The MONEY PRINTER Is Back! Powell Just Primed Markets For HIGHER

0:00Hello, everyone. The Federal Reserve and Jerome Powell, they made their big decision today. The U.S. economy is booming. We got data on why buying all-time high stock prices may actually be a good idea. And Netflix's Ryan Sorhant, he unpacks what's happening with home affordability in America. We're live today from the desk of Anthony Pompliano.

0:27Before we get into today's episode, I need your help. My goal is to get to 1 million subscribers on YouTube. That's a big, hairy, audacious goal, but with your help, I'm going to get there. 40 ,533 of you already did this, so go ahead and hit the subscribe button and let's get into today's show. Jerome Powell and the Federal Reserve decided to cut interest rates today and the money printer is back, baby. Big bad Jerome, he stepped up to the plate. He got on the press conference and he told us three things that are important. The first is 25 basis point interest rate cut. This is the third cut in 2025, and it will bring rates down and it will flood the market with cheap capital.

1:04That's good, but he should have done 50 points. Now, the second thing he said is that the government is going to start buying treasuries to the tune of$40 billion of US treasuries starting on December 12th, and they're going to execute that$40 billion of purchases in 30 days. QE's back and the asset prices in the market, they're going to love this. So we got rates coming down. We got the government back with a persistent bid and QEs on again. But one other thing was really important, and it's what Jerome Powell said, not just what they did. Take a listen to his thoughts here around the labor market and inflation.

1:38Conditions in the labor market appear to be gradually cooling and inflation remains somewhat elevated. In support of our goals, in light of the balance of risks to employment and inflation, Today, the Federal Open Market Committee decided to lower our policy interest rate by a quarter percentage point. For September, the most recent release showed that the unemployment rate continued to edge up, reaching 4.4 percent, and that job gains had slowed significantly since earlier in the year. A good part of the slowing likely reflects a decline in the growth of the labor force due to lower immigration and labor force participation, though labor demand has clearly softened as well.

2:21In this less dynamic and somewhat softer labor market, the downside risks to employment appear to have risen in recent months. In our SEP, the median projection of the unemployment rate is 4.5 percent at the end of this year and edges down thereafter. In the near term, risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation. There is no risk-free path for policy as we navigate this tension between our employment and inflation goals. A reasonable base case is that the effects of tariffs on inflation will be relatively short-lived, effectively a one-time shift in the price level.

3:02Our obligation is to make sure that a one-time increase in the price level does not become an ongoing inflation problem. But with downside risks to employment having risen in recent months, the balance of risks has shifted. Our framework calls for us to take a balanced approach in promoting both sides of our dual mandate. Accordingly, we judged it appropriate at this meeting to lower our policy rate by a quarter percentage point. Now it's great to see the man behind the curtain sitting there just pulling all the strings and telling us exactly what everyone already knew. The U.S. economy is addicted to cheap money.

3:37We need lower rates. We need money printing. And we need all of that in order for asset prices to go up. Their deflationary forces are going to smack the U.S. economy in the face. And Jerome Powell, he may be kicking and screaming, but the man is going to bring QE back. Asset prices in your portfolio, they should send Jerome Powell a Christmas gift. He's Santa Claus this year. because baby, he's bringing all the liquidity back in the market and we're going up into the right from here. The American economy is booming. I don't care what anybody else is saying. At least that's what the GDP numbers are telling us.

4:13U.S. GDP grew 3.8 % year over year in Q2. That's a big number. In the Atlanta Fed, they're estimating that Q3 growth is gonna be between 3.5 and 3.8%. Now, historical context is important if you wanna understand the magnitude of these numbers. The average GDP growth for countries all around the world it's approximately 2.9 % year over year. In the United States, we've outperformed. For the last 80 years, we grew GDP on average 3.2 % annually from 1947 to 2025. So what's driving the good times right now? Well, the answer is very simple. Artificial intelligence, AI, baby. Adam Kobay say, he shows that approximately 63 % of all GDP growth is coming from AI-related spending.

4:54This means that without the AI CapEx boom, the US economy would be in a significantly worse position. I don't think that's really that surprising. This AI-related spending can be best visualized by looking at data center spending since 2020. Kobay say, he writes that spending on data centers in the U.S., it has tripled since the release of ChatGPT in November of 2022. Now, spending on structures excluding data centers is actually down 20 % since the 2023 high. The strength of technology companies has created two economies in the U.S., according to Adam. Now, speaking of these two economies, compare the explosion in AI-related spending with the fact that U.S.

5:30small business bankruptcies, those reached a record 2 ,221 year to date. That's up 83 % over the last five years. No bueno. These bankruptcies reflect high borrowing costs, it's cautious consumer spending, and economic pressures that disproportionately are affecting these smaller businesses. Now, this second economy also saw U.S. employers announce 1.2 million job cuts in 2025. That's the second highest in 16 years. Again, no bueno. These job cuts create a paradox. where labor market deterioration is coinciding with the S &P 500 adding$17 trillion since April. Think how crazy that is. Small businesses are going bankrupt and more than a million people lost their job.

6:10But U.S. corporate profits hit record highs in Q4 amid strong demand and pricing power. If you looked up the definition of opposing outcomes, you'd find these data points front and center. They expose inequality between corporate performance and worker outcomes. And people are wondering, why is that happening? Now, plenty of people, they're going to use this information to rail against the system. They're going to say, F the man. They're going to stoke populism and they're going to claim that the only path forward is socialism, but not so fast. We know that's not true. In fact, history shows us over and over again that economic incentives drive outcomes.

6:44Programs like Invest America, that's going to give people a stake in the capitalist system. It's going to provide a financial headstart for millions and millions of young people. And here's the thing, this might actually be shocking to you. The data shows that young people, particularly in Gen Z, they may be much more enthusiastic about financial markets than you would assume. Gen Z is starting to invest earlier than previous generations. About 54 % of that cohort, they're beginning to invest by age 21. It's compared to only 31 % of millennials or 27 % of Gen X by that age. And additionally, 63 % of young adults view the stock market as an excellent wealth builder.

7:21Gen Z favors stocks. Millennials, they like crypto. That's their primary investment. But what is maybe more interesting is that younger generations are nearly three times more likely to hold speculative assets that include stocks, crypto-related stocks, and day trading. So what's my big takeaway from all of this, all this data, all these trends? Well, there's pockets of great data in the economy and in financial markets, but these big trends like AI, they're covering for areas of weakness. But I think that that's normal. It's nothing that hasn't happened before. There are people that are claiming everything is great and there are people claiming everything is horrible.

7:56Both of the groups are right. But maybe the real lesson here is that we should trust the kids. They're enthusiastic. They're pouring their capital into financial markets. They see value in artificial intelligence, Bitcoin, crypto, robotics, prediction markets, and much more. These young people are predicting the future. We should all just make sure that we're actually listening to them. All right, ladies and gentlemen, are you ready to have your mind blown? I got data that is going to be a narrative violation. Creative Planning's Peter Malou, he says that since 1989, money invested when the market is at all-time highs has actually outperformed money that was invested on any given day.

8:35That's right. Buying all-time high stock prices has actually done better than buying on any other day in the market. Momentum's a real thing. And this data proves all the people yelling and screaming about bubbles, maybe they don't realize that history tells us buying all-time high stock prices over a long period of time is actually better for your portfolio. Every once in a while, I hear a data point that just sticks with me. And I recently heard this from Ryan Serhan. Now, Ryan runs a big real estate brokerage. He's a luxury real estate agent. He's got a Netflix show. He's a celebrity. He's a businessman and he's an investor.

9:09But Ryan went on television and he talked about home affordability in America. And he said something that really stuck out to me, that first-time homebuyers are actually starting to buy homes, but it's because they're getting money from the baby boomer parents. Take a listen. There's a cost of living for everybody. You're either paying rent or you're paying property taxes. You know, you're paying interest on loans. And sure, if you're making a big bet on appreciation, which we do in our business all day long, it is much better to own than it is to rent. But you don't have to. I think the American dream is a happy life defined by growth and success, whichever way you determine your success.

9:50I think that the strain on the new American family is a massive issue. People can't afford to buy houses, sell houses, have kids. And I think that, yes, demand remains. remains. Like there's a lot, you know, first time homebuyers, like I said, are the strongest market we have right now, in part fueled by baby boomers who are paying cash so their son or daughter could have a house. But I think affordability needs to be redefined. Ownership needs to be redefined and people just need to adapt. Now, everyone knows home affordability is bad and everyone keeps yelling and screaming about the median age of first time homebuyers.

10:29But Ryan's got a good point here. As these baby boomers either pass away or help out their kids, First-time home buyers are coming back to the market, so this is going to be something that's worth paying attention to. That's it for today's show. Thank you guys so much for watching. Remember, I need your help. You help me help you. That's how this works. Hit the subscribe button, and I'll see you guys live tomorrow from the desk of Anthony Pompliano.