FULL 1% Rate Cut!?📉Fed Outlook w/ Rebecca Walser

Weak summer hiring has traders betting on consecutive interest-rate cuts through year-end, but inflation risks remain a wild card.

~This episode is sponsored by iTrust Capital~
iTrustCapital | Get $100 Funding Reward + No Monthly Fees when you sign up using our custom link! ➜ https://bit.ly/iTrustPaul

Guest: Rebecca Walser, Principal at Walser Wealth Management
Website➜  https://walserwealth.com/

00:00 Intro
00:10 Sponsor: iTrust Capital
00:50 How to prepare for next week?
03:45 How long will inflation last?
06:45 Rate cut probablity
08:15 Can job data force the Fed to play catch up?
10:00 Is 2% inflation still viable?
11:30 Howard Lutnick: Quiet part out loud; Are tariffs a tax?
12:10 Tariff rebate?
13:40 Goldman Sachs CEO on why he’s 100% in equities
14:30 How are you advising clients?
16:30 Crypto treasuries
18:45 Nasdaq x Tokenization
19:10 Adena Friedman(Nasdaq): Markets want crypto
21:30 Bitcoin or Ethereum?
22:45 Outro

#Crypto #Bitcoin #federalreserve 
~FULL 1% Rate Cut!?📉Fed Outlook w/ Rebecca Walser~
⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺⎺

Episode Transcript

Speaker 1 (00:00):
Let's dive into the FED rate outlook.

Speaker 2 (00:02):
Today.

Speaker 1 (00:02):
We'll take a look at how the FED will respond
next week. It's going to be a good one. Moname
with Paul Barren. Welcome back into the show. I do
want to thank our sponsor today, that's I Trust Capital.
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just to get started, all right. Joining me today is
Rebecca Waltzer who is coming in as an investment advisor
but also with Waltzer wealth manager. And great to have you, Rebecca,

(00:45):
Thanks for having me.

Speaker 3 (00:45):
I'm glad to be here. Paul.

Speaker 1 (00:47):
Yeah, so let's get into a few points I want
to dive in to, and really this is all about
FED ray cut. What we're trying to do is get
some analysts and also wealth management people to really give
us some framework of how the FED is going to
address the situation next week. Right now, FED rate cut
signals around a three percent inflation, which we saw two
point nine come in. Is it the new two percent?

(01:08):
My question to you is this, when you see inflation
going up right now, the likelihood of chair pale faced
with a cut in front of him, how do you
play this right now? What would be the recommendation?

Speaker 4 (01:23):
Yeah, that's a great question, Paul, and I will just
let your visiers know. So I have a tax law degree,
so I am a tax lawyer, but I also have
a finance degree and I have a global MBA from
the London School of Economics, so I'm very macroeconomically focused
in my practice. And obviously I have a lot of
people on the technical equity side, but my speciality is
tax and macroeconomic global policy. So this is right at

(01:45):
my wheelhouse and I'm so glad to talk about it
with you today and your audience.

Speaker 3 (01:49):
Powell is between a rock and a hard place. Let's
just be honest.

Speaker 4 (01:52):
The dual mandate that Congress has given the FED is
they are in conflict. In other words, in exactly a
time such as this where we just had the largest
initial job was claimed since October of twenty twenty one,
and we're really feeling the pressure now on yields, right,
you can see it, and you can see already the
rates have dropped, they've preceded. Is I love when the

(02:12):
market precedes POW and what the Fed's going to do,
because that pretty much tells the FED, this is what
you're doing, and that's it. But you know, the dual
mandate Paul is the problem here because when you're trying
to sustain or help unemployment, you want to have a
very lower cost of capital. You want to have a
lot of access to capital, and so corporations can go

(02:32):
out and higher. Well, if you make and you have
an easy or a stimulative policy in the FEDO on
the monetary side, then you're going to be creating more
pressure on price because you're going to be flooding the
market with dollars and more dollars chasing the same finite
scarce set of goods and services.

Speaker 3 (02:49):
That we have. Basically means we're going to have inflation.

Speaker 4 (02:52):
And so these are mandates that are in opposite of
each other that are in conflict with each other, and
it really puts the FED in a rock in a
hard place when you are starting to see the weakness
and you're also dealing seeing inflation, and you know that
is a really big problem. He hasn't had to really
deal with that, I would say in the last five
plus years, four years at least, he's had a really

(03:13):
strong economy on the JOMPS front, and now he's having
to go back and deal with that while he's still
concerned about inflation with the tear still yet to come,
especially with China.

Speaker 1 (03:23):
So okay, so you got a lot happening here. I
want to go back. If you want to find the
last time before this cycle that the central Bank's eased
policy with core pc inflation at three, you'd have to
go back to the early nineteen nineties. I'll zoom in
on that so you can kind of see that statement,
and that was you know, the internet was barely alive
at that time, So that's how long ago this kind
of situation has occurred. And you look at that right now, Rebecca,

(03:47):
and I'm just kind of curious, do you think that
this is going to continue to see rising inflation going
into the fed's cutting cycle if they actually agreed to
do it. Do you feel like we're going to continue
to see high inflation.

Speaker 4 (04:02):
The fact is is that we really changed our monetary
policy after the global financial crisis in two thousand and
two thousand and nine, and we really did implement monern
monetary theory, which mono monetary theorists, I'm sure you're aware, Paul,
and your audience is very educated, is the theory that
you can print infinitem, you can print at nauseum, and
as long as you can elect enough tax base to
service your interest on your debt, not even actually the

(04:24):
retiring of the debt, but just servicing the interest, then
you will be okay. That is a kinesy and economic model, obviously,
and that is what we have followed. And that is
the issue is twenty twenty. If we have to pinpoint
one issue, that will probably go back in time. All
the white papers will be written fifty yearsrom now. They
will probably pinpoint coronavirus. Because globally the world printed the

(04:46):
equivalent of about twenty trillion US dollars, not all of
it in the US, obviously, the rest of the globe
did about ten We did about ten between both fiscal
and monetary stimulus.

Speaker 3 (04:56):
When you put that much money in and.

Speaker 4 (04:58):
That short of a time for if you just look
at the m TO money supply from just even March
to June of twenty twenty, it jumps exponentially and it
is never retrenched. We had him to come down a
little bit and then come back up. We have the
largest m TO ever in June of this year. So
when you put that much stimus into system, you can't
have transitory inflation. And now I feel like the Fed

(05:21):
realizes they're up against the situation where it's going to
be constant easing, easying and the constant easing because what
has happened, Paul, is we've had the corporations, the banks,
the real estate, every industry in the world and specifically
here in America has gotten used to very cheap credit,
and so that is created acid bubbles. Real estate probably

(05:43):
the largest right commercial acid bubbles. Like if you evaluate
a property on a two five or a three to
five rate, is a lot of a difference on the
cash flow discounting when it's done at a six five
or a five to five normalized rate. So we have
created acid bubbles and that means that we have to
constantly grow the money supply in order to be able

(06:03):
to sustain this, and that's the problem.

Speaker 3 (06:05):
It's unsustainable.

Speaker 4 (06:06):
So inflation is by definition at this point where we're
at interest now the second largest expense in the federal budget,
we are entering a debt spiral. And this is kind
of the interesting part of the crypto space because the
new technology frontier really is what most real economists are
counting on to outpace the interest growth. So, in other words,

(06:27):
interest is growing so fast that we have to have
something massive like the Fourth Industrial Revolution come along and
grow even faster. Otherwise we're going to enter a debt
spiral that is not recoverable from. It's just a mathematical
certainty at this point.

Speaker 1 (06:39):
Yeah, okay, So, as lenn Aaldo would say, nothing stops
his trained is what we're dealing with right now, exactly.
Of course, Now there are some ways you can get
around this before we go into that, and we're going
to talk about stable coins in your opinion on that.
In a second, I want to jump over to poly
market real quick. This is the poly market for how
many fed rate cuts. I'm going to zoom in on
this for you guys to see it really closely them

(07:00):
and I'll highlight right there, and what we're looking at
right now is the probability of three three cuts up
to seventy five basis points, two cuts fifty basis points,
and then we even now for the first time, we've
seen one hundred basis points on the chart from poly
market showing up. So my question to you, Rebecca, what
happens next week. Did we get a quarter, did we

(07:22):
get fifty? What are you thinking?

Speaker 4 (07:24):
I think that Powell probably wants to maybe lean towards fifty,
but I don't think that he'll give the administration the satisfaction.
And I also think that a fifty bit cut will
actually actually make the market freak out a little bit.
I think that they would be taking that as an
indication that FEDS these more weakness than what we're seeing.

Speaker 3 (07:41):
So right now, odds on eighty eight point eight.

Speaker 4 (07:43):
Percent OUs of this morning that we're just going to
get a twenty five bit cut in this next September seventeen.
Then we'll probably another twenty five bits in the October meeting,
and the final twenty five pips in the December meeting,
and probably pick up another twenty five pips.

Speaker 3 (07:55):
In the January meeting, so you'll have three.

Speaker 4 (07:57):
To four and very short order in the next couple
of months, right.

Speaker 1 (08:00):
So that's a full that's a full point by January.
So this is still all pre Palell's exit in May
of next year when you look at just the BLS
data that's been coming in. This was lance for Roberts.
He was kind of hitting on this and the fact
that we've seen this much incorrectness in overall overall job data,

(08:21):
and you look at where Chair Palell is setting because
I mean, they clearly either I can't say that they
knew that this was that far inaccurate, but let's assume
that they did not, and they were acting accordingly, holding
rates for higher longer. Now that they have data that
repositions them, you don't think that they would try to

(08:41):
do a catch up. You still think that quarter is
the way to go.

Speaker 3 (08:45):
I mean, I.

Speaker 4 (08:46):
Don't think I think that the right answer depends on
the question that you ask.

Speaker 3 (08:49):
Right, if you ask me what is the right thing.

Speaker 4 (08:52):
To do for refinancing our debt and controlling our interest expense,
I would tell you we have to get the cost
of fund. We have to get the FED funds right
down so that we can reissues and have interest come down.
But if you ask me what is the best thing
to do for the solvency of a nation and to
preserve the US dollar as the global reserve currency for
the longest amount of time, I would tell you absolutely

(09:13):
not an easing monetary policy in any sense, because we've
already passed the point of the easing that we can
sustain without having massive other changes. We've already gotten to
that level and people just aren't aware of this yet.
But this is going to be a massive issue for
whoever takes control of the FED for power leaves.

Speaker 1 (09:35):
Okay, so this gets into a lot of detail because
obviously there are some people that believe Trump is on
a mission to try to devalue the dollar. This would
of course stabilize the potential of American supremacy, possibly going
to stable coins. I'll talk about that in a second.
But also gold. We've seen gold hitting all time highs
and a lot of countries that have started to accelerate

(09:56):
their accumulation of gold. That's been going for quite some time.
If you look at the inflation rate, I'm going all
the way back to twenty sixteen on this chart, and
you know, we've been able to kind of hold it
until we hit you know what, and that's when everything
kind of fell apart, obviously because of the amount of
money being printed. Is there ever a possibility that we

(10:16):
can return to a two percent inflation as a baseline.

Speaker 4 (10:22):
No, in my professional opinion, absolutely not. And you kind
of saw Pow talk about that at Jackson Holk.

Speaker 1 (10:29):
I want to go to a clip real quick, because
this is obviously we're going to talk about what is
affecting Americans right now. You know, higher prices are definitely
hitting the American consumer. This is Howard Luckne. Let me
play this for you. Let's go to st one.

Speaker 4 (10:43):
Tariffs are bringing in forty billion a month, reducing our deficit.

Speaker 1 (10:48):
You know how much taxes we'd have to charge Americans?

Speaker 5 (10:50):
Would you have that much money?

Speaker 1 (10:51):
You know, I do want to, so there you go.
How much we'd have to charge Americans if we didn't
have that. But in reality, we've seen inflation now up
to two point nine, looks like it's going to be
on its way up. We could be paying for that anyway.
What is your opinion right now on tariffs? Is this
good for the country. Not good for the country.

Speaker 4 (11:13):
Yeah, so I think tariffs can actually be deflationary because
they can bring prices up to an extent that less
people have want to buy it and therefore lowers demand.
And you can actually get deflation when you implement a
terror policy, and actually has happened before in the United States. However,
we have to have an administration that comes up with
unique solutions to try to save us from a debt collapse,

(11:36):
and the tariffs are one solution to let an expoint.
It replaces a lot of tax base that we don't have,
but also, you know, possibly looking at a non true
free market capitalistic idea of a quasi public private partnership
between the government and private corporations. And with the advent
of AI, I think the AI corporation is the new country.

(11:59):
I think country' sporters become less and less relevant, and
basically when we get into the full arms interesting AI space,
it's going to be more about the corporations that run
it run the world.

Speaker 1 (12:09):
Unfortunately, you think there's any possibility that tariffs or that
Trump could try to do a hail Mary so that
he could continue to accelerate these tariffs and do like
a tariff rebate of some sort. You know, I was
tweeting on this. You look at just the amount of
money that has been collected right there. I mean, this
is astronomical shift in tariff revenue. And we have to

(12:33):
understand either they're going to pay down the debt or
try to associate that with some paydown, or they got
to figure out where to put this to work. Would
they do that? Do you feel like Trump might try
to do some little stemmy to I mean, there's.

Speaker 4 (12:46):
Definitely been some tweets about, you know, giving every American
x amount of the tariff money. And I'm sure that
the American public would love the tarrors after that, probably,
But the truth is, Paul, I mean, we were not
collecting anywhere near enough tax revenue to just maintain our
annual fiscal budget. I mean, to give us a rebate
on a TEARFF policy that brought in thirty billion in
a month, that sounds beautiful and great, except for we

(13:07):
are so underfunded by our own you know, tax revenue,
that we don't really have the money to rebate it.
It would just it would really be more of just
give me a giveaway, just to appease the American public.
You know, it's certainly not the most economically viable option.

Speaker 1 (13:22):
Yeah, so, Rebecca, when you look at that and you
think about the halves, the haves nots, because what we're
dealing now with is a situation where people are going
to have to get into assets. That's the only thing
that's going to be somewhat you know, inflationary proof. The
dollar is be debasing clearly through what's happening right now
with our debt. You've got Goldman Sachs CEO. I'm going
to play a clip for you. I want to get

(13:44):
your opinion on this. Let's go to Satu.

Speaker 5 (13:46):
You know it's so you sound so much smarter when
you bearish. Then I used to say what do you think?
And then I said what are you? How are you positioned?
And you know, you know I have all these bearerssed thoughts.
But I'm one hundred percent in equities personally right now
because I because we're about to lower interest rates into
into into a bull market.

Speaker 4 (14:06):
Do you think it's an epic moment?

Speaker 1 (14:07):
Is the trader that is Lloyd Blank find buying all
of the mag set Like when you say you're you're
one hundred percent of what does.

Speaker 6 (14:14):
The portfolio look like.

Speaker 5 (14:15):
I think it's a phenomenal moment. It might be. I'm
not a great technologist, and I've lived through waves of technology,
and I experience things that change the world, and I
experienced things that changed our fortunes because we overinvested in stuff.

Speaker 1 (14:28):
Seven thirty seven percent of total US stock market right
now are tech stocks, So that share doubled in the
last five years. So would if you're you are advising clients,
So how are you telling him to play this? I mean,
is it all in the tech sector? Are you looking
at midcaps? Are you trying to look at gold and
silver diversification into crypto? What's your play right here?

Speaker 3 (14:51):
Yeah, that's a great question.

Speaker 4 (14:53):
So I've definitely been a gold bug since twenty twenty
because I could see with the global stimulus, and another
thing happened with gold that people don't realize. At the
end of the global financial crisis, the you know World
Bank and the monetary you know regulatory global machinations that
be basically came out with something called Basel three, which
basically moved gold from a Tier three to a Tier

(15:15):
one asset. And so you started seeing a lot of countries,
China obviously Turkey really buy up a lot of gold
and then actually call London and the kind of states
and say, we actually want you to deliver the actual gold, like,
no more trust, We're going to verify sin this's our gold.

Speaker 3 (15:33):
So I think gold is a substantial play.

Speaker 4 (15:36):
So I do think that the way forward is we
believe in equities. We really believe that this is the
convergence of all things. What I mean by that is
this is the global sea change over where the US
dollar will no longer be a unipolar reserve asset, but
it will be multiplarity that we share with the East
and specifically the bricks block and everything that China has
done to really become the center of that world.

Speaker 3 (15:58):
I believe that's where we're headed.

Speaker 4 (16:00):
There is going to be a currency shift over and
that is going to kind of occur as we get
into this debt spiral and the only option that we
have is crypto and the AI frontier robotics, quantum computing, obviously,
you know, all of the new technologies of the fourth
Industrial evolution that we'll have to merge together and really

(16:20):
kind of bring our growth higher than our losses on
the debt side.

Speaker 1 (16:25):
Okay, I'm looking at this the treasury model. This is
why corporations are now looking at and nations are now
looking at holding crypto. I'll zoom in on this for you.
Mainly it's a hedge of inflation. Clearly, what we've seen
there diversify currency exposure. That's something that I think everybody's
The liquidity side of it and the digital seven those
are all very very attractive. You know, when you look

(16:45):
at how this plays out, sovereigns people are starting to
move in this direction. Do you think we'll see countries
and corporations. We've already started to see these digital asset
treasuries growing like crazy on Wall Street here recently micro Strategy.
You've got bmn R with Tom Lee going nuts out
there with Ethereum Solana just hit the street. What's your

(17:08):
make of this? Do you think we'll have businesses starting
to invest more into cryptocurrencies, gold, other hedges out there
other than the US dollar.

Speaker 4 (17:16):
Yes, yes, because they are going to start to see
the inability. It's going to become more clear in the
next eighteen months, our inability to sustain our interest payments
with just our regular tax revenue. And again the Treasury
auctions that the Treasury has to run right now things
that they've never done before. And so yes, I do

(17:37):
think that corporations finance, you know CFOs are saying, look,
there's there's problems here in the US. We can see
the divergence and the move away from the US to
the East to the bricks block, the bricks nations. There's
forty plus percent of GDP is now represented by the
bricks nations. So that is problematic because we in the
United States don't have as much.

Speaker 3 (17:58):
We are less now than the bricks lock put together.
And that's a concern.

Speaker 4 (18:02):
And when you have you know that kind of problems
amidst geopolitical problems obviously with Russia and the US, India
and the US, now China certainly and the US, which
I would say it would be the biggest problem, you
will see corporations that are doing stuff globally and internationally
to get away from the risk of the US dollar.

Speaker 1 (18:21):
Yeah, okay, this is getting pretty crazy out here, because
how long do you think we are before we see
these kinds of major moves? Is it within a five
year cycle, especially in what we're dealing with right now,
you think it's.

Speaker 4 (18:34):
That we see massive changes in thirty six months or less,
and I would expect massive changes even in the next
eighteen months.

Speaker 1 (18:41):
My last question to you is this, you said we're
going to see a lot of quick moves here. One
of the things that is happening is Nasdaq, of course
filed with the SEC. They're going to token I stocks.
So this is going to a lot of investors trade
equities on chain. This is full shareholder, right, This could
change a lot within how we're going to see stocks
traded quickly? Yeah, and then absolutely yeah. So I'm going

(19:03):
to play a clip of Adina Friedman, who is the
CEO of Nasdaq, and she goes on on this let's
go south three.

Speaker 6 (19:11):
So this morning we announced that we're going to be
bringing tokenization into our markets, so making sure that equities
are tokenized and traded on market in the markets.

Speaker 2 (19:21):
Twenty four by seven, three sixty five equities just let
it rip constantly.

Speaker 6 (19:25):
We handle like three million messages a second. It's hugely scaled.
But then at the same time, you know, once that
trade occurs, there's a different process, and then the post
trade processes we know is an area where tokenization really.

Speaker 2 (19:37):
Shines famous curve, which is like you get this early
font of insanity, and then there's the trough of disillusionment,
and then you grow through and it's it Does it
seem like crypto is actually a blockchain? It's just it's
finally real.

Speaker 6 (19:51):
We finally have this convergence of regulatory of regulation between
the traditional markets the digital markets. How do we bring
it all together to fronkly advance markets.

Speaker 5 (20:00):
How do you justify it?

Speaker 1 (20:02):
Like, hey, it's going to be worth the fact that
none of us are ever going to sleep again.

Speaker 6 (20:06):
First of all, I've been I started it nowas like
in nineteen ninety three, and back in the nineties we
had a vision to go to twenty four to seven markets.
The technology wasn't there to do it.

Speaker 1 (20:16):
All right, So do you think that will help, Rebecca?
I mean, are we going to see an age now
where tokenization of securities movement on chain and this whole
new evolution where we're going to be able to possibly
even use this and yield other instrument bearing platforms out
there for loans, et cetera on our assets. Is this
going to help at all with what our situation is?

Speaker 4 (20:38):
Well, I think it's great that the Electronic Exchange Index,
you know, group at Nazac is the one to move
with this first. And it's funny because interactive brokers, you know,
is one of their biggest things is oh, you know,
you can trade twenty four to seven and it's a big.

Speaker 3 (20:51):
Draw to people.

Speaker 4 (20:51):
It really truly is as long as there's regulatory framework
around it. And what regulatory framework are you dealing with?
You know, a token that's being issued under the US
regulatory framework or is this a company training in Hong
Kong and it's a different regulatory framework and they don't
have the reserves.

Speaker 3 (21:07):
So it's just the tokenization has to be. People have
to buy into that, and as soon as they do,
and I don't know that they.

Speaker 4 (21:13):
Actually a lot of people, your user, your viewers, Yes,
but most average laid people aren't going into the wheats
and following out what's really happening the under the curtains.

Speaker 3 (21:22):
With the blockchain.

Speaker 1 (21:23):
Hey, well that's what we're here for, is we can
help them get there. And last question to you, and
I have so many Actually I really want to go
down the gold idea with you, but I'm thinking eth
and bitcoin. I'm looking here at the two titans that
are ethereum and bitcoin right now that's Michael Sailor and
of course Tom Lee, both of which have pretty much
put this on main street in terms of now investors

(21:45):
getting exposure to this. If you had to play right
now and you have a lot of investors that come
to you for this, would you go bitcoin or ETH
or would you diversify?

Speaker 3 (21:56):
Oh?

Speaker 4 (21:57):
Oh, you know, obviously the og has been coin, but
Ethereum smart contract, you know, platform and their implementation on
the stable coin and how stable coins are leveraging the
eth universe. I think right now I'm going to have
to I know it's been maybe not as in favor
as all of the new hot ones, but I think
I'm gonna have to go with Eat on this because

(22:17):
of the development of the tokens.

Speaker 1 (22:20):
Yeah you're Tom Lee fan, Well, good for you. I
would probably have to join you on that, just in
the sense that there's a lot of upside there. A
bitcoin to me, is still a digital gold alternative out
there that will get into We'll bring that to you
guys for another question about what tokenized gold could look like. Rebecca,
it has been great having you on. Thank you so

(22:40):
much for coming in today. We appreciate it.

Speaker 3 (22:42):
Thank you for having me.

Speaker 1 (22:44):
You bet are you guys. If you are not part
of the Diamond Circle, make sure and get in right now.
You can of course join that for absolutely free. It's
our own private group. I do our Baron Market Edge,
which is my personal email out to you what's happening
in the market, how we're seeing things move, and also
a lot of the research that we do. It has
a lot more depth than what we just deliver here

(23:04):
on the show the best we can, so get into
that list down below. It does help. Also, if you're
not following me on X and do that. It's at
Paul Baron. We'll catch next time right here on the
Paul Baron Show.