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THE FED JUST RAISED INTEREST RATES
For the first time since 2023, the Federal Reserve raised interest rates by 25 basis points, potentially marking the end of the rate-cutting cycle. Inflation remains above target, the labor market is still relatively strong, and policymakers appear to believe the economy can withstand higher borrowing costs.
WHY INFLATION IS STILL A PROBLEM
Producer prices and consumer inflation have remained elevated, while higher energy prices continue adding pressure throughout the economy. As long as inflation stays stubborn, the Federal Reserve has less room to lower rates—and potentially more justification to keep them higher for longer.
THE BOND MARKET IS ALREADY RAISING RATES
The Federal Reserve directly controls short-term rates, but longer-term borrowing costs are determined largely by the bond market. Treasury yields have already moved substantially higher as investors demand greater compensation for inflation, government borrowing, and long-term uncertainty.
WHAT HIGHER RATES MEAN FOR STOCKS
Stocks have spent much of the last few years benefiting from expectations of cheaper money. Strong economic data can now work against the market if it gives the Federal Reserve more room to maintain higher rates. At the same time, elevated bond yields increasingly compete with stocks for investor capital.
THE HOUSING MARKET IS FEELING IT
Mortgage rates have moved higher while housing inventory has increased, giving buyers more options in certain markets. Some cities are already experiencing year-over-year price declines, although historically higher rates alone have not necessarily caused home prices to fall.
WHY LOWER RATES DON’T ALWAYS HELP HOUSING
Interest rates typically fall when economic conditions are weakening. That means lower mortgage rates can arrive alongside slower job growth, falling inflation, or recession concerns—which may offset the benefit of cheaper financing.
ANOTHER RATE HIKE COULD STILL HAPPEN
The Federal Reserve’s economic projections suggest that rates could remain elevated, with the possibility of another increase before the end of the year depending on inflation and economic data.
WHAT HAPPENS NEXT
The economy appears to be heading toward one of two very different outcomes: persistent inflation, higher debt, elevated interest rates and continued market volatility—or a major productivity boom driven by artificial intelligence that allows economic growth to catch up with today’s valuations.
WHAT I’M DOING
Rather than trying to perfectly predict every Federal Reserve decision, I’m sticking with a long-term strategy: consistently investing, dollar-cost averaging through volatility, and paying close attention to inflation, oil prices, Treasury yields, employment and economic growth.
For business inquiries, you can reach me at grahamstephanbusiness@gmail.com
Timestamps:
00:00:00 – The 2026 Rate Hike
00:01:19 – Rising Inflation
00:02:58 – The Stock Market
00:05:35 – Protecting Your Information
00:07:26 – The Housing Market
00:10:47 – Prepare For Higher Interest Rates
00:12:32 – How To Prepare
*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.
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