How to Invest in 2026: Don’t Fight the Fed
Published: 2025-12-23
Status:
Available
|
Analyzed
Published: 2025-12-23
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The Federal Reserve has resumed balance sheet expansion, effectively printing money, starting with $40 billion per month from December 12th.
"The Federal Reserve has restarted balance sheet expansion. So, they're calling it reserve management. But at the end of the day, they're just printing money. So they're they're starting with $40 billion per month. And that already started December 12th."
Correct
A combination of falling interest rates and increased money supply is predicted to lead to a weakening of the US dollar.
"When interest rates fall and money supply increases, then the dollar often weakens."
Correct
The current administration is actively seeking a moderately weaker US dollar to support economic growth, manage debt, and ease financial conditions, as a strong dollar would negatively impact exports and economic activity.
"The current administration does not want a strong US dollar. Here's why. A very strong dollar is going to hurt exports. It's going to tighten global financial conditions, increase stress on the debt markets, and it's going to slow down economic activity. It's going to slow down GDP. But if you have the situation where you have a moderately weaker dollar, you know that in that situation that's going to support growth, it's going to help manage large debt loads and make financial conditions easier. So dollar weakness is not an accident. It's um you could call it like a release valve."
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The Federal Reserve has shifted from a tightening monetary cycle to an easing cycle, which is expected to support higher asset prices.
"We are no longer in a tightening cycle. We're in an easing cycle which supports higher asset prices."
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Increased money printing by the Federal Reserve will lead to more liquidity, which in turn will drive asset prices higher.
"But what it does is inject money into the financial system. And if you have more money, there's going to be more liquidity and higher asset prices."
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Liquidity cycles, including balance sheet expansion, are likely to last longer than commonly anticipated and typically occur in phases rather than short bursts.
"So that's why liquidity cycles tend to last longer than people expect. So this is why balance sheet expansion usually comes in phases, not in short bursts."
Pending
A weaker US dollar is expected to drive up the prices of US stocks, gold, silver, precious metals, and commodities.
"And a weaker dollar is going to help to push up prices for US stocks, gold, silver, you know, precious metals and commodities."
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The Federal Reserve is expected to intervene with monetary policy, including rate cuts and money printing, in the event of a sharp stock market decline, a phenomenon known as a 'Fed put'.
"If the stock market falls sharply, then what do you think is going to happen? It's my guess that the Federal Reserve is going to step in because we've seen this repeatedly 2008 the financial crisis, 2020 the pandemic crisis and whenever you have banking stress episodes. So that's commonly referred to as a Fed puts when the Federal Reserve comes to the rescue with their monetary policy, you know, lowering interest rates and printing even more money."
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While markets can still fall, major declines are anticipated to be met with supportive policy actions from the Federal Reserve.
"It doesn't mean that markets cannot fall. It just means that if there are major declines, they're going to be met with policy support."
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Due to unprecedented debt levels and market interconnectedness, the financial system is more sensitive to liquidity than ever, necessitating faster and larger policy responses to financial stress.
"the system today is more sensitive to liquidity than ever before. But why is that? So I just want you to think about it. Just look at the debt levels. The debt levels are higher than ever before. The markets are more interconnected than ever before. So in that type of environment, when you have financial stress in the system, it's going to spread much faster than before. So that means policy responses are going to have to be faster and even larger."
Correct
A new Federal Reserve chair in May 2026 is expected to usher in an easier monetary policy, aiming to stimulate economic activity, markets, and asset prices, particularly in the lead-up to the midterm elections.
"In May of 2026, there's going to be a new Federal Reserve chair. And of course, I can't tell you who it's going to be, but what matters is that this new leadership usually brings a shift in tone and priorities. And the shift is going to be towards an easier monetary policy, definitely not a tighter one. And they're going to want to run it hot, the economy, the markets, even inflation. They're going to want to boost the economic activity and asset prices going into the midterm elections."
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In an environment of falling rates, increasing liquidity, a weakening dollar, and Federal Reserve intervention, investments and asset prices are expected to benefit, with dips likely to be bought despite potential pullbacks and volatility.
"In a world where rates are falling, liquidity is increasing, the dollar is weakening, and the Federal Reserve stands ready to intervene, investments, asset prices, they're going to stand to benefit. This doesn't mean that investments are going to go straight up. I mean, you're going to see pullbacks. You're going to see volatility. But in liquidity rich environments, dips tend to be bought."
Correct
The speaker plans to remain invested in 2026, buying any dips, rather than withdrawing funds to avoid inflation or waiting for a market crash, given the favorable tailwinds.
"I'm going to stay invested and you as you know and because a lot of people have followed like I've made a lot of money in my investments in 2025, but I'm not going to take money off the table and lose to inflation. Not in 2026. And I'm not going to wait on the sidelines hoping for a crash in this type of setup in this type of environment. If there's going to be any dips, then I'm going to buy the dips."
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The speaker suggests that the potential for market growth is tied to the ongoing money printing by the government, implying that as long as money printing continues, markets are unlikely to decline significantly.
"how much higher can these markets go up? And I'm going to answer by asking you, well, how much more money can the government prints? And are they going to stop anytime soon? Like, I don't think so. And if they don't stop printing, then why should the markets come down?"
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