The Fed Cuts Rates by 0.50% — What You MUST Know
🐪 Hump Days Newsletter ➭
Earlier today, the Federal Reserve cut their benchmark Federal Funds rate by 0.50%. Here's what you must know and the impact of interest rates on the economy, stocks, bonds, cash, mortgages, etc.
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Hello 👋 I’m Humphrey, I used to be a financial advisor, worked in gaming/tech, and started my own eCommerce business. I make practical, rational content on investing, personal finance, the news, and much more with a data-backed approach. My goal is to help you with financial literacy and creating wealth.
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⏱️ Timestamps:
0:00 – Start Here
1:08 – What Are Rate Cuts?
4:06 – Impact on Stocks, Bonds & Cash
7:26 – Impact on Mortgage Rates
10:18 – Impact on Credit Card Debt
Make sure to check out our free newsletter! The Hump Days Newsletter ➭ https://humpdays.substack.com. Also I realized the background music with airpods/headphones in might be a bit loud, if thats the case please watch with speakers. We will fix moving forward, thanks!
Fed Rate Cut, just in time for the Election. Er, selection.
Thank you for such a fast update video!
You are so welcome!
Did you keep this in your pocket? Did you make multiple videos to cover each scenario? lol love it
Should I buy stock now or wait some more time?
check out the data surrounding it in the video!
“Time in the market out performs timing the market “
Just buy some from time to time, do not all in in one day. This is what I learned from previous experience.
Dollar cost average.
You are already behind the game. Wait till the market tanks and then buy. Buy low, sell high…
Cutting 50 points means the Fed indirectly admits the economy is close to recession.
Yeah, but that was the plan from the start. Raise rates as high and as long as the market can bear, then ease it off when the market starts struggling to bear it.
Exactly. It’s clearly spooked about the labor market which is not a good sign. I see stocks hitting a snag soon.
Haven’t we been close to a recession for months if not years now??
@@nathanrice7352 if the Fed just wants to ease it off, they should cut 25bps instead of 50bps. They cut more because they think the economy is in recession.
@@jrb3158honestly, I think it’s already in recession 😂
Good bye HYSA
rest in high-yield peace… jk i will miss my 5% rate
@@humphrey yep me too. Now where do I put my emergency funds? In voo
@@appleztooranges Even if HYSA interest rates drop below 4% It’s still smart to keep your emergency fund in cash rather than stocks. It’s not an investment, it’s insurance.
@@bribradt3450 ok. I’m confused
@@appleztooranges NO, emergency funds need to be liquid and easily accessible. Keep it in a HYSA.
As an MBS pricing analyst, you nailed the mortgage part. Investors already priced in the rate cut and rates did not move at all today. Refi boom already started 3 weeks ago.
Great to hear!
My sister is looking to refinance think now is? She was in at 7 percent. I do t think we will go below 5 and advising her to just get in at the 5.6 no points. Thoughts?
@@TheKurofaust you could have gotten a 5.625% interest rate last week before the Fed cut rates today through a wholesale mortgage, I looked it up. Sooo… yes I think it will go close to 5, and below 5 probably in the next 6 months-year
@@TheKurofaust yeah definitely.
@@humphrey wow does that mean her rate makes sense to move now or wait later next year? I don’t think we will see rates around 4 percent for next year and will float around 5 percent.
As a 20 year old european I’m both scared and excited about a recession because for long term investing I guess buying in a recession is a good thing. On the other hand, we will probably also feel this in Europe and hopefully this won’t influence my later job when I’m graduated.
Doesn’t mean nor do anything, inflation will remain high.
Remember folks. Powell said he sees no recession. Economy is still strong. Confidence that inflation will go down. Basically he declared victory.
I hope you know he’s lying.
A recession has nothing to do with you or me or how our lives our going. A recession is negative GDP. Corporations are still raking record profits, which means positive GDP. Also, inflation has gone down. Are you mistaking inflation going down with deflation? Prices are never going to come back down. They will almost always go up. It’s just a matter of how quickly they go up.
If the economy was strong there would be no cuts at all.
@@stockeyI hope that you know he’s a normie that looks like Steve Jobs but dumb one and takes his news from cable news media. 😊
I remember when they said stuff like that in 2006 and 2007….
House prices are going to go insane.
Good
u mean up or down?
@@user-jp6wf9nj9dup
@@user-jp6wf9nj9dup, unfortunately
@@user-jp6wf9nj9d up
is there a way to remove the ambiant music.. i find it really distracting
Sorry, its just on headphones for this video that the audio is loud. apologies
Press the mute button and read the transcript notes.
It’s not terrible but it’s a little loud. 🙂
Is now a good time to refinance from a high 6 mortgage rate? Or wait for rates to hopefully drop even lower?
id wait a little longer… see if they rate cut once or two times more.
The fed will likely be cutting rates all through 2025 probably 4-6 more rate cuts to come
Definitely wait. The money you’ll pay to refinance vs what you’ll save per month will make no sense. Late 2025 will probably be the time to refinance.
Big H dropping the IMPORTANT FACTS
WOW thanks Taylor!! always can count on you for an early comment!
@@humphrey Earlyish🐢
Woohoo! My credit card interest rate will drop from 21% to 20.5%.
.5 percent is a lot in the grand scheme of. Just like AUM percentages.
If that matters, you’re already in big trouble.
Never carry debt. It’s in the bible, afterall.
Maybe.
For real unless they add hidden fees to regain those losses
I’m happy I just got a promotional interest of 6.25%!
😂
Mortgage rates as well as gas prices are always go down before reelection
Even the powell was hired by Trump???
Skeptical. Everyone seems to have forgotten that the last couple of months all we’ve seen is big money increasing their cash positions. The economy is not healthy. Sure, lower interest rates make it a good time to borrow money, but I still think the general sentiment is that things are going to get bad. Markets might rally a little bit because of the lowered interest rates, but I think we are still in for a bad time here pretty soon.
Nah we’re just in time for rate cuts, soft landing here we come
@@FutureDreamZz idk… slowly cutting rates seems to be fine, but almost every time the fed rapidly cut rates it was because recession. Look up a chart that overlays the federal funds rate with the S&P and you’ll see.
Interest rates go down during an economic downturn usually to spur more investment and consumerism. So with that in mind, lower rates usually equate to a slowing economy anyways. It was only high as heck this past 2 years because the economy and inflation numbers were booming too much too fast (these two are highly correlated aside from supply shocks like the 70’s oil crisis), so it was done to slow down the economy.
Now that its slowed down, its time to cut rates again to avoid a “hard recession”, and get a soft landing. We likely won’t see near 0% rates, because that would imply a very bad economy (ala Japan).
It sounds like elections getting closer 🤣😂
Lovin my 3% mortgage.
Love that debt.
@@Joe-ti7qd There is a difference between good and bad debt. A house at 3% is great debt.
Nobody asked
I’m loving my 2% mortgage on a 15 year loan. Unfortunately, I’ll never get out of this townhouse because even townhomes are going for half a million. Ridiculous. I’d rather have higher interest rates and significantly lower housing prices like back in the 80s than what we have now.
3% was ultra normal just a few years ago. You and millions of others have 3%. So it’s nothing to brag about but it’s definitely good to have 3%.
Rates go down—>ppl start buying more houses—>inventory is low—>housing crisis deepens, and plot thickens. Am i getting this right?