Fed Hike Changes Nothing: ‘Most Important Asset On Earth’ Hits Breaking Point? | Dave Weisberger

Dave Weisberger (0:00)

I think the question is, can the Fed allow themselves to stay where they were? And he clearly felt that they couldn't. He said that the most important asset on Earth is the US 10-year bond. I don't know that he really wanted to use those words, even though I know for a fact that he believes that the US 10-year bond is a huge asset. But he said that the US 10-year bond is a huge asset.

He said that the most important asset on Earth is the US 10-year bond. I don't know that he really wanted to use those words, even though I know for a fact that he believes it, but that's the issue.

David Lin (0:32)

In a well-telegraphed move, the Federal Reserve raised the Fed Fund's rate by 25 basis points today on Wednesday, September 16th. Why did markets react the way they did? Why are stocks down in the day? And why did the 10-year yield climb back up above 5% following Fed Chair Kevin Warsh's press conference? Why is gold down and Bitcoin up We'll? be answering all this and much more in What's Next for Markets and Monetary Policy with the next guest, Wall Street veteran of more than 40 years, Dave Weisberger, also the co-founder of CoinRoutes, also the author of his new book, upcoming book, Million Dollar Frat Boys, How Wall Street's Tech Geeks Took Over and Changed the Game.

This is a very interesting read. We'll be talking about that. We'll also be talking about why the Clarity Act failed to pass yesterday and the broader impacts on the crypto markets. Right now, it's not looking great for sentiment. On Kalshi, the biggest prediction market in the United States, there's only a 46% chance that Bitcoin will cross $85,000 again by November 13, 2026 If you agree with those odds, then a $50 trade can yield a payoff of $106 if you're correct. We'll be getting Dave's outlook on crypto and Bitcoin and what's next for crypto legislation. This video is brought to you by and sponsored by Kalshi. It is the largest prediction market in the United States. And unlike a sportsbook, you're trading peer-to-peer on real world events, from economic data to political outcomes, and the price moves based on public opinion, not a house. Go to the link down below or scan the QR code here and use my code LIN when you sign up. And when you do use my QR code or my link down below, you'll get $25 in in-app credits when you trade $25.

Kalshi is CFTC approved and available in all 50 states, including California and Texas. Dave, welcome back to the show. Good to see you.

Dave Weisberger (2:22)

Nice to see you too, David.

David Lin (2:23)

How Wall Street's tech geese took over and changed the game is the subtitle of the Million Dollar Frat Boys. You've had senior positions at banks, working alongside the technology desk, so you're well positioned to talk about exactly how Wall Street's tech geese took over. Let's start by talking about what happened today. As I tweeted at 2 o'clock exactly Eastern time, the Fed raised the Fed funds rate at the time markets were up, the stock markets were up, and now it looks like the S&P just took a nosedive. Nasdaq fell off a cliff after 2 p.m., after 2.30's press conference. Gold was up, now it's down 1 percent. Bitcoin was up, now it's down 1 percent.

Yields were down, now it's up, and now it came back down. This is interesting. Anyway, market reaction to what happened today.

We know that the Fed was reluctant to raise rates, otherwise they would have done it already. And we know that perhaps Fed share Warsh was pressured by Trump not to. They did it anyway. Why now?

Dave Weisberger (3:25)

Well, the bond market, long bond going over 5 percent is why. I mean, Chair Warsh in his press conference, he said a lot of stuff. It was relatively hawkish, very typical for a Fed chair to try to jawbone down inflation. But he slipped in one case where he effectively admitted, he said the most important asset on earth is the US 10-year bond.

Now, I don't know that he really wanted to use those words, even though I know for a fact that he believes it.

But that's the issue. So the bond market was already saying, listen, something needs to happen. The bond market, when the curve steepened that much, the question is, can the Fed allow themselves to stay where they were? And he clearly felt that they couldn't. It was a unanimous decision whether or not he and some of the more dovish members of the Fed were allowed to go along with it. I think what probably happened is in the first vote, they probably said no. They realized it was going to be that way.