“It’s going to be cheaper to borrow money. This is very good for the markets.” – 00:51
Gabriela Berrospi, CEO & Founder of Latino Wall St, joins Remy Blaire to discuss the factors driving the anticipated rate cut in September and its potential impact on the economy.
Gabby explains that the goal of lowering interest rates is to stimulate economic growth by making borrowing cheaper, which is expected to encourage investment across various sectors. She notes that this sentiment is generally positive for financial markets, including real estate, cryptocurrency, and stocks. However, Gabby also warns that the rate cuts come with inflationary risks that should not be ignored. She emphasizes that while a 25 basis point cut is anticipated, it may take several cuts to truly feel the effects, raising questions about how much of the positive sentiment has already been priced into the markets.
As the discussion progresses, Remy highlights the recent performance of major U.S. stock averages and the rally in precious metals. Gabby points out that gold and silver are currently experiencing upward trends, even as the stock market shows gains. She notes that this unusual correlation—where both precious metals and stocks rise simultaneously—raises a red flag for her. Gabby attributes this trend to a growing lack of confidence in the U.S. dollar, particularly in light of the expected interest rate cuts. She explains that as inflation rises, the purchasing power of the dollar diminishes, prompting investors and central banks to turn to gold as a traditional inflation hedge.