THE FED JUST RESET THE MARKET - Stocks Hit All-Time-High, Interest Rates Skyrocket!

What's up you guys? It's Graeme here and I got to say this is absolutely crazy. Believe it or not, the market is now pricing in the chance of an upcoming rate hike for the first time in more than 3 years. This means the entire financial system is about to repric and no one's prepared for what's about to

happen next. After all, starting now, mortgage rates have already begun going higher. Credit card debt becomes more expensive. Every single borrower gets squeezed. And the only people coming out ahead are those sitting in cash getting paid higher interest while everyone else pays the price. That's why we have to

urgently talk about exactly what just happened, the impact that higher interest rates are going to have throughout our economy, and then most importantly, what you're able to do about it, because the next few weeks could really determine who's able to benefit from this new environment and

who gets absolutely crushed. Although before we start, as usual, if you appreciate videos like this, it would mean the world to me. Hit the like button and subscribe if you haven't done that already. Yes, I know it's annoying when I ask for it. I don't like asking for it, but it does help tremendously.

And as a thank you for doing that, here's a picture of a pony. So, thanks so much. And also, big thank you to SoFi for sponsoring this video, but more on that later. All right, so most importantly, let's get the basics out of the way and talk about rising interest rates. As a really quick background for

those unaware, the Federal Reserve raises interest rates in a way to help combat inflation with the mindset that the higher those rates go, the more expensive it is to borrow. And the more expensive it is to borrow, the less people spend, and therefore the slower prices rise. Like, truth be told, what

many people forget is that in very small doses, inflation is actually encouraged, and when it's under control, it could actually be a good thing. In fact, the United States has really done their best to maintain a safe, stable, and consistent inflation rate of two to three% over the last 25 years. The

problem, however, is when that inflation begins to grow out of control like we are beginning to see today. For example, oil prices recently surpassed $100 a barrel. Other countries have begun dumping US treasuries, pushing the long-term rates higher. And with inflation now returning in a way that

almost no one thought was possible a year ago, the Federal Reserve is forced to step in, threaten higher interest rates, and almost crash the market in a way to rebuild stability. Which brings us to the very first impact of the stock market. On the most basic level, as interest rates increase, stock prices

generally decrease because the higher cost of borrowing eats away at the value of future cash flow. And as a result, we see stock market valuations go down.

kind of like what we saw in 2022. On top of that, the higher interest rates go, the more bond yields increase and the less appealing everything else looks in comparison. After all, why take the risk in the stock market to maybe make 7%.

When you could get a guaranteed return from the government at 5% with pretty much no risk whatsoever. However, in terms of how much this affects stock prices, here's what I actually found the most interesting. There's a study out there that broke down investors into two categories. One considered the choice