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The Peter Schiff Show Podcast
The Great Rate Cut Rug Pull - Ep 1000
Dec 19, 2024
Jerome Powell's recent interest rate cut sends shockwaves through the stock market, leading to significant losses. Peter dissects the grim implications of rising inflation and government spending on the economy. He questions the perceived strength of the U.S. market, spotlighting record-high deficits and anticipated downturns. In the backdrop, the volatile behavior of cryptocurrencies adds another layer of complexity. With skepticism toward Federal Reserve policies, Peter warns of potential turbulence ahead for both housing and financial markets.
59:08
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Quick takeaways
- Jerome Powell's 25 basis points interest rate cut led to significant stock market losses, highlighting investor anxiety about future economic stability.
- Despite claims of a strong U.S. economy, indicators such as high deficits and negative job revisions reveal underlying vulnerabilities in growth prospects.
Deep dives
Market Reactions to Interest Rate Changes
The Federal Reserve's recent decision to lower interest rates by 25 basis points led to unexpected turmoil in the stock market, with notable drops across various indexes. Despite the anticipated cut, the Dow Jones experienced a significant decline of over 1,100 points, marking its longest losing streak since 1974. This trend reflects a broader concern that the markets had not fully absorbed the implications of a slowing path for future rate cuts, which Powell indicated could be far fewer than previously projected. The combination of rising inflation and higher interest rates creates a conundrum for investors, who had been banking on lower rates to sustain market momentum.
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