THE FED JUST HIKED RATES *AGAIN* | Major Changes Explained
Graham Stephan Graham Stephan
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 Published On May 4, 2022

Let's talk about the latest Federal Reserve Rate Hike - Enjoy! Add me on Instagram: GPStephan | GET MY WEEKLY EMAIL MARKET RECAP NEWSLETTER: http://grahamstephan.com/newsletter

THE FED RATE HIKES - 2022:
The Federal Reserve JUST hiked interest rates 50 Basis Points - and signaled that they're open to further 50 Basis Points Hikes in the future. The concern was that we could have had what's known as "The Volcker Shock."

Paul Volcker was tasked with the goal of bringing DOWN INFLATION…and, after securing his position in the federal reserve, “he announced that he would start limiting the growth of the nation’s money supply. As money became more scarce, banks would raise interest rates, limiting the amount of liquidity available in the overall economy.”

HOWEVER…the end result was that, interest rates quickly jumped as high as 20%….the United States fell into a deep recession…unemployment surpassed 10%…and stock and real estate values PLUMMETED….but, hey…at least on the bright side…by 1983, Inflation dropped below 4% as the economy began to recover…so, that’s good…right?

In a PERFECT WORLD….the Federal Reserve can slowly increase rates, inflation gradually begins to decline, and the economy shakes it off like Taylor Swift to continue moving forward…but….they don’t have the best track record of doing that.

Now, every time period is going to be different, and every situation is going to be unique…but, with the Federal Reserve having a history of Hard Landings…I think, the best thing we can do, is stay employable…make yourself indispensable as possible, IF we see a recession, keep a 3-6 month emergency fund at all times, only take FIXED RATE DEBT if you’re buying a house, or a car….and, only make investments that you plan to keep for at least 7-10 years.

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