Video by Graham Stephan via YouTube
Source
Thank you to Wealthfront for sponsoring this video! Open up a Wealthfront investment account today through my linkand get your first $10,000 managed for free http://invest.wealthfront.com/graham/ – Here is how the Federal Reserve impacts the Stock Market – Enjoy! Add me on Instagram: GPStephan
GET YOUR FREE STOCK WORTH UP TO $1000 ON PUBLIC & SEE MY STOCK TRADES – USE CODE GRAHAM: http://www.public.com/graham
NEW BANKROLL COFFEE NOW FOR SALE: http://www.bankrollcoffee.com
DOWNLOAD MY NEW FINANCIAL APP: https://hungrybull.page.link/graham
JOIN THE WEEKLY MENTORSHIP – https://the-real-estate-agent-academy.teachable.com/p/graham-stephan-mentorship-program/
THE NEW PODCAST: https://www.youtube.com/channel/UCMSYZVlQmyG8_2MkIKzg0kw
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://the-real-estate-agent-academy.teachable.com/p/the-youtube-creator-academy/?product_id=1010756&coupon_code=100OFF – $100 OFF WITH CODE 100OFF
How The Federal Reserve Impacts The Stock / Cryptocurrency Market:
First, is known as a “Balance Sheet Runoff.”
This just means that, when those Bond IOU’s mature and come due…the Federal Reserve can choose to take that money OUT of circulation, instead of re-investing it. It would be no different than them loaning you $10,000 for one year…and, then when you pay it back, they take that money – and, instead of loaning it to someone else…it’s just: *POOF*…Gone. In terms of how much this amounts to, a recent report showed that $4.5 Trillion In Purchases would “unwind” at a rate of more than $50 billion per month.
Second, is known as a “Tapering.”
See, up until recently, the Federal Reserve was BUYING $120 Billion Dollars Per Month of Treasury Bonds and Mortgage Backed Securities to “inject” more money into the economy. But now, they’re moving forward with a plan to slowly reduce that amount by $30 billion per month until – by the end of March – they’re no longer buying anything else.
And third, raising interest rates.
At the end of the day, the goal is that interest rates will begin to increase, now that the unemployment rate dropped to 3.9%. The biggest fear is that the Federal Reserve will begin REMOVING liquidity from the markets, taking excess money OUT of supply, and draining all of that sweet, sweet leverage that kept prices higher than usual.
The sudden sell-off was attributed to their comments within the FED Minutes:
It’s quoted that: “Many participants judged that the appropriate pace of balance sheet runoff would likely be faster than it was during the previous normalization episode.” …. which, is another way of saying: Our economy is doing better than expected, we have more money in circulation than expected, and inflation is higher than expected…THEREFORE, we can have faster rate hikes – and, a faster RUNOFF than expected…which, is worrying investors.
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
Graham Stephan receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for sponsored advertising materials. Graham Stephan is not a client and this is a paid endorsement. Graham Stephan and Wealthfront Advisers are not associated with one another and have no formal relationship outside of this arrangement. Nothing in this communication should be construed as a solicitation, offer, or recommendation, to buy or sell any security. Any links provided by Graham Stephan are not intended to imply that Wealthfront Advisers or its affiliates endorses, sponsors, promotes and/or is affiliated with the owners of or participants in those sites, or endorses any information contained on those sites, unless expressly stated otherwise. Investment management and advisory services are provided by Wealthfront, an SEC registered investment adviser. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance.
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice. Public Offer valid for U.S. residents 18+ and subject to account approval. There may be other fees associated with trading. See Public.com/disclosures/