BREAKING NEWS: The Federal Reserve’s looming interest rate decision is more complex than it appears, tied deeply to the banking crisis and the 2024 election. While many believe rates won’t be cut, the true story involves the U.S. Treasury’s bank buyback program and the escalating national debt. In an election year, political pressures could heavily influence the Fed’s actions, prompting urgent consideration of the broader economic implications.

TRANSCRIPT:

Hi everyone. Thank you for being here. Big news today involving the Federal Reserve. The banking crisis and the 2024 election. All wrapped up into one.

While 96% of Americans are convinced that the Federal Reserve will not be cutting rates tomorrow at their meeting, not enough people are talking about the real reason why. Now, I saw an article that says inflation data this week could help determine a Fed’s timetable for rate cuts, saying that the Federal Reserve is waiting on this week’s CPI numbers, which will be released a couple hours ahead of their meeting tomorrow.

Now, to be honest, I just don’t buy it. And there’s a couple reasons why involving us and the election, which we will definitely get to. But first things first. While yes, of course, inflation is very important and there’s a reason we’re keeping rates up and it’s to fight inflation, there are other reasons at play.

The mainstream media is hyper focused on inflation, but it doesn’t tell the real story.

While the Federal Reserve would love for us to look over here at all that they’re doing to fight inflation, keeping rates high, quantitative tightening by running off their balance sheet, all anti-inflationary measures over here. We have the United States Treasury doing a bank buyback program and the United States debt continuing to rack up a deficit, both of which we know are inflationary practices.

So which one is it? We’re doing one thing over here to help inflation, and we’re doing another over here to hurt it? I mean, the bank buyback program, if you’re not familiar with it, is the U.S. Treasury buying back bonds at above market value to help struggling banks with liquidity. And we know that these banks have a serious liquidity problem because just last week, the FDIC, the Federal Deposit Insurance Corporation, announced that there were over 63 banks in trouble with over half $1 trillion of unrealized losses in the form of these bonds and securities that had lost value.

So this is a way to kind of work around keeping rates higher for longer and making sure that banks have the liquidity that they need. Another way you could say this is printing more money, because essentially that’s what you’re doing when you’re buying these bonds from banks at a rate that’s above the going market value. It just it doesn’t make any sense.

And the United States debt, at the rate that we’re continuing to spend doesn’t make any sense to me either. What does make sense, however, is not just that they’re waiting for inflation data. No, what makes sense to me is that they’re keeping rates higher for longer also to help with this debt. Now, I’ve talked about this before, but I think it’s really, really important that everyone understands.

While it might seem counterintuitive to keep rates higher for longer when we have a lot of debt because you think if rates are lower, it’s cheaper to finance the debt, which yes, that is true. But the piece that a lot of people are missing is that one third of all U.S. debt is maturing this year, at which point the government can either pay it off, which we know that’s not going to happen, or they can roll over the debt.

Now, if they roll over the debt, it essentially means that they need to find new buyers for the debt. This comes at a time when we don’t have a lot of options. People have said, oh, there will always be demand, there will always be demand. But foreign central banks are actually not buying up as much U.S. debt as they used to.

Demand is lower, which means that we have to find buyers for this debt. And how do we do that? We make the debt look more favorable. And how do we do that? We keep interest rates high because the higher the interest rates, the more favorable that debt is for buyers. So for me, the way I’m looking at this is we need to make sure if I’m the United States government, that that debt is bought in one way to do that is keeping interest rates high.

I think that’s a big thing that’s at play here that they’re not talking enough about in the media, because they don’t want anyone to worry about the debt. Remember the debt’s not a big deal.

Please give me a break. Of course, the debt’s a big deal. You and I know that. But they don’t want everyone else to know that or to worry about it.

Now, the other thing that’s at play here that I mentioned earlier is, of course, it is an election year. And this gives the Fed a lot to think about. Now, I saw yesterday three Dem Senators urged rate cut at upcoming fed meeting. And they claim that this is because it’s hurting the American people, which no one wants. High rates of course. Just from a personal level.

But it’s clear that if rates were to come down, it would obviously be a win for president elect Biden for reelection bid, because we know that he has very low approval ratings right now, primarily around the economy. People are not happy. And if rates were to come down, maybe it would change sentiment.

But on the flip side, there is another article that came out yesterday saying political heat gives central bankers pause for thought on interest rate cuts, essentially saying that their hands are tied. Because if they were to cut rates, it would look like favoritism.

If they don’t cut rates, maybe it’s looking like favoritism. Either way, they’re in a pickle here if they raise or if they lower. Now there’s a part of me that honestly actually thought that interest rates might be going up, but now I’m inclined to think maybe they’ll just hold steady because of the election. If they were to actually

make rates go up, then it might look like the Federal Reserve is being more favorable towards President Trump because no one would be happy with President Biden.

So they’re in a bit of a pickle here, because either way, any move they make is going to be seen as political, whether it is or is in reality. We don’t know. I mean, tell me what you think below. Do you think that any of these rate cuts has to do with the Presidential Election? Do you think it has to do with the Government Debt, or do you think it’s just Inflation?

I would love to hear your thoughts, because I don’t think enough people are really talking about what’s going on. I think everyone’s very content to just sit there and say they’re waiting to see what happens with inflation. And if you ask me, they already know what’s going on with inflation. They already know that the CPI numbers that are going to be released, most likely aren’t going to be as accurate or tell the full story of how bad inflation really is.

You and I know anyone who’s been to a grocery store knows. Now with the CPI numbers, with the Federal Reserve’s meeting happening tomorrow, I’m sure we are going to have a lot more to talk about. So I will be keeping you updated as things progress. But in the meantime, I think it’s important.

Again, we keep our eyes open and we dig a little bit deeper into what’s really going on and why, most importantly, why. Because that’s going to set us up where we can have more foresight to understand not only what’s happening right now, but what’s going to be happening in the future. And if you have any questions or you want to learn more about how you can protect yourself outside of all of this mess, outside of the system, that is what we are here for.

You can click the link below to talk to one of our Expert Analysts. In the meantime, like, subscribe if you’re not already. I appreciate you being here. As always, I’m Taylor Kenney with ITM Trading. Your trusted source for all things gold, silver and lifelong wealth protection. Until next time.

SOURCES:

https://apnews.com/article/federal-reserve-inflation-prices-interest-rates-cuts-bdc7b2c3fd2b8fa736cae737124c8870

https://sg.news.yahoo.com/three-democratic-senators-urge-federal-173104873.html

https://www.ft.com/content/a645ecf3-eeca-4239-aa4c-17e6a9c271f3