A major shift is underway at the most important global economic institutions.
For years, central banks across developed nations have kept interest rates low and monetary policy loose. Low rates translate to cheap credit and plentiful liquidity.
That’s helped fuel the AI infrastructure spending boom that’s propping up the economy.
Cheap credit is also the perfect backdrop to fuel risky assets – everything from AI stocks to crypto and blockbuster IPOs.
But the liquidity and credit outlook is slowly starting to change. Interest rates on the long end of the yield curve have been rising rapidly. Now central bank policy rates are creeping higher as well.
Here’s why that marks an end of the easy money era – and what it means for asset prices everywhere…
Larry Benedict went 20 straight years on Wall Street without a losing year. Jeff Brown recommended Bitcoin at $240 and Nvidia in 2016. Now they've issued the biggest warning of their careers: The U.S. dollar will break on Wednesday, October 7, at 1:00 p.m. ET – on a deadline set by the federal government… It could lose up to a third of its value. Or even half… And the money doesn't vanish. It moves into a market that could have potentially handed you over $410,000 the last time something like this happened. On Wednesday, September 30, at 8:00 p.m. ET, they share all the proof, free. Click here to reserve your seat for free.
Everyone is too distracted by the mainstream AI trade – chasing every bit of news about SpaceX, OpenAI, Anthropic, and Nvidia – all while missing where the real wealth will be made. Porter Stansberry, CEO & Founder of Porter & Co., don’t want you to miss it. That’s why he's laying everything out for you here. Ignition Point is now available to stream here.
Investors pore over central bank decisions and contemplate what they mean for the rate outlook – and for good reason.
Monetary policy shapes everything from the economy to all corners of the capital markets.
Interest rates impact borrowing costs for businesses and consumers alike. When rates are low, cheap credit tends to boost the economy and the earnings outlook for corporations.
Low interest rates also encourage the use of leverage to speculate on stocks, property, crypto, and so on.
The AI trade and this current bull market kicked off in late 2022, alongside the launch of ChatGPT. Central banks then began unwinding their post-pandemic rate hikes over the following few years.
Loose monetary policy hit a peak in late 2025, when 85% of central banks around the world were cutting interest rates.
But since then, a new shift is underway. It’s one that is gaining steam and could present headwinds for investors as this era of easy money fades…
Last week, the Federal Reserve hiked interest rates for the first time in over three years. It was a unanimous decision to raise interest rates by a quarter point to a range of 3.75-4.00%.
Comments from Fed Chair Kevin Warsh hint that more rate increases are in store. The Fed wants to tame inflation while the economy is holding up.
But the Fed is hardly the only central bank making a move.
The European Central Bank and Bank of Japan raised rates at their September meetings as well. Others like the Bank of England and Bank of Canada kept rates on hold but are sounding more hawkish because of inflation.
The percentage of central banks around the world hiking rates stood at just 15% a year ago. Now that figure stands at 33% and could rise further still.
The last time a similar proportion of central banks were hiking rates was in late 2021. That was just ahead of the peak in the S&P 500 heading into 2022’s bear market.
But it wasn’t just stocks seeing volatility back then. Everything from bonds to precious metals and cryptocurrencies took a hit as central banks removed the punch bowl from the party.
As the Fed and other central banks around the world move to increase interest rates, the punch bowl is going away again, and the effects could be felt across the market’s most popular trades.
That’s one reason my colleague Jeff Brown and I are preparing for our emergency briefing next week.
Most people assume that their money is safe. But the dynamics we see at play are creating warning signs we don’t want you to miss…
The dollar itself is in danger, and during our briefing, we’ll explain what we see coming – and how you can prepare.
In fact, if you’re ready, you could turn this threat into a windfall. To attend on September 30 at 8 p.m. ET, all you need to do is RSVP here with one click.
I’ll see you there!
Regards,
Larry Benedict
Editor, Trading With Larry Benedict
Reading Trading With Larry Benedict will allow you to take a look into the mind of one of the market’s greatest traders. You’ll be able to recognize and take advantage of trends in the market in no time.
