258
===
[00:00:00] Welcome back to the What More podcast. I'm your host, Quinton Harris. You doubted for episode 258. Hey, in this [00:00:05] episode we've got fed cuts, lower rates, lower mortgages, and more all in this episode [00:00:10] at What's your, 1 more. [00:00:15]
Okay, so welcome back to the show. Today is September 19th, the day [00:00:20] after the Fed. You know, it's, I think by this point, if you haven't heard what I'm about to talk about [00:00:25] in the form of a recut, then you're probably living under a rock, or you're just really not in tune to what's going on in the [00:00:30] financial markets.
But finally, after a. Quite some time. We've had a Federal Reserve rate cut. [00:00:35] It's been anticipated. I think everyone was expecting it. The question was, is it going to be a quarter [00:00:40] rate cut to the Fed funds rate or was it going to be a half a basis point cut and ended up [00:00:45] being a quarter basis point, as expected in the market.
And, you know, some could argue that this was a [00:00:50] very, Forced measure. It wasn't really like, it was almost like the, a preemptive measure by the Federal Reserve. I don't [00:00:55] think looking at the, the records of voting yet, seven of, you know, the voting members saying they didn't [00:01:00] wanna do it. and I think hesitancy would be the word, you know, they kind of did it just because he kinda was forced [00:01:05] into a corner, maybe by the media, maybe by the administration.
But I think there was a couple things that the market [00:01:10] was expecting here. One that to happen, and then two, some comments about what's to come, right? Because [00:01:15] we've had a lot of mixed bags there at the podium by our friend Podium Powell, which I'll get up there and talk about here in a minute. [00:01:20] But the reality is this, is that the markets, we were waiting as a market on a quarter.
We were [00:01:25] hoping for a half. We didn't get that. So then there was this kind of. Uproar and [00:01:30] rise in the industry of like, oh my God. Like, like why? Why? Why are we treating? [00:01:35] Why are we not getting what we expected? Why are rates not just falling off a cliff and getting better? Well, it's [00:01:40] because it was already baked into the market.
It's something that was anticipated for quite some time. This is [00:01:45] nothing new to the markets. And, I think again, you know, a lot of people are going, well, why did the 10 year [00:01:50] yield not go down below four and stay there? You know, it was there when they made the rate cut and announced it, and then it [00:01:55] went away.
Well, I think you could say that, that's exactly what happened, you know, and before I [00:02:00] talk about that, let's face it. Right now as I'm doing this podcast on the 19th of September, we're [00:02:05] currently like looking at some of the lowest rates we've seen in over a year. So I don't want our [00:02:10] listeners to, to get lost in what I'm about to say here and don't get it twisted.
Like if you're looking at a government [00:02:15] loan that's like an FHA VA USDA loan, you're below 6%. [00:02:20] Repeat below 6%. If you're doing a conventional loan, you're just below [00:02:25] six, three eights and six and a quarter. Like these are low sixes. We were talking about this six months ago, and we said if we [00:02:30] got this kind of rate, we would have massive market movement.
Now, I'm not saying that we're not [00:02:35] gonna have it, but I can tell you if you look at the uptick of applications, especially on the refinance side, there's [00:02:40] significant signs showing that this is the market's appetite and what we've been looking for, [00:02:45] and it's here. Listeners take advantage of that. Agents take advantage of that.
Like it's almost time like we need to go, [00:02:50] Hey, wake up. Like a lot of us have been asleep for a long time, but this is the opportunity that we have [00:02:55] been really discussing and waiting on and it's here right now. So, you know, jump into the [00:03:00] market if you've been on the sidelines waiting if you can, thinking about refinancing, get in the market.
'cause the rates are there and the timing's [00:03:05] now. Now there's gonna be some people that wanna get on here and say, yeah, but you know. Until I see lower [00:03:10] rates, I'm not gonna do anything. Well, I mean, yeah, you could, but how many times have we seen this story where I'm gonna wait on [00:03:15] lower rates and then all of a sudden the rates get worse, like significantly worse?
And I'm [00:03:20] not anticipating that to happen, but history tells us it's very plausible and we've seen it happen [00:03:25] already here just in the last 24 months. But let's go back to this. So the 10 year yield. [00:03:30] Prior to Powell and company going to the podium after the announcement drifted [00:03:35] down below four, drifted down below 4%, which was a significant move because if we close below [00:03:40] four, that's a good sign.
We haven't been able to do that in some time, but we got into that good territory of like 3, 9, [00:03:45] 9, 4. It was like, man, this is going great. And everybody's feeling, you know, kind of the vibes of, wow, we, we [00:03:50] might get there. And then podium, Powell gets to the mic and he does what he does, which is ruin [00:03:55] every good thing that we have going right now.
And he starts saying things like. Well, [00:04:00] you know, this rate cut doesn't lead to future rate cuts. It doesn't mean that this is what [00:04:05] we're going to do. we did this because quite frankly, the labor market is, [00:04:10] it's not as, it's not as good as we thought. It's not as stable. it's actually below. We thought it would be soft, but it's actually [00:04:15] below soft.
It's actually softer than we thought. And he even went as far as saying that the [00:04:20] Federal Reserve is okay with zero [00:04:25] net gain in jobs. So zero net gain, meaning [00:04:30] that, that if we don't gain any new jobs and nothing else happens in the market, he's [00:04:35] okay with that. Now, for me, that is the most ridiculous thing I've ever heard.
Like, I mean, if you [00:04:40] don't see any improvement, like you're just your steady course, no improvement. I'm good with that. Like. [00:04:45] I don't think any of us would be okay with our 401k account. Not going up, just [00:04:50] staying flat. I don't think any of us would be okay with our children in school not learning anything and getting better and just remaining [00:04:55] status quo.
I don't think any of us would be okay with doing that in our own lives, in our own work, but yet, [00:05:00] you know, someone that's in charge of economic policy is okay with that. And I think that was a really [00:05:05] dumb comment by Powell because he followed it up with, well, you know, if you consider the population [00:05:10] growth in the workforce, zero gain is actually, you know, that's actually.
Good because we're [00:05:15] actually gaining jobs, but the workforce is creating, but we're not creating more jobs for the people that are currently in the [00:05:20] workforce. And I was like, that's completely like not okay and not good. But it did bring [00:05:25] to light a point we've been saying that it's labor over inflation, right?
This is the way that I [00:05:30] believe the Federal Reserve is saying, Hey, listen, we're setting the tone for the job. Reports aren't good. If [00:05:35] they're just below not good, we're not gonna cut. But they're gonna have to get significantly worse for [00:05:40] us to cut. We're gonna see start getting negative, negative reporting jobs being taken away.
It's like, dude. [00:05:45] Where are you at? Like we've been saying that over the last six months. These reports, the ones that you're seeing, they're not accurate. They're [00:05:50] not real. and then the ones that you are getting from the private sector are real and are accurate and they're far below the [00:05:55] expectations.
this is not a good market. Right. And the zero gain, I mean, you're gonna see unemployment rate go up, you're not gonna see [00:06:00] it remain consistent. It's going to go up, it's going to get worse. The signs are there. We've been pointing and showing where that's [00:06:05] at, and I go back to how the hell can I see that?
And they can't. Right. How can other people see this and they can't? [00:06:10] So podium Powell, you know, for me, I look at it this way, it seems like it's much [00:06:15] easier for him to get up there and make comments about like, well, I'm okay if the job market doesn't grow. [00:06:20] You know, I'm okay if, you know, just remain the status quo.
Well, let me kinda show you some things about [00:06:25] why I think he may think that's okay. So we did a little research here. I think this is interesting here. So here's [00:06:30] some things that drive me nuts about the FOMC and the, you know, the Board of Governors, if you may, up [00:06:35] there. It's almost like Camelot, right?
and what I mean by that is it's, you know, [00:06:40] everything's great in the kingdom, but outside the kingdom. And it, it must be good because it's good inside here. Right? [00:06:45] And the reality is, you know, there's a lot of frustration growing in the workforce. There's a lot of [00:06:50] frustration growing in the United States and there's a lot of frustration growing amongst, you know, [00:06:55] our citizens with the.
Where they're trying to get to, but how they have to get there and the amount of money that's outpouring [00:07:00] in people's budget each month are, it's not getting better, right? A lot of that stuff's getting worse on both ends of the [00:07:05] spectrum. Income shrinking, the output's increasing, but that's easy when you're a [00:07:10] fed Chairman, and you're making close to $300,000 a year.
It's also really easy when you [00:07:15] can say that when you have. Close to $50 million in filings, and earnings being [00:07:20] showed, right? And yeah, I'm calling you out on that. So what you've done great for yourself in life, but the reality is it doesn't [00:07:25] mean your life is the same as everyone else's that you're making economic policy for.
Today's episode is brought to you by [00:07:30] Texana Bank Mortgage. They're coming to the table with a revolutionary product. It's called REMLO Real [00:07:35] Estate Mortgage Loan Originator. And what they're doing is they're taking real estate agents and they're taking loan [00:07:40] officers, and for the first time in history, they're putting 'em together under one umbrella.
They're actually taking two industries right now that sit on [00:07:45] top of each other, and they're putting them together and backing it by full service bank licensed in all 50 states. [00:07:50] So imagine this, you're not just an agent anymore, you're a full service agent. You're the single trusted point of [00:07:55] contact for your client.
This entire process, you're seeing the loan and the home search front to end. It's going [00:08:00] to change the dynamic of real estate and mortgage lending together. Now, if you're a real estate agent, I want you to do me [00:08:05] a favor. I want you to go to askaboutREMLO.com. That's askaboutREMLO.com [00:08:10] because what you're going to find, there are significant details about this program, how to enroll and how to gather [00:08:15] more information.
So if you're ready to adapt and thrive. Go to askaboutREMLO.com. That's [00:08:20] [00:08:25] askaboutREMLO.com.
the reality is when you look at all these Fed members and you look at the amount of money that they're paid, and anywhere from [00:08:30] 225 to close to $300,000 to be on there, that's a healthy living supported [00:08:35] by the taxpayers of the United States. It's also, if you look at the fact that they can even have.[00:08:40]
And I know this sounds crazy, but I think I'm onto something here. The fact that they can even have investment [00:08:45] strategies around a market that they technically control is the most absurd thing I've ever heard in my life. You know, it [00:08:50] wasn't two, three years ago when we saw multiple Fed presidents get in trouble for trading on [00:08:55] bonds.
For God's sakes, trading on bonds. The one item, the one instrument that they control [00:09:00] with just one point of narrative that goes up or down, fluctuates 10 basis points in a day when they go to the [00:09:05] microphone. They were able to invest in that. Like could you imagine if you could predict a ball [00:09:10] game, the outcome, what you would bet on that.
That's exactly what was going on here. I mean, go to hard rock [00:09:15] bets.com. I say that 'cause you're far, but, and you could predict, I'm gonna say tonight's game's, Buffalo versus Miami. Right? So let's [00:09:20] have a little fun with this. If you could predict, oh my God, like. I know what's gonna happen because I control the outcome [00:09:25] of that game.
I think Buffalo's gonna win. I think Buffalo's going to, win and the over is gonna be over 50 points. Like [00:09:30] if you're, if you could do that, you'd bet the damn house on it. What's exactly what these guys are doing. And they got away [00:09:35] with it for years. And it wasn't until the tail end of COVID that the government woke up and was like, Hey, that might be insider [00:09:40] trading.
Like no shit. Right. That's exactly what it was. And you look at these guys' net worth and all the [00:09:45] accumulation they've had, and I know you guys have heard me pick on Bostic on here. I think that,I heard him talk about that a little bit and, I [00:09:50] heard him talk in person and you guys know how I feel about him, but the reality is all of these guys [00:09:55] have a financial background through academia.
And then they took that and they applied it to the [00:10:00] fact that they controlled the outcome. And they've all done very well on it. But yet all of them claim what we [00:10:05] didn't know we had a middleman that was doing all of that. We didn't know that. I guess where I'm going with this is. They've all done [00:10:10] very well on their own, ability to control some of the markets and the outcomes.
And you could say they're betting on it and they have, [00:10:15] and they've done a really good job with it. It's a real easy way of getting up there and dismissing what's [00:10:20] going on in the economy when you've kind of controlled your own outcome and now you're really controlling other [00:10:25] people's outcome with some of the mannerisms and some of the policies that you're putting in place.
And I think it falls a little short on these guys [00:10:30] when they get up there and arrogantly talk like they're doing. There's few that understand what's going on, but the reality [00:10:35] is most of 'em don't. So I get a little heated about that because all they're doing is. Anti [00:10:40] stimulating the economy, if you may, and hindering the growth.
We're not even close to the neutral rate right now. They talk about [00:10:45] getting back to neutral. They're not even close to neutral, like a neutral rate should be somewhere like three and a quarter, maybe even 2, 7, 5. You [00:10:50] could argue that not where it is today at the four, you know, 3, 7, 5, 4 range on there. [00:10:55] it's absurd, right?
We're still have more custom go and then I go on that because if you look at the dot plot map, they said, oh listen, [00:11:00] we're only gonna have like maybe one more, two more cuts and then that's it. Okay. Another. [00:11:05] Another irrational decision. Like, you know, you can forecast that, but yet you're saying, Hey, it depends on the data [00:11:10] that comes out from the job markets and are we gonna have zero gains or we have negative gains.
So, a lot of that [00:11:15] stuff is a little frustrating on here. But even with all that frustration, look at where we are currently on interest rates [00:11:20] right now. I go back to that. We've talked to people, we've interviewed people, homeowners alike. [00:11:25] Literally, I wanna make sure you understand this. Like if you were applying for a government loan today, it doesn't matter what [00:11:30] mortgage lender you call, you're gonna be in the upper fives.
If you're applying for a conventional loan, you're gonna be the tell in lower [00:11:35] parts of the sixes. It's a great opportunity to create more affordability. It's a great opportunity to take advantage of [00:11:40] that equity position that you have in the home. Maybe pay off some of that higher end debt that you may have been accumulating.
It's a great time to do [00:11:45] that. I highly recommend it and definitely want you guys to take advantage of that because news is gonna talk about [00:11:50] what could have been, what is, what isn't. The facts are there's great opportunities out there. Take advantage of that and get into that [00:11:55] market because it is a big win.
On our next episode, we're gonna go and get Dan Habib in here. Talk a little bit more about the Federal [00:12:00] Reserve. We're gonna pick on them a little bit more, but also talk about opportunities that arise from that because there are some big [00:12:05] opportunities that came from the meeting this time Plus future meeting coming up in the next six weeks.
Till then, hope you guys have a great week. [00:12:10] We'll see you the next episode at Watch Your 1 More.
I got one more shot. I'm gonna make it [00:12:15] one more chance. [00:12:20] [00:12:25] I'm.
