 7:33
  Speaker 1: of course, the administration change occurred. And that was a
• 7:37
  Speaker 1: policy mistake. And they compounded the mistake now by cutting
• 7:41
  Speaker 1: another 125 basis points. They should have hiked. And that's
• 7:45
  Speaker 1: the case right now. What he thinks is going to
• 7:47
  Speaker 1: be the case here is they should hike rates by
• 7:51
  Speaker 1: 50 basis points this month and follow up with 50
• 7:53
  Speaker 1: in October and December. That would absolutely destroy the real
• 7:58
  Speaker 1: estate market in the United States. I mean, it would
• 8:01
  Speaker 1: just gobble it up. I'm not even sure of the impact.
• 8:06
  Speaker 1: We've already started to see high rates. Real estate, I
• 8:08
  Speaker 1: think it's edging up almost to 8% right now. Granted,
• 8:11
  Speaker 1: there was a time in our history where we had
• 8:14
  Speaker 1: plus double digit interest rates for real estate, but that
• 8:17
  Speaker 1: was when the time we did not see the kind
• 8:19
  Speaker 1: of appreciation in values and the inflationary comparison if you
• 8:25
  Speaker 1: look at it back then as to what it is now.
• 8:27
  Speaker 1: Huge difference there. So this would be very destructive overall
• 8:31
  Speaker 1: if that were the track going on Fed rate hike.
• 8:35
  Speaker 1: So I want to go to a clip real quick.
• 8:37
  Speaker 1: This one will go into a little bit. Should we
• 8:39
  Speaker 1: hike in September? Take a look.
• 8:42
  Speaker 3: I believe, Joe, the Fed will raise rates. The Fed
• 8:45
  Speaker 3: needs to raise rates. I think September, yes. But late
• 8:47
  Speaker 3: last year, the Fed at the time cut rates 75
• 8:50
  Speaker 3: basis points because they're worried about the labor market. It
• 8:52
  Speaker 3: seems to me that given the outlook and rates have
• 8:56
  Speaker 3: risen for the right reasons, it's real rates as expectations
• 8:59
  Speaker 3: of growth have picked up. It looks like third quarter growth,
• 9:01
  Speaker 3: current quarter growth could be up near 5 percent. If
• 9:04
  Speaker 3: that's the case, we don't need those extra rate cuts
• 9:07
  Speaker 3: last year. So I think the Fed chair knows that
• 9:09
  Speaker 3: and will cut rates or sorry, will raise rates and
• 9:11
  Speaker 3: to reverse those cuts.
• 9:15
  Speaker 1: All right, reversing the cuts based on growth. If GDP
• 9:18
  Speaker 1: continues to fly, that will be one of the narratives
• 9:22
  Speaker 1: that Warsh will work with. And if he does, this
• 9:26
  Speaker 1: will be the first true clash with President Trump. And
• 9:30
  Speaker 1: this will be something to watch. So be ready. Here
• 9:33
  Speaker 1: is a clip kind of looking at it from a
• 9:36
  Speaker 1: point of maybe Warsh got the phone call. Here's what
• 9:40
  Speaker 1: he had to say. Take a look.
• 9:41
  Speaker 3: Mr. President, Fed Chairman Kevin Warsh signaled Friday that he
• 9:46
  Speaker 3: might consider raising rates.
• 9:48
  Speaker 1: Are you opposed to this, and.
• 9:49
  Speaker 4: Have you spoken to him about it? No, I have
• 9:50
  Speaker 4: a lot of respect for him, and he'll do what
• 9:52
  Speaker 4: he has to do. I think our interest rates are
• 9:55
  Speaker 4: too high. I think that we're the leading country in
• 9:58
  Speaker 4: the world. We're now an economic force like we've never
• 10:01
  Speaker 4: been before because of what's happened. We have the greatest
• 10:04
  Speaker 4: investment ever made in any country by many times. Again,
• 10:09
  Speaker 4: we're over now $ 20 trillion of investment coming in. No
• 10:13
  Speaker 4: country's ever been there. And we're number one. We should
• 10:17
  Speaker 4: have the lowest interest rates in the world.
• 10:21
  Speaker 1: Of course, that being President Trump hitting on the whole
• 10:23
  Speaker 1: point of there's a lot to sustain the fact that
• 10:26
  Speaker 1: you don't need to raise rates. This, of course, is
• 10:28
  Speaker 1: him campaigning for Warsh not to do it. But we
• 10:32
  Speaker 1: will see in a couple of weeks how it's going
• 10:33
  Speaker 1: to play out. Now, there is another theory out there,
• 10:37
  Speaker 1: and it's an interesting one. Let me read it to you.
• 10:39
  Speaker 1: It's if you're a macro investor, connect the dots for
• 10:42
  Speaker 1: a second. Markets are pricing in September hikes. That's what
• 10:45
  Speaker 1: everybody's looking at. Yields are surging. We've seen that. The
• 10:49
  Speaker 1: consensus is completely taking the bait. Drunken Miller, who literally
• 10:53
  Speaker 1: trained both Warsh and Besson, publicly takes a swing at
• 10:58
  Speaker 1: Besson's bond market interventions. We talked about that last week.
• 11:01
  Speaker 1: Besson then plays along, fires back. Meanwhile, Warsh and Drunken
• 11:04
  Speaker 1: Miller wrote this piece calling the Fed to hold off
• 11:08
  Speaker 1: on hikes in 2018. So this was a masterclass. This
• 11:12
  Speaker 1: was during 2018 when this happened. This was a masterclass
• 11:16
  Speaker 1: in narrative control. So Warsh gets styled as the uncompromised
• 11:19
  Speaker 1: hawk to buy the central bank maximum market credibility, even
• 11:22
  Speaker 1: though everyone knows the core mandate now from Trump is
• 11:27
  Speaker 1: to cut rates. So you got Trump throws him a bone,
• 11:29
  Speaker 1: gets a deal with Iran. This is where it breaks down.
• 11:32
  Speaker 1: Why would Iran do a deal with the U.S. prior
• 11:37
  Speaker 1: to the midterms? Knowing the amount of pain this would
• 11:40
  Speaker 1: inflict on the administration and if they lose the Senate
• 11:44
  Speaker 1: and the House. Why would they do that? I just
• 11:47
  Speaker 1: don't see that unless there is some sort of unbelievable
• 11:52
  Speaker 1: move here around operational, you know, crush their bank account,
• 11:57
  Speaker 1: because that's the only way that it would even get close.
• 12:00
  Speaker 1: And I just don't think there's enough time. So maybe
• 12:03
  Speaker 1: this was a last ditch effort out of the White
• 12:06
  Speaker 1: House to try to get something moving in this direction
• 12:09
  Speaker 1: to maybe consider position for Iran to get out of.
• 12:13
  Speaker 1: I just don't know if this can happen. If it does,
• 12:15
  Speaker 1: it would be the ultimate end around that would start
• 12:19
  Speaker 1: to move the markets in a very, very good way.
• 12:23
  Speaker 1: That's for sure. If we get a deal with Iran,
• 12:25
  Speaker 1: the markets are going to absolutely boom. So if it
• 12:29
  Speaker 1: happens after the midterms, end of year, okay, that's fine.
• 12:33
  Speaker 1: Let's see if that happens then. Balance of power, though,
• 12:36
  Speaker 1: is shifting now. And it is looking like you're going
• 12:39
  Speaker 1: to see a sweep by the Democrats of right now
• 12:43
  Speaker 1: holding it at 51%, just right there, edging above. And this,
• 12:48
  Speaker 1: of course, gets into the situation of controlling the House
• 12:50
  Speaker 1: and controlling the Senate. The other thing that this controls
• 12:54
  Speaker 1: is the narrative. And this is where it concerns me,
• 12:57
  Speaker 1: is because the amount of hearings and actions you're going
• 13:03
  Speaker 1: to see of both the House and the Senate going
• 13:06
  Speaker 1: after I think mostly the Trump administration's deals, and that's
• 13:12
  Speaker 1: going to include World Liberty Finance, you're going to deal
• 13:14
  Speaker 1: with a whole slew of companies correlated to that, and
• 13:18
  Speaker 1: possibly even companies that have been supporting the president. You're
• 13:21
  Speaker 1: going to see possibly a whole shift of interesting hearings
• 13:27
  Speaker 1: coming up in the fall and next year. And this
• 13:29
  Speaker 1: could be bad for crypto because it could highlight crypto
• 13:32
  Speaker 1: in a not so positive way. Last up here is
• 13:36
  Speaker 1: Prime Minister Carney says Canada will restart trade talks with
• 13:40
  Speaker 1: the U.S. when Americans stop doing memes. And of course,
• 13:45
  Speaker 1: what do Americans do? They do memes. So it just
• 13:50
  Speaker 1: simply does not gonna, I don't think we're ever gonna
• 13:53
  Speaker 1: get a deal with Canada. Canada is gonna have to
• 13:56
  Speaker 1: become the 51st state in some way in terms of
• 13:59
  Speaker 1: a meme. So What do you guys think? Is Canada
• 14:03
  Speaker 1: just a lost cause? Are we dealing with that? Or
• 14:05
  Speaker 1: is it just a situation where this administration loves to
• 14:08
  Speaker 1: play games? We're going to be covering this because this
• 14:10
  Speaker 1: is a hot topic for the next two weeks. And
• 14:13
  Speaker 1: that is this rate cut or rate hike is in
• 14:17
  Speaker 1: the balance. If you like this video, hit like and subscribe,
• 14:26
  Speaker 1: drop a comment down below, and also join our free
• 14:29
  Speaker 1: private member group. The link is in the description.