00:00:01.000If you find yourself wondering why that is happening, well, I am here to explain from treasury yields to gas prices in Hormuz to government spending.
00:00:10.000It's worth breaking down all the confusing headlines because our economy, well, it's not in great shape.
00:00:15.000The Federal Reserve decided to increase the interest rates yesterday by a quarter point.
00:00:21.000So you may recall that President Trump pushed extremely, extremely hard to get rid of Fed Chair Jerome Powell, who's pissed at Powell specifically because Powell would not.
00:00:33.000He said that Powell was keeping those interest rates too high.
00:00:35.000The president wanted injections of liquidity into the economy.
00:00:39.000He said, We've got the inflation under control.
00:00:40.000Powell's like, I don't know that we got the inflation under control so much.
00:00:43.000And Trump was like, No, we need someone in there right now who's going to inject liquidity in the economy, make it easier for the dollars to flow.
00:00:50.000So he pushed very hard for Powell to go.
00:01:04.000Every Democrat suggested that Fed Chair Kevin Walsh would do exactly what Trump wanted him to do.
00:01:08.000Well, his first major decision was to increase the interest rates for the first time in three years.
00:01:13.000According to the Wall Street Journal, the Federal Reserve raised interest rates Wednesday for the first time in three years, a sharp reversal that began taking back cuts it made last year and implicitly undercut the White House's insistence that inflation isn't a concern.
00:01:26.000The increase was approved unanimously.
00:01:28.000It raises the benchmark federal funds rate range by a quarter point to between 3.75 and 4%.
00:01:34.000Again, the vast majority of officials say that there will be yet another rate hike before the end of the year.
00:01:39.000So the president, I would imagine, is going to be pissed off at this because when you increase the interest rates, you make it harder for people to take out loans.
00:01:47.000It has an impact on the stock market and all the rest.
00:02:17.000So, one reason is inflation remains high.
00:02:19.000The second is that treasury yields have been spiking beyond belief.
00:02:21.000So, a treasury yield is the difference between the price of a T-bill, the price of a bond, and the actual facial return you get on the bond.
00:02:28.000So, when the price is dumped, the yield goes up.
00:02:30.000So, the yield is really high, meaning nobody's kind of buying our bonds right now.
00:02:36.000Well, you suck money out of the economy by increasing interest rates, the overnight interest rates.
00:02:40.000It means that people take out less credit because they don't want to be charged that interest rate.
00:02:45.000And you also secondarily create the incentive for the Treasury Department to compete with the return to be got on savings by increasing the interest rate on T-bills.
00:02:52.000So you're sort of pushing them to increase the interest rates on T-bills, on facial interest rates, on, say, three-month T-bills, to increase the marketability of those T-bills and drop the yields.
00:03:03.000This is why the Treasury yields decline ahead of Warsh's decision.
00:03:06.000People were anticipating slowing in the economy.
00:03:08.000And the idea is to move from the markets to the T-bills.
00:03:12.000That's what the Wall Street Journal reported yesterday.
00:03:15.000The 10-year yield retreated just below 5%.
00:03:18.000The NASDAQ and the SP 500 traded higher with the Dow flat.
00:03:21.000Brent crude futures were down more than 2% at $106 a barrel.
00:03:24.000Here was Kevin Warsh defending his decision, saying that the action was consistent with stable prices.
00:03:30.000Thanks so much, Elizabeth Schulze with ABC News.
00:03:33.000Big picture, I wonder if you could tell us just what this move today will actually do for American consumers and have to ask.
00:03:39.000What is your message here to President Trump, who has repeatedly called to cut interest rates, not raise them?
00:03:46.000I've got nothing for you on a discussion with the president, but I won't make that count as your question.
00:03:53.000On the American people, as I said in my prepared remarks, the least well off are the ones who have the most to gain from stable prices.
00:04:02.000The decision we made today was the right decision to deliver on the remit that Congress gave us to ensure stable prices.
00:04:10.000Moreover, I would say because of the underlying strength of the economy, because we are, as I mentioned, largely acting consistent with full employment.
00:04:23.000Some months ago, I said we will deliver stable prices.
00:04:26.000Today's action is consistent with that.
00:04:27.000So, again, the goal is to maintain stability in prices.
00:04:32.000Good shot that the president is going to come after Kevin Walsh, be a little unhappy, shall we say, with Kevin Walsh.
00:04:39.000Now, the chances on Kalshi as of yesterday that Trump was going to go after Walsh are pretty high.
00:04:43.000They spiked from like the mid 30s all the way up to like the mid 60s that he would go after Walsh sometime between sometime before January 1st of 2026.
00:04:53.000The likely possibility of another Fed rate increase in October, that maintains.
00:05:01.000The Calchie market suggests about a 52% chance that the Fed will maintain the rate, and essentially the same chances that the Fed will hike by 25 basis points.
00:05:12.000Nobody thinks that the Fed is going to cut the interest rates.
00:05:14.000So this gets to the continued inflation.
00:05:19.000Obviously, oil has something to do with it, of course.
00:05:21.000And that looks like it might get worse, not better.
00:05:23.000In the short term, given the fact that there are Houthi attacks on Saudi pipelines and that they took over the Babel Mandab Strait, as we mentioned yesterday on the show, the Saudi military basically did nothing because they are incompetent.
00:05:33.000And then they begged America to help, and America said no.0.63
00:05:35.000And now they're busy begging the Israelis, who they claim are horrible monsters for Gaza, to help them fight off the Houthis, which is some irony since they have a defense pact with Pakistan and Turkey.
00:05:47.000So those Brent crude prices jumped to about $106 a barrel yesterday.
00:05:51.000Now, if you take a look at the six month view of Brent crude, Again, you see that it's been spiking again since basically the beginning of August.
00:05:59.000It came down pretty substantially at the end of August.
00:06:02.000And since then, it's been on an upward trajectory.
00:06:04.000So obviously, that is having a bleed over effect into prices.
00:06:08.000The amount of Hormuz outbound oil flow from Iran, UAE, Saudi Iraq, and Kuwait remains lower than it was before the war, pretty obviously.
00:06:17.000That's definitely part of it, but it is not all oil.
00:06:19.000It's also tariffs, of course, which have been spiking prices since basically they were implemented.
00:06:25.000And the biggest part of a systemic Inflation problem is a massive structural deficit that requires us to continue taking out debt.
00:06:33.000We'll get to more on this in a moment.
00:06:35.000First, the healthiest version of you is apparently the person who shops for groceries on Sunday because you go to the store and you buy the spinach and the berries and all the vegetables you're definitely going to eat.
00:06:43.000And then Thursday arrives and half of it is still in the fridge and it's just falling apart.
00:06:52.000This is why consistency matters more than an ambitious grocery list.
00:06:55.000Balance of nature makes it simple to add real whole food ingredients to my daily routine.
00:06:59.000Their whole health system combines fruits and veggie capsules with fiber and spice for 47 ingredients from real fruits, veggies, spices, and fibers, all with minimal processing.
00:07:07.000It's easy to stay consistent even during weeks when the meal plan doesn't go according to plan.
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00:07:56.000This is going to be exacerbated by the fact that we have a bipartisan agreement in this country to keep spending money, to never stop spending money.
00:08:03.000This goes back to something the president did last week at his rally at the RNC in Dallas.
00:08:09.000Here he was talking about just dumping $5,000 checks on everybody.
00:08:12.000I mean, you know what creates inflation?
00:08:42.000Now, again, that's likely not going to happen.
00:08:47.000I pointed this out on CNN with Jake Tapper that the president likes to kind of throw out these big promises and then it kind of never gets filled in.
00:08:54.000But even the fact that we keep talking about spending like this is insane.
00:08:57.000Here's Mike Johnson saying kind of the same thing.
00:09:00.000For that $5,000 check, doesn't the president need Congress to act?
00:09:05.000And are you going to carry out his wishes?
00:09:10.000I would assume, yes, he'd need Congress to act.
00:09:22.000But I think what he was articulating there, Jay, is that he's saying that if you want more money in your pocket, you have to keep Republicans in charge.
00:10:53.000And if private jet deductions matter to you more than Head Start and Medicaid coverage, you're a bad hombre.
00:11:00.000Okay, but the problem with this particular logic is that you will end up in a position of just saying the more you spend, the nicer you are, which is, of course, precisely what people on the left think.
00:11:10.000And increasingly, people on the right think this too that you are cruel and heartless and all this.
00:11:14.000If you don't just keep pledging people money, there's a solve for every problem.
00:11:17.000The problem is always to be solved with the government.
00:11:21.000This is why, presumably, the solve that was put forward by some on the Should I say Horseshoe Right or the NatCon Right?
00:11:28.000The basic idea was that the government was going to solve childlessness by just throwing money at the problem.
00:11:32.000That is not how you solve those sorts of problems.
00:11:35.000Instead, what you end up with doing if you spend this much money, huge national debt, actual inflation, and beyond that, enormous amounts of waste, fraud, and abuse.
00:11:43.000Fox News is reporting that taxpayer dollars intended to put roofs over the heads of LA's homeless allegedly paid instead for a $50,000 Tahiti vacation, a high end nightclub, and $140,000 for restoring a vintage luxury vehicle and other personal expenses.
00:11:57.000Federal authorities said on Wednesday, as agents found out across the city in an early morning fraud crackdown.
00:12:03.000At the center of that crackdown is a person named Michael Young, 46.
00:12:06.000A founder of the Culver City based nonprofit Home at Last, he receives more than $118 million in public funds through government contracts, including more than $75 million from LA Homeless Services Authority.
00:12:17.000And then he misappropriated millions of dollars.
00:12:19.000Again, that is what happens when you turn the government into a giant grab bag of cash.
00:12:24.000And now, Scott Besant was asked about inflation and how much of it is Trump and how much of it is Biden.
00:12:33.000Mr. Secretary, how can you possibly declare?0.51
00:12:36.000That the K shaped economy is over when during President Trump's second term the assets of Wall Street are booming while the real wages of Main Street have barely grown?0.75
00:12:46.000Well, it's the opposite of President Biden's term because there was a.0.99
00:13:12.000Is that the modus operandi of this administration?
00:13:14.000Well, Scott Besson is correct that you do have lasting effects of the price increases under Joe Biden.
00:13:20.000Also, inflation is a little bit too high for sure.
00:13:22.000Now, one of the things the Trump administration has said, I think absolutely correctly, is that the only way that you get yourself out of the predicament of massive national debt is by outproducing.
00:13:37.000Well, you know, if you think so, head on over to dailywire.comslash subscribe to watch the full show ad free or check out this crazy story here.
00:13:44.000Every significant movement in history has started with protesting.0.99