In today's episode, Tyler covers an action-packed FOMC day, recapping J Powell's latest press conference, and more importantly, what it means for investors going forward. He also dives into the ocean of liquidity set to hit this market in 2026 that will fuel the next leg higher for stocks. Plus, Tyler previews an exciting special guest podcast coming up tomorrow with Wayne Allyn Root.

Don’t look back because the market is closed. Good Wednesday afternoon everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a fantastic day out there today. And with me, being on the podcast specifically on a Wednesday can really only mean one thing. It is Fed day today as we had the FOMC announcement and press conference today. But don’t worry, I won’t bore you with too many of the details here today. We’ll get through it pretty quickly, so bear with me.

And we’ve got a lot of great stuff and in this podcast here for you today. So let’s break it down a little bit of what you can expect for today’s podcast as really first and foremost here, we’ve got a special edition of the VRA podcast coming for you tomorrow. We’ve got a special guest and a special edition of the podcast tomorrow is our good friend Wayne Allen. Root will be joining the show tomorrow after the market close. So stay tuned. We’ll deliver it into your inbox. You’ll find it on all of our usual platforms as well. So make sure you’re subscribed to receive our email updates every day at the market Close with our VRA podcast which you can find@vra letter.com and click that podcast link there at the top.

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You’ll get the email sign up form if you’re not already receiving these every day at the market close. So thank you Wayne for joining us. We’re looking forward to it should be a very exciting, exciting show. Wayne’s had a big announcement in the last few weeks about a massive and the implications of of of this actually are massive as well for a lot of people. But a lawsuit against companies like formerly known as Twitter so before Elon bought it for censorship, companies like Facebook and then Stanford for working with the the Biden administration to censor right you know, right leaning voices or what they called as super spreaders of COVID misinformation. So we’re excited to have Wayne on without giving too much away just yet to discuss that and exactly what it means and what the next steps are for him in that lawsuit as well. It’s not all we’ll talk about but will be a very, very exciting episode tomorrow. So we’re very, we’re pumped for it here.

So on the market side of things today, as I said, we’ll cover the latest FOMC.

Meeting today as well as Jay Powell’s presser, they did decide to cut rates as expected by the market and us here at the VRA by 25 basis points today. And with that news, you know, came some very, very important all time highs from some of our key indicators in this market. You certainly won’t want to miss that. Got a couple in there that may even surprise you a little bit. Then, of course, we’ve got some great charts to share for you here today. And we’ll cover our major indexes, our internals, which did come back better than we’ve seen recently and maybe even better than you might have expected. So stay tuned for that as well. On top of that, we’ve got our sectors and then our VRA commodity Watch.

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So without further ado, let’s jump right into this podcast today. As I mentioned a couple of times now, we had the Fed announcement and press conference today cutting rates by 25 basis points while seeing three descents for the first time in roughly six years from the Federal Reserve. So maybe not as long as you might have expected, but the range of dissents likely hasn’t been seen in some time. Is kind of the rumor mill going was that one member was going to vote for a rate hike of 25 basis points. That didn’t happen. Two of the dissents were for a pause here. And the third, as you might expect if you’re a regular listener, Stephen Myron voted for 50 basis points worth of cuts, which we agree with. You know, as he’s Myron has talked about here, the speed is important because these cuts aren’t really felt by the market, by the economy in a lot of cases between 12 and 16 months, in some cases a little bit earlier.

But Myron’s point, which I wholeheartedly agree with here, is let’s get down to that level sooner rather than later because the Fed still is restrictive, technically speaking, while Jay Powell might disagree with that, the Fed is overly restrictive here. So let’s get down to the neutral rate faster, right? Even go back just a year and two months ago. Okay, Jay Powell cut rates by 50 basis points to help out. You know, of course his Democrat buddies trying to get Kamala elected at the time while inflation was at a higher level than it is today. And that’s by their own metrics, right? The Fed likes to use.

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The PCE as their key gauge of inflation. But today, you know, if you look at the real statistics, more real time type of data like truflation, you know, we’re looking at their inflation index at 2 and a half percent right now while the Fed is looking at a roughly 3%. And of course we haven’t had the last few months of data. But we’ll get to more on inflation here in a second because the other major news out of the Federal Reserve today that might have flown under the radar, unless you really are plugged in to the financial media, even the financial mainstream media covered this today as well. But if you aren’t quite plugged into the market, it might have flown under the radar because the Fed just ended, you know, their balance sheet runoff, also known as quantitative tightening or QT in the month of November. Now today they announced they will be once again resuming their asset purchases. Of course, with these levels, they don’t quite call it qe. Actually, sometimes they call it not QE, QE.

They’ve got all kinds of crazy names of the Fed could just use, you know, the, the definitions that the rest of society already uses. More people would pay attention to how boring these conference, these press conferences are. They use this language of their own for that exact purpose, to confuse people, to bore people. Because we already have words for all of these things. But that would take away the game for them. They wouldn’t be as necessary if they didn’t have all these made up, you know, terms for what they do in the market. It really ruins the game for them.

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So that’s why they do it. That’s why most industries do these kinds of things and call different aspects of what they do differently than most people would call them. Just, it’s kind of a gatekeeping thing really. So what does this mean for the market? Well, in just about two days, the Fed will begin purchasing $40 billion worth of treasury bills. And that’s not just before their next meeting. That’s monthly until roughly the beginning of May. So for the market, number one, this means more liquidity in the system. Number two, on the, on the rate cut side, the lowering of the fed funds rate here means that the returns on money market accounts are also about to drop here as well as they have now.

You know, for this rate cutting cycle, pretty not terribly significantly as we’ve just seen 25 basis point cuts compared to the 50 basis points we got last year. But money market rates are more sensitive to the fed funds rate than say mortgage rates. This will come quicker. So as people look check their money market accounts and realize they’re getting a lower rate of return, that money is going to be leaving money market accounts which remains at record highs here.

So pulling that money out in search of higher returns means more liquidity for the market, adding fuel to the fire. As we’ve said here for Some time. And if you happen to catch Kip on Charles Payne show today, this is exactly what he was talking about. The, this flood, this avalanche, this ocean of liquidity coming into the market as we head in to 2026. So not just because of the Fed, but because we’re entering Trump year two of the Trump economic miracle, which means more deregulation. Right. The one big beautiful bill also.

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Put an extension on the tax cuts as well, I believe put them into law. So tax returns should be good this year, which comes in April. Deregulation adds liquidity, tax cuts add liquidity. And of course, the innovation revolution which leads to deflation. Yes. Not even going to say disinflation this time. The innovation revolution will lead to deflation here. Innovation events like this are always deflationary.

So with that being said, again, that are those are just a few factors of this ocean of liquidity we see coming for the market in 2026. And we expect a massive move from the market from our favorite stocks in 2026. Again, if you caught Kip today on Charles Payne show, this is what he talked about. You know, we are just now entering 1996 or so, maybe 1997. I really wouldn’t even say that far. That time frame equivalent to from the dot com era where we saw the largest returns of that time. You’ve heard me talk about it here often. And Kip as well.

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From 1995 to 2000, the NASDAQ rallied 580%. So far, even with this recent rally in the NASDAQ, we’re at 135% returns. That’s great. From the 2022 bear market lows, good returns, no doubt about it. But if you consider that to be a parabolic move higher for the market, buckle up because you ain’t seen nothing yet. That’s the kind of action we expect as we’re now hopefully going to enter a hot IPO market. You know, we just got the SpaceX news this week as well. Going to IPO with likely one of the largest US IPOs ever.

You know, coming in at a one and a half trillion dollar valuation, likely making Elon Musk the world’s first, first ever trillionaire. And just like we saw with Apple when Apple was the first company to cross a trillion dollar market cap, it wasn’t long before more followed. I think now we have five or six companies greater than a $4 trillion market cap. You know, Apple just crossed that level seven years ago. So we have way more than that in the trillion dollar Club. And now six companies in the $4 trillion club. We’ve talked about this here often as well. We expect it won before we have the first $10 trillion company.

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You know, it might be Nvidia or, or you know, they’ve certainly got a bit of a lead here. Google’s catching up there with some fantastic technology that they’ve come out with as well. Our, you know, one of my favorites here continues to be Tesla. Should be a very exciting year for Tesla as well as they’ve really got multiple companies inside of Tesla that if they were standalone, if they were spinoffs would fetch a trillion dollar market cap on their own. And today Tesla’s at what, you know, one and a half trillion dollar market cap almost on the dot. Again, multiple companies, four or five companies inside of Tesla right now that in the next few years will hit $1 trillion market cap plus. So that’s one of our certain favorites there. Especially when you’ve got somebody like Elon at the helm who is, you know.

Just multi talented for many different sectors and has found a way to combine a lot of those. You know, just what an impressive CEO really. So going back to the Fed here again, I mean if, if you think this has been a big move in the market again this is just beginning here and still at these levels today. First chart here for you. Charles shared this one here earlier today as well. You know, the Fed again remains restrictive compared to CPI data. This is the most restrictive the Fed has been in some 15 years even at today’s levels really because we’ve got a fed funds rate. What did the that bring the fed funds rate down to today?

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To 350 to 375. We’ve got inflation at two and a half on based off of trueflation. This is, this is based off of cpi. So you know, even looks a little bit less restrictive than they really are in this chart. That’s the kind of hamstringing the, the Fed has tried to do under Jay Powell. Right. We know that not only is Jay Powell notoriously political, but the Federal Reserve as a whole is notoriously political. So thankfully it hadn’t been enough to hamstring this economy in a way that has brought on a recession, but as we’ve seen weakening in the labor market, you know, it’s time for the Fed to get to work and to get into a not only a less restrictive environment but a stimulative environment.

Now I think companies will do the bulk of the heavy lifting on that. Obviously it’s always the companies never The Fed. The Fed didn’t really create anything outside of the money printer.

I mean, well, we’ll come back to that here and a little. I’m sorry. I remember exactly what it was. So who do these higher rates affect the most? Is the middle and lower class. Because Kip talked about this this week as well. The first America is not worried about paying higher interest rates on a loan. They’ve already got the money, right? It’s somebody going out to buy their first home, somebody going out there to buy a used car and having to pay astronomical, really, rates in today’s society. I realize that a few decades ago, those were normal rates.

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These are different times. You know, we’re not talking about paying, you know, between 50 and $70,000 for a used car. Right. If you’re looking at getting a truck that you want to use for work, I mean, you have to go back seven, eight years to find a truck for less than 40K. That’s the real effects of inflation. And again, who that affects the most? The middle class, the lower class. Those are the people affected most by these high rates. And we said it here often.

It’s why Jay Powell has been so tone deaf. And here’s a great chart. This is from Lyn Alden, okay? On the value of the dollar. Now look at this. Absolutely parabolic. Move higher from when Nixon took us off of the gold standard. But we added 40% to our money supply in the COVID era. We’re still digesting that.

That massive increase in money supply. I mean, yes, that’s parabolic. That’s straight up right there. And that’s the last five years, really. So you can see Lynn Alden pointed this out beautifully of the buying power of doll time. We talk about this here often as well, that from 1913, when the federal Reserve was created, the dollar has lost 98% of its value. I mean, it’s. It’s shocking to look at those numbers and you look at the comparison of the dollar versus gold to today.

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You know, Kip talks about this one often as well. Gold or, sorry, money cash in a money market account. 100 grand in a money market account from 2003 to today would have increased, you know, let’s say to $300,000. But the purchasing power of that dollar, of that $300,000 is roughly between 80 and 100k maybe. So really, after inflation, that $100,000 has lost purchasing power in the last 22 years. While gold, on the other hand, that $100,000 if it were invested in gold, you know, worth well over a million dollars today. That is the effect of the money printer. So for any time, J, you hear Jay Powell say, oh, we’re worried about tariffs affecting inflation or economic growth.

That’s, that’s really the craziest one. The economic growth is going to bring inflation, that more productivity is going to bring inflation somehow. The only factor really that affects inflation from the Federal Reserves, that’s within the Federal Reserve’s control is the money printer. That is what brings on inflation. Of course, Jay Powell can never say that because then the jig is up. All right, I said I wouldn’t spend too much time on the Federal Reserve today. I’ve hammered it pretty hard here.

But overall, you know, for Jay Powell today, this was one of his better press conferences. Just want to make sure I don’t have any other points there on the dollar that I want to make. I think I make that point pretty clear. But to wrap it up, you know, what can you do about that? I do want to finish with that. It’s why we’ve said since 2022 when we wrote our book the Big Bribe. You must own inflationary assets because cash is trash, right? And that applies to just about every major, definitely every major global currency. So why you must own stocks. Okay? You must own precious metals, gold and silver.

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Of course, under stocks, that also applies to gold miners. You want to own the picks and axis. When gold is on the rise, you want to own real estate. And lastly, the newest kid on the block, cryptocurrencies. Specifically, Bitcoin is one of our favorites. You heard Kip talk about our other favorite here as well, our newest and second ever crypto recommendation in the VRA portfolio. I won’t mention it here on today’s podcast, but if you want to find out more, we’ve got a two free week trial going on at VRA. Letter.com.

Final point here for J. Pal because again, it was not a bad press conference from him today. You know, asked on leaving.

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If Trump appoints somebody new or if he would leave and remove himself from the board, he actually gave a pretty good answer saying, you know, he really wants to turn this job over to whoever replaces him. With the economy in really good shape with inflation under control as much as possible, and that all of his efforts going forward will be towards that goal. You know, pretty neutral answer from him there. So overall, I give him a very rare B plus. Yeah, better B plus. He left the door open for a January rate cut. No Comments like we saw in the last FOMC of oh, the December rate cut is not a foregone conclusion, which very specifically was.

Meant to send the market lower. One grievance that Kip actually mentioned on a Twitter post or X post earlier today. If you’re not following him as well, go follow him on X. As well as the VRA account, we put out some great content there.

You know, this is the point I made earlier. Powell talking about his concerns of economic growth contributing to inflation. And someone really needs to explain to him it’s your money printer dude, that’s what’s causing inflation. But again, the jig would be up. So today Jay Powell began speaking. The market did start moving lower, didn’t quite get to the lows of the day, but actually finished pretty good. While he was talking, While he was talking, this is, he is notoriously the worst Fed chairman. This is at sending the market lower.

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While he’s talking race decision, market shoots up, Powell begins talking. Markets go straight down, hit the lows of the day. We did not see this pattern today. We actually got back to the highs of the day to day. But again, that’s not my opinion that Jay Powell is the worst at it. There’s the facts right there. That’s just one example. You can look at all of his predecessors in the modern Fed era where they do these press conferences.

No one is worse at it than Jay Powell. So.

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Looking at our markets here, as I said, we finished closer to the highs of the day to day being really a solid rally in the last hour of trading, as many call it the smart money hour. We were led today by the small caps which outperformed the mega caps in a rate cut environment over the next six to eight months after a rate cut that’s phenomenal usually outperforms by 3 to 5% over the market caps. Well, today small caps actually managed to hit an all time high. This is really an unloved sector by so many, you know, some of it has to do with specifically how the Russell 2000 has so many holdings in it and how they’re weighted.

But great to see here the small caps which really signals broader health for the US economy because most of these are US based companies. So very good to see small caps hitting an all time high today up 1.3%. We were followed there by the Dow Jones, up nearly 500 points on the day to day, over 1%. Another day like today and the Dow will also be at all time highs. I’ll also point out here for any Dow Theory fans. The transports from we said we wanted them to participate. They are really participating now. The Transport’s up over 2 1/2% on the day to day 2.66% hitting a 52e high now getting back into the range of their alltime highs as well.

As we say here, often new highs beget new highs. The S&P 500 up almost 710 of 1% on the day. Roughly at the highs today, roughly 20 points away from an all time high. And for anyone who continues to say it’s only seven companies, well, the equal weight S&P 500.

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You guessed it, all time high today, exactly what you want to see. So it’s not just seven stocks driving this market higher. The Nasdaq was our laggard on the day, you know, not what you want to see. We want to see tech leading the way. But we did get semiconductor leadership outperformed even the small caps on the day. Again, Small caps up 1.32%, semis up 1.38% on the day today hitting an all time high as well. Exactly, exactly. Textbook action of what we want to see.

NASDAQ still has a little bit more work to do to get back to its all time high. But again, small caps all time high, semis all time high transports 52 week high. We’ll get to some more highs here in a little bit. Big new highs beget new highs.

All right, so after hitting all time highs, you might, if you’re a regular listener, be able by my smile to tell what I’m going to reference next. I share this one. It really, it seems like every podcast recently because it is shocking sentiment. The Fear and greed index remains firmly in fear mode. I mean just a week ago we were still at extreme fear. A month ago at extreme fear, we were there for quite a while despite all time high after all time high from our markets. But we’re not even close to neutral yet here which tells us, yes, there’s going to be pullbacks along the way. We are entering the weaker time of the month here.

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But, but wow, this tells us just how much higher this market has to go in the long run until we get to extreme greed for weeks and months on end when we see a pullback like we just got from November, the November all time highs to to today when you get that kind of a pullback, a 5 to 10% pullback and we remain in extreme greed. Yeah, then we’ll be getting a little bit worried, you know, tonight we’ll also get the latest look at the AAII investor sentiment survey, we did see a big flip in bulls last week, so we’ll see if that continued or not. But I’ll tell you, the put call ratio, the average there is 4.7. That is a normal day. Today we opened at a point nine four, so not quite, you know, extreme bearishness, which would be over a 1. But we spent most of the day in the 0.8 range. We finished at a point 88, which does tell you there’s still certainly a lot of doubters out there for this market right now. Looking at our internals, you know, even this morning with the markets mixed to lower, the internals were looking good.

That is the kind of action you want to see. And we’ve not, you know, until the really the last week or so not gotten good action. The kind of action you want to see from the internals today was a little bit different. You know, we were, we were negative on a lot of our major indexes, but the internals were only negative on one indicator, the advanced decline line on the nasdaq. Everywhere else was positive. After the Fed announced they improved, Jay Powell started speaking. They weakened a little. Then the market realized this isn’t okay.

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Jay Powell is not going to do anything crazy today. And we were off to the races. These internals must have finished at or near the highs of the day to day. And even after the close here of my refresh, even better than I wrote down so quickly here, Advanced decline coming in positive on Both. Well over 2 to 1 positive on the NYSE. Not quite 2 to 1 positive but pretty close on the NASDAQ. 52 Ekais, the lows absolutely crushed here. A little bit light on the numbers for the NYSE, but only 19 stocks hit 52 week lows.

That’s almost nothing here really coming in over nine to one positive on the day. NASDAQ still strong here as well, over three to one positive. Also lastly here, volume, I mean fantastic numbers here as well. Well over 2 to 1 positive on the NYSE. Not quite as good from the Nasdaq but still solidly positive. Next up here, looking at our sectors on the day today we finished with nine out of our 11 sectors higher on the day, one unchanged. So only one sector lower on the day to day. We were led, believe it or not, by industrials just shy of an all time high.

Materials also not too, excuse me, that’s not correct material. Still have a little bit more work to do after that. We had consumer discretionary healthcare with a big move higher today. Then financials just shy of an all time high. And energy believe it or not, right in the range now of its 52 week high even with oil below $60 a barrel. Like we want to see the semis leading tech. Good to see energy stocks performing so well with oil at these levels. I’ll get to our commodity watch here, more in just a second.

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Finally here, our laggards on the day today. Utilities actually finished lower on the day despite the 10 year yield finishing down half a percent still at a 4.16. No concerns for us there though. Finally here for today our VRA commodity watch. Let me get a quick refresh of these here as well. Gold was higher on the day today, up 4,000 up to 4,257. But again just what you want to see from this group. Like I mentioned with energy, like I mentioned with the semis, you want to see the gold miners outperforming.

That’s exactly what we got today as GDX finished up nearly 1.7% on the day today. Very good action there from the gold miners. As I started off this podcast with that’s a group we remain very bullish on gold. And for the miners, silver after breaking above $60 an ounce for the first time ever yesterday has blown right through that Number now above $62 an ounce, $62.22 cents an ounce. Copper now at its highest level since its sell off that we saw in July. Dr. Copper that bodes well for global economic health. Copper now at $5.40 a pound.

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And then oil as I mentioned actually was higher on the day to day but at $58.46 a barrel, so below $60 a barrel. Again good to see energy stocks performing well. Natural gas was up 1% on the day today, a little bit below that recent run up that we saw earlier this month. Now lastly here for today, bitcoin down slightly on the day to day. You know, fairly good number though for what we’ve seen lately was as high as 94,458. That was its highest level since mid November earlier today. Now at $92,515 a Bitcoin folks, that is all that we have time for here today. Please be sure to tune in tomorrow again with our special guest Wayne Allen Root.

We’re very excited for that podcast. Tomorrow should be a fun one. We’ll have it over to you around five or six o’ clock or so tomorrow. But then other than that, please be sure to subscribe to receive our VRA podcast every day at the market close, you can sign up@vra letter.com click the podcast link at the top. We’d love to have you with us. And you know, if you got a little extra time on your hands, leave us a review on your favorite podcast website out there. Whether Apple Podcasts or for Spotify, give it a like on social media, maybe a share or a comment there as well. We always love to see it and to interact on the social platforms, but as always, send any questions you have or thoughts in to support rainsider.com as well.

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We’d love to hear from you. So thanks again folks, and until next time, we’ll see you back here tomorrow for our special podcast after the close.