In today's episode, Tyler breaks down a whirlwind of market-moving headlines and the stock market's reaction to them. From Trump's bold pre-FOMC remarks to J Powell's press conference, Tyler covers it all. Plus, we will break down today's industry-defining moment for Digital Assets with the passing of the GENIUS ACT. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Wednesday afternoon, everyone. Tyler Herriage here with you for today’s VRA Investing podcast with a special edition podcast today for the Federal Reserve. No, no, I’m just kidding. I wouldn’t do that to you here. If all I did was cover the Federal Reserve in a podcast. What a boring podcast that would be. But we did have the latest FOMC meeting today, and the Fed continues to control our country’s monetary policy. So it’s important, in our view to spend a few minutes covering it here.

And there were a few high notes from the meeting today, few medium, but really, overall, another interesting day for our market. So we’ll get into some of the headlines throughout the podcast, but we’ll lead here with the Federal Reserve because the real buzz was created this morning. And of course, you might be able to guess who the buzz was created by. None other than the best to ever do it really, than Donald J. Trump. President Trump this morning just relentlessly going after Jay Powell ahead of, you know, the FOMC meeting today while the meeting was going on. So the minutes hadn’t come out yet, nothing, you know, so no one really knew for sure what the Fed was going to do today, although it was a certain, almost certainty, 99.9 certain that they were going to leave rates unchanged. Now, Trump being Trump, he said this a few times when asked about what Jay Powell should do today, you know, said, I think he should cut by at least a full percentage point here.

[00:01:53]:
But he went on to to go even further, right. When asked about it again, where he said, you know, really, Jay Powell should I, I think he should really be cutting by two, maybe even two and a quarter right now, which is even more aggressive than where we’ve been. And we’ve been, you know, some of the biggest proponents of rate cuts from the Fed here for some time now. So certainly that was a big number there from Trump to throw out. Maybe he’s working on the negotiating side. You know, if he bumps it up from one to two, maybe they meet somewhere near the middle at, you know, 75 basis point cut, you know, three quarters of 1%. Who knows, who knows what he’s going for here? And Hank Trump even kind of said that to the media today, that, that essentially Jay Powell will not be have a job as the Federal Reserve chairman, as the chairman of the Federal Reserve, you know, likely this time next year. Right.

Maybe even eight months away from that process. You know, he’s already nominated current Treasury Secretary Scott Bessant for that role potentially in the future. Uh, so Trump just said, you know, we’ll see what we can do over the next six to eight months. And really it does look like Trump is doing something on that front that could potentially lower yields here. I’ll get to that here, more in a minute. It’s really a fascinating topic. A couple of big news stories breaking on that front today. Um, so let’s just read a couple of the quotes here from Trump today because some of em are pretty funny.

[00:03:22]:
Um, you know, before I even get into it, I mean, definitely, probably the funniest president we’ve ever had. Right. So he said essentially, right, right now we have a man talking about Jay Powell who refuses to lower the fed funds rate. Just refuses to do it. And outright, outright says this is a quote and he’s not a smart person. Right. That’s, you know, he’s called him all kinds of names, but even goes on to call him stupid later in this as well. You know, that’s a step back from some of the name calling, but more, maybe more hurtful in some other ways.

You know, he went on to say that he didn’t even think it’s political. Right. It’s not Republican, Democrat thing. Jay Powell just hates Donald Trump and that’s the real reason why he won’t do this here. You know, regardless of what Trump says, whether it’s nice or nasty, Jay Powell just won’t respond. And then he went even to the next level. The reporters tried to change the topic onto Iran and Israel. And when asked if it was too late for new Iran to negotiate, Trump said, you know, we tried to do it 60 days ago.

[00:04:30]:
You’ve seen what’s happened, went on and on about that and then said, but you know, it’s not too late. The only person who is too late for might be Jay Powell. And then called him too late Powell. It might be too late for Powell. Too late Powell. And that’s t o o that’s exactly what he said. It was, you know, just this mannerisms, everything. It’s pretty funny to watch.

So the battle continues, but between Trump and Jay Powell. You know, Jay Powell really wasn’t having it. If you watched any of the presser today, which really wasn’t necessary, like I said, we’ll hit some of the high notes here for the presser. Let’s take a look at this though. Going into the meeting today, markets were higher on the day. And then as you might expect if you’re a regular listener here, if Jay Powell speaking, the Market typically finishes lower. It’s just been. He’s one of the worst in modern history as far as, you know, since we have these, you know, regular FOMC meetings that are publicized, right.

Not just the minutes being released to the public, but actually the presser and Q A being done. I believe it was started in just, I mean 13 years ago or so. I believe it’s been Bernanke. I’ll have to double check that one for you if anybody’s interested. But it is, it’s a, it’s a modern deal. So of the Fed chairman since then, Jay Powell is by far the worst performer. So take a look at this here. Bespoke put this out earlier today and about what you might expect, right.

[00:05:59]:
We, like I said, we started out higher on the day. We didn’t get this jump like we’ve seen in the past after his pressers, but we almost did get the finish of the lows of the day. That’s just not what you want to see. If you, if you saw this on a day to day action, you, you, I mean on the, on this, the all PAL meetings look gains of 0.06% flat on the day, but you’re finishing at the lows of the day, just not what you want to see. So this is just Jay Powell’s average. Like I said. You compare him to the other recent ones and it’s o. It is ugly for him there.

So again the Fed did hold rates here again today and there, there were a few noteworthy points here in the statement. So let’s get right into it here. This is, you know, one, you can find these all over online, especially on Twitter. Is great though. This one’s from Zero Hedge. Not a whole lot of changes. You know, some, some FOMC meetings. You see a page full of red when they release these, I guess, you know, PDF versions of it with the mark changes, specific mark changes in there, but two of them that are pretty specific here.

Let’s see. It looks like it might be a little zoomed in on my screen share there. So I’ll go ahead and read this for you here. You know they did take out. The outlook has increased further. You know, the uncertainty has increased further. It’s diminished but remains elevated. You know, keep in mind that keyword there, uncertainty.

[00:07:33]:
We’ll come back to that one later unfortunately. But the big one here that, that I thought was interesting was the removal of. Here we go. The. All right. So previously in their March meeting it said judges the risk of higher unemployment, higher inflation have risen so took out that part and just, you know, con consisted with focusing on their dual mandate. So that’s scrapping, you know, the stagflation warning that they have had here for some time. But then, so, yeah, from that point of view, it’s good, right? We’re not going to see stagflation in the economy.

Inflation is adjusting here. It’s just really the uncertainty that scares us. Okay, so they’re going to remain data dependent. They could have really stopped there for some reason. They also found it necessary to raise their 2025 forecast on inflation for PCE data from 2.7% to now 3%. That doesn’t make a whole lot of sense because the latest PCE data we have is from April. We haven’t gotten maze yet. That comes next week.

And it was at a 2.1% year over year. That was actually one chart here. If you give me 20 seconds, I might be able to even pull it up. Let’s see what we can do here while we’re on this note. I’ll go ahead and share this with you because I, I will use GRO for this one here. I developed a chart through grok and really just starting out here, using the image creation is really, has become impressive. So again, just give me one second here. I will show you this image though, real quick.

[00:09:28]:
So this is one I just. First prompt, first try. This is the first time I’ve used the GROK image creation acid to create a podcast logo for us. So, yeah, if you’re here watching today, let me know what you think about that. That looks, I. Looks pretty good there. You know, love the bull, Classic Wall street, but you know, make me mix it up a little bit. I’m a big fan of rhinos here from reading the book Growing Up Rhinoceros Success.

It might be a phone to mix in there. So I, I’m not able to find this chart right off the bat here, but if you look at a chart of inflation from the peak, I mean, it’s almost straight down. Lower lows, lower highs, exactly what you want to see from inflation. So at 2.1% year over year, what did they see happening later this year? That’s not just uncertainty. You can’t justify raising your inflation target from 2.7 to 3%. I saw some Fed members have had targets of getting as high as 4.6% in the third quarter. We’re 13 days away from starting the third quarter here. Does anything seem, you know, obviously, barring the uncertainty, which already the tariffs look to be being being solved.

You know, we’ll see what happens with the Iran Israel conflict as well. But I think that already, as the market has shown, investors aren’t treating this as it’s going to be a massive deal. You know, we got the big pop last week in the risk off assets and we really haven’t seen that since it might be a little bit of a gold is telling us here which has moved lower as well. We’ll get to that in a little bit. But man, gold has been on a hell of a run though just short term here since the Iran issues. You think you’d see more action there. So again, bizarre that they’re lower, are raising their inflation expectations and at the same time Here lowering their GDP forecast for 1.7% was the March projection now down to just 1.4% which I honestly could be seen as comically low. Not quite as bad as the Atlanta Fed, but I didn’t have high expectations for them anyway.

[00:11:34]:
Right. Remember it was just Q1 when they revised Q1 GDP estimates, it was a 4 over 4% swing. You know, going into the quarter before tariffs were announced, Q1 GDP was looking, they were looking for growth of 2.1%. Tariffs were announced and they flipped to where it was going to be neg. They thought it was going to be negative 2.8% for GDP in Q1. I think the, the second estimate we’re getting, looking at it now, I mean we did come back positive. So obviously very wrong there. Now the Atlanta Fed has a high upside GDP target.

So. So who’s wrong here? You know, just one another reason here not to trust much out of the Federal Reserve. Our review remains unchanged here though. The economy’s picking up speed. We’ll look for inflation to continue moving lower, for China to keep exporting. Deflation if J. PAL isn’t careful, you know, could be ushering in some a deflationary environment possibly even here. I think that’ll be tough to do with the money printers back on.

Right. We’re seeing money supply now back on the rise, back to all time highs. So you know, hard to see a deflationary environment I guess from that point of view. But China’s experiencing it right now, so we’ll see what happens there. And then there’s also the flip side of that view that Jay Powell could end up being right all along, but for all of the wrong reasons. He’s keeping rates high now. So he says. Right.

[00:13:02]:
For inflation purposes. But what if JD GDP growth really is going to be that good that yields do need to be higher, right? So then maybe we’ll be wrong in our view that yields should move lower. It still remains our call, by the way. Nothing’s changed from there. But how it would be kind of funny. I think I would accept that loss of higher GDP means yields are higher. All right, I’ll take that, right? So yeah, I’ll take that trade off all day. And then Jay Powell will end up being right for all the wrong reasons.

Which goes back to the point of Trump calling him stupid. You know, all this name calling and these publicly spats over social media or, or just traditional media, whatever it may be. Doesn’t it feel sometimes like, you know, you’re watching WWE wrestling where they’re packing the stands, Everybody loves watching it, but. But we all know it’s really fake, right? None of the actors talk about it’s fake, but it’s fake, right? That kind of feels like what we’re watching some days. Because Jay, for Trump to call Jay Powell stupid on a day like today, which in many ways I might agree with him, but it’s hard to believe that somebody stupid could get to the role of Federal Reserve Chairman, right? Maybe the actions he’s taken right now are stupid, right? I don’t think Trump was calling him as a human being stupid, but maybe his actions as a Fed chair stupid. And if this is real, right? But if it is WWE fake playing out, then Jay Powell is just playing a role here. You know, I’m not saying I just asking questions, not saying I have anything on that. But if it could be the case where GDP ends up, and like I said, J PAL ends up being right, but for all the wrong reasons, you.

[00:14:44]:
Then you start asking questions, you know, what does he know? What does the Fed know? And is this media back and forth just a script, Right? I don’t know. I don’t know. Maybe it is, maybe it isn’t. But you know, it helps to remove a little bit of the emotion from it. Because regardless, we can make money off of those things. If you can remove your emotion from the script playing out in front of you and focus on. That’s why we have the VRA investing system. It’s exactly why we do this, is to remove our emotion from it and, and to help make you money.

We tell you exactly what we’re doing here. If you’re not already a member, come and join us. See what I’m talking about? Join us@v letter.com we’ve got a 14 day free trial going on right now. And then if if, if you just want some free content, we do our podcasts here every day at the Market Close as well. So we’d love to have you with us and we love hearing back from you as well. So other than that from the Fed, to wrap it up here, I said I wouldn’t do a whole podcast about the Fed. Key word of the day, uncertainty. Uncertainty is the new transitory.

[00:15:46]:
I think that if I sat in here on the podcast and said time after time for months on end that, well, we’re just uncertain. We don’t know what to do. We can’t make any moves here. We’re just uncertain. We would have no, nobody, you know, subscribing to us here. No one will watch this. But that’s what we’re getting here from Jay Powell. So to us, from the outside looking in, it looks like another policy error, similar to Transitory, where he whiffed on inflation and now he’ll possibly whiff to the downside as well.

You know, this is one of many, though, come to expect it here from Jay Powell. Fortunately for us, we’ve got the Trump Economic Miracle 2.0, and any pullbacks we get, we’ll continue to use as buying opportunities here. That’s the market that we’re in right now. All right, so there’s some fun stuff here for the day, and then I’ll quickly wrap up the market. Today, the US Senate passed the Genius Act. So I haven’t had a whole lot of time to go through this in full detail yet. I’m sure that there are some things in here that you might not expect. Who knows? I haven’t looked.

Like I said, I haven’t had the chance to go through this yet. But if you’re a regular listener, you know, I’ve been concerned and, and vocally against central bank digital currencies here in the U.S. right. Right. There are open World Economic Forum members, world leaders, who talk about the necessity to get to a digital dollar, a digital euro, a digital currency of some sort. So that then. And they’ve said this openly as well, they want to get rid of the gray market. Right.

[00:17:21]:
Products that are legal to buy, but they can’t tax. They’re. That’s. And that’s their claim is what they’re looking for, really. It’s about surveillance. It’s access to all of the data. Right. And you don’t have a say in how they’re using it.

So could this be a Trojan horse for that? Right. It does further solidify digital assets. It further legitimizes digital assets. So you know, we’ll see. Right. We’ll keep diving into this bill. If we see anything in there, we’ll, we’ll try and bring it up here as much as possible. But on the surface also this looks very good for digital assets.

Essentially what this does is it provides a framework for stablecoins. Now stable coins might not sound all that interesting to you because it’s just a digital version of what you already have. Right. But versus like for example here one use case and this isn’t happening currently in the US at least where you have like ETFs right. That are the gold ETF or bitcoin ETF or they say that they’re backed by gold or they’re backed by bitcoin, maybe even say they’re one to one. But in the fine print, you know, it’s a fractional reserve system kind of. Right. That fluctuates with their demand certain requirements of how many reserves they have to have.

This is totally different than that, than an ETF kind of vehicle. This is a one to one transfer backing stable coins. So let’s, let’s take a look at it here. I do have a quick summary. This is a vague summary. So you know, don’t take all of this as to be all that it does. Right. But let’s get into a few of them.

[00:19:04]:
So essentially establishes the regulatory framework that this, this industry, this new emerging asset class has been looking for. It’s restricted capital from going into these developments because we’re not sure what’s going to happen. Right. Could the government seize our assets? No one wants to invest a large amount of money into a project like that. So again further legitimizes the industry. It will allow for stablecoin issuers here to back their stablecoins with US Treasuries. That’s a big defining moment here, right. That it will allow backing of treasuries.

And I’ve got a point here that I’ll tie that back in with. So again there’s mandates in your different qualification factors that one to one backing that I talked about. So you know, Federal reserve balances, cash demand deposits or treasury instruments, again keep that one in mind. Okay. And you know, the rest of the processes you might expect that are all logical and make common sense at least on the surface. Right. I’m not going to dive too deep into those right off the bat but I think this leads to here is the further tokenization of assets. So now we have legitimate use cases for U S Treasuries that’s huge.

Right. So it opens up the door for regulatory framework to tokenize and issue coins not just for stable assets, but for real estate. Right. Because that price fluctuates on its own. You might have a stable coin that’s backed by gold. But what if gold goes up 20, right. Then your coin’s obviously going to be worth a little bit more as well. So still it’s too early to tell exactly what the use cases will be.

[00:20:52]:
On a personal level, a lot of this would likely be interbank transactions swaps that this will eliminate massive fees and, and create great opportunities within those industries as well. Treasury Secretary Scott Bessant, who will likely be the new Fed chair. We’ll see also highlighted recent reporting that this stable coins as a whole, the market cap could grow to 3.7 trillion by the end of the decade. Right. That’s financial engineering right there. This is a brand new asset class that could hit a multi trillion dollar valuation in four and a half years. That’s exactly the innovation revolution we’ve been looking for. The melt up we’ve been looking for into 2030 folks.

We could even be on the low side of where we’re at. But this is why we wrote the big bribe. It’s why we highlighted our five mega trends, all of which remain in place. But I’m gonna focus on the financial engineering one here because I mentioned earlier that Jay Powell is not going to lower rates. Trump might try to find some ways around that. Right. To lower rates without the Fed’s help because the Fed only controls the short end of the yield curve, the Fed funds rate. So now today also we got an SLR pass which lowers the reserve requirements for banks if they’re going to be purchasing also US Treasuries.

Interesting. Right now we’ve got a new pool of liquidity from these banks that theoretically was completely off limits. They don’t. But now that the red tape has been removed, not saying, not trying to make an opinion on whether this will long term be a good thing or bad. Sometimes you see lower reserve requirements like this followed by a blow off top bubble kind of deal years later. We’re so far from that point, so I won’t even get into that today. Now is the time to be focused on making money here and then we’ll talk more and more about preserving it throughout even in this podcast today. Right.

[00:22:58]:
We’ll talk about where you want to put your earnings, your, your, your gains from these positions and quickly your inflationary assets is the answer. If you’re if you’re experiencing a devaluation of the dollar, you want to buy things with that dollar now that it’s going to be worth more in five years. That’s real estate, stocks, gold, Bitcoin and soon to be other crypto assets as well. So that’s how you, that’s. We’ll, we’ll continue to dive into more that more here. But this lowering of the slr, again back to the financial engineering theme. If Jay Powell isn’t going to lower rates, this seems like a workaround here. You know, we’ll see how much liquidity this really frees up and how aggressive it’s used.

Right. I’m sure we could do a little bit more diving into that here next week on the podcast as well. But again, more cash that’s being allowed to purchase Treasuries. That should create demand for Treasuries. Right. Driving yields lower and bond prices higher. So again, back to the stable coins. This really kind of completes the picture here of again, these stable coins are allowed to buy US Treasuries going to grow to a $3.7 trillion market cap, they believe.

Right. So whether these overlap or not is indifferent. Both of these should be working towards around the Federal Reserve to lower yields. We’ll see how that plays out in real time. You know, yields flat essentially on the day, but really, I mean, has made a series of higher, excuse me, lower highs and lower lows for quite some time now. And in our view that should continue. We know it’s what Trump wants. We’ll see how we get there, though.

[00:24:43]:
But like he said in his interview today, maybe we wait six to eight months, we got a new Fed chair and that none of this even matters. Right. Because they’re lowering rates also. All right, so let’s look at our market quickly here on the day. I know I got a little long winded here. That’s a lot of exciting topics happening out there. And the Fed just happened to be a little extra. So hope you enjoyed it as well.

So looking at our markets on the day, small caps led up half a percent, followed there by the Nasdaq did manage to finish higher on the day. Good to see, up 1/10 of 1%. Excuse me, on the day to day. And finally here, the Dow Jones down 1/10 of 1% on the day to day. But it was good to see from the Nasdaq continued to semiconductor outperformance. Kip’s talked about this a lot. I’ve talked about this a lot. I’ll share this chart.

We’ve been sharing this regularly with our VRA members. Again, another reason to come join us here. We’ve seen this as the most important chart from the April lows. That is the April lows right there which perfect timing the semis bottom compared to The S&P 500. We talk often. You want to see the semis leading. Right? This is exactly what that is. This is semiconductor outperformance.

That is a massive outperformance there from the semis. This is a short term chart. So but good to see the multi month highs from that. It’s what we want to see continue from this group. We’ve been king off of it here. Yeah. So we’ll continue to keep you updated on that as well because I mean we’ve seen so much back and forth action in this market recently, really sideways action that we haven’t gotten to extreme overbought on steroids. So you haven’t had necessarily a perfect entry point.

[00:26:24]:
Great monthly $k averaging points in here along the way. But from the lows it really has been a parabolic move higher so far. Next up, looking at our internals on the day today. You know, for a day where our markets were mixed like this, good day today. Positive across the board here from the internals. No huge beats or anything but positive advanced decline. Both NYSE and the NASDAQ. Positive 52 week highs lows NYSE and the NASDAQ and volume as well, narrowly.

But positive on the nyse. And then on its surface this is surprising. Two to one positive for the nasdaq. We’ve seen this immense fund flows into penny stocks recently, which is going to be an interesting story to watch play out. You know, wondering if penny stocks might be, you know, the next meme stocks, right? The next meme coins or altcoins or coins or whatever people call them. Right? We’ll see. We’ll see. Penny stocks have been one of those groups that as a whole hasn’t gone wild.

Right. We’ll see what happens. It could be interesting again, something fun to watch play out here as we enter the golden age. These are exciting stories, you know, that are wealth creation stories. There really is no better wealth creation vehicle than the stock market. It’s been proven true time and time again, hasn’t it? Especially here in the US but looking at our sectors here on the day, we finished with four out of our 11 sectors higher on the day. Just so you want to see though led by tech, interesting to see utilities right behind tech even on a day with yields higher, you know, we look at that as another indicator of yields moving lower going forward is when utilities are, are on the rise, which really had been a, a silent mover to the upside, you know, not too long ago here and still right in the range of its all time highs still. That kind of gives you a direction if investors don’t think utilities are going down.

They’re the biggest borrowers in the nation. Right. So that again, a little bit of a tell, not a perfect indicator, but a little bit of a tell about where yields may be going from here. Our laggards for our sectors on the day. Energy, which again if the Iran issue is going to continue, Iran Israel conflict is going to continue, obviously we’d expect higher oil prices as well. Not saying the energy would have to move perfectly with oil prices but that we’d get, you know, this could, if it was going to be a bigger issue, we’d be getting a bigger move here. All right, here let’s get into the commodity side of things then. That kind of wraps it up for our sector.

[00:29:10]:
Watch gold now higher on the day slightly. But again, you know, being it’s had some rallies here and, and stabilize, we’ll continue to keep an eye on it. But this is one of those assets you might expect to be doing better here if this was going to escalate to a larger issue. Gold still up 2, 2/10 of 1% at 3394. Silver flat on the day now after it’s been on an impressive move as well. $36.76 an ounce. Get a quick chart of that one as well. That is so that did briefly.

Well let’s see. Yeah, during the, during the session today did hit another higher high since 2011. So a similar move to what we’ve seen from the gold miners as well. So until we get to all time highs, the, the party doesn’t even start. Copper flat on the day, $4.85 a pound. Oil now at $73.40 a barrel again, I mean has been moving lower from those Friday highs. We’ll see if that continues. You know, if that means that, that this ends sooner rather than later peacefully hopefully then great.

That that’s perfect here. Oh, I do want to share one more chart here on gold. This is from bar chart. Just a few little notes there. Look at, I mean obviously when you zoom out, I bet that looked a lot bigger and it’s and in the heyday of it all. But again this is gold throughout time. What an impressive move it’s been. Kip’s talked a lot about the outperformance since it’s been since he added to the vra portfolio in 2003 at 350 an ounce.

And essentially you if you flip this chart on its head, you would get a chart of the US Dollars purchasing power, right as exact opposite that since the creation of the Federal Reserve in 1913, you know, just so happens to be right around the time that this chart begins. The the purchasing power of the dollar has done nothing but collapse since that time. So finally here for today. See, we got all of them. We got oil. Yep, that’s everything here. Bitcoin is the last one Bitcoin, you know, has it’s been a nice, you know, seeming to form a base here above the $100,000 level now up half a percent on the day at $104,866 of Bitcoin. Folks.

That’s all that we have time for here today. Please be sure to subscribe to receive our VRA podcast every day at the market close. You can sign up@ VRAletter.com Click the podcast link at the top and we’d love to have you with us. Thanks again for tuning in. Until next time. Tomorrow the market is closed, so we’ll see you back here if not Friday, then Monday after the close.