Our head of investing research sat in on a meeting this week led by Fed Governor Barr, one of the 12 voting members at the Federal Reserve. He came back with three takeaways:
- Higher interest rates are probably coming in 2026.
- Lower inflation may not arrive as soon as many expect.
- The newest driver of inflation is artificial intelligence.
That third one is the strange part. Until now, the Fed's line was that AI would make things cheaper and help kill inflation - now one of its own voting members says it's doing the opposite.
The timing makes it stranger. The same week, President Trump sat down with the biggest names in AI and told them to police themselves rather than wait for Washington to write the rules.
Why does a Fed meeting matter to your portfolio? The Fed is the central bank of the United States, and its decisions shape where stocks move, what your dollar buys, and where inflation goes next.
The Fed Changed Its Story on AI and Prices
Those 12 votes matter because the Fed can't raise rates, cut them, or print money without a majority behind the decision.
Barr said the "surge of investment and related demand from artificial intelligence is now having a measurable impact on prices." The technology that was supposed to boost productivity and drive prices down is doing the opposite.
In his words, the Fed has been "knocked off course" on getting inflation back to 2%. That 2% is the Fed's inflation target, the yearly pace of price increases it aims for.
Inflation has run hotter than that in 2026 for a few reasons, and AI is the newest name on the list:
- The Iran war
- Higher oil prices
- Money printing
- The AI buildout
The real problem isn't that prices are rising. It's that they're rising faster than incomes, so paychecks and savings accounts aren't keeping up and the average investor gets a little poorer every day.
That gap between prices and paychecks is the problem Jaspreet Singh's free Always Be Buying e-book is built around: owning more of the market instead of waiting for inflation to cooperate.
Inflation Never Got Back to 2%, So Fed Interest Rates Keep Climbing
When inflation took off after the pandemic in 2020, 2021, and into 2022, the Fed first called it "transitory" - temporary, in Fed-speak. It wasn't.
The Fed then raised rates aggressively, and inflation still never made it back to 2%. In 2026 the target is still unmet - and now inflation is climbing again.
Now the Fed is hinting that the path it's on may not get inflation back to 2% anytime soon. Its next meeting is October 28, and another rate hike is expected.
Even with those hikes, the message is that AI could keep inflation higher for longer.
The White House Is Betting on More AI, Not Less
The Fed and the White House are pulling in opposite directions, and they're allowed to. The Fed isn't part of the federal government, as its own website points out, so it sets policy separately from whoever is in the White House.
The same week as the Barr meeting, President Trump met with Nvidia CEO Jensen Huang, Mark Zuckerberg, Jeff Bezos, and the CEOs of Google and Microsoft. His message to them: "there is a belief that there should be tremendous self-regulation."
In English: the companies building the most powerful technology on earth would police themselves. The tool is what he called a "morally binding accord" - a document the companies sign promising to protect their users, with each one "morally responsible" for its own behavior.
It isn't legally binding. Supporters like that because it lets AI companies keep growing fast, while critics worry it lets them chase profit in ways that hurt users.
It Comes Down to China
Listen to how the President and the Treasury Secretary talk about AI, and one idea keeps coming up: whichever country leads in AI becomes the world's superpower.
The U.S. is the economic superpower today because it won the internet age - Amazon, Meta, and Apple were built here - and AI is the next industrial revolution. Whoever controls it gets the next wave of giant companies, and the crown that comes with them.
The Treasury Secretary has put it bluntly: lose the AI race to China, and not even the military can protect the country. So the White House won't slow AI investment down, because slower companies mean a U.S. that falls behind.
The People Building AI Are Asking to Slow Down
The CEOs behind Claude and OpenAI's ChatGPT, along with Elon Musk, have all said the same thing: AI may be getting too smart, too fast.
Their concern is that AI can build other AI agents, and unregulated agents could do real harm. President Trump dismissed the warning as a hoax.
In his view, only China wants the U.S. to slow down on AI. He has also floated renaming the technology "superintelligence" and wants to appoint someone to oversee the AI race.
Three groups are now pulling three ways: the Fed wants to cool the economy, the White House wants to speed up AI, and the builders want it regulated before it does damage.
What Higher Fed Interest Rates Do to Your Portfolio
All of it comes down to two levers: interest rates and money printing.
"Economic policy" sounds vague because it is, but in practice it means the Fed sets where interest rates go and influences how much money gets printed. Both land directly on your portfolio.
Higher Fed interest rates put downward pressure on asset prices. That doesn't mean stocks go down - it means there's a weight on them.
Take a $500,000 house. Are you more likely to buy it with a 3% mortgage or an 8% mortgage?
At 3%, buyers overbid and push home prices up. At 8%, fewer people overbid and you start to see price cuts - not guaranteed, but that's the pressure.
Higher rates also land in two other places:
- The government. They make the $40 trillion national debt more expensive to carry, because Washington pays more interest on it.
- The economy. Houses, cars, credit cards, and business loans all cost more to finance, so people borrow less and spend less. Fewer home and car sales means less money for realtors, car salespeople, bankers, title insurance companies, and insurers.
Higher rates aren't bad for everyone, though. Investors holding cash, sitting on treasuries, or parked in a high-yield savings account earn more interest.
| Higher Fed interest rates hurt | Higher Fed interest rates help |
|---|---|
| Home and car buyers, who pay more to borrow | Investors holding cash |
| Realtors, car salespeople, bankers, title and insurance companies | Investors sitting on treasuries |
| The government, carrying $40 trillion in debt | Savers in high-yield savings accounts |
| Asset prices, which face downward pressure (not a guarantee) |
So are higher interest rates good or bad? It depends - there are always winners and losers, and there's always a way to win if you understand how.
How Investors Win When Fed Interest Rates Rise: Always Be Buying
Jaspreet is upfront that none of this is a recommendation. But the way wealth gets built in this economy isn't a job - doctor, CEO, celebrity, engineer, teacher, it doesn't matter - it's owning investments.
He calls it ABB: Always Be Buying. Buy when markets are up, down, or sideways, when it's raining or sunny, and whether there's a Democrat or a Republican in the White House.
In practice, that means setting up a system that buys every week, every two weeks, or every month - what investors call dollar cost averaging. Something broad like the S&P 500 is a great place to start.
ABB is the foundation - it's how wealth gets built, and it's the system Jaspreet walks through in his free Always Be Buying e-book.
For a lot of investors, though, the foundation alone might not be enough. The cost of living keeps rising, and market returns on their own might not keep up with it.
Two Ways to Accelerate Wealth When Rates Are Rising
Treat a Market Crash Like a Sale
When markets fall, most investors run away and sell in a panic. That's exactly when you want to be buying more aggressively, because a crash is the stock market on sale.
| Year | What fell | How far |
|---|---|---|
| 2000 | Internet stocks, as the dot-com bubble burst | 78% |
| 2008 | The stock market | 50% |
| 2020 | The stock market | 35% |
| 2022 | The stock market | 20% |
Buy the market at a 35% discount and you grow your wealth that much faster. These chances don't come every day, week, month, or even every year, so having cash ready for when they do is a great way to accelerate your wealth.
Jaspreet has a blunt acronym for the pattern: POOP. Panic leads to Overselling, Overselling leads to Opportunity, and Opportunity leads to Profit.
Follow the Money Before the Headlines Do
The second accelerator is what he calls market shifts: studying where money is moving and investing there, instead of where it was. If money is flowing into a new industry before it hits the headlines, that's an opportunity.
The mistake most investors make is buying whatever is trending on CNBC, Reddit, or ChatGPT. By the time it's on the news, a lot of the real money has already been made, and getting a step ahead of it takes real research.
The Fed meets again on October 28. Whatever it decides, the play is the one Jaspreet laid out: don't panic, don't invest off the news, and go one layer deeper to find where the opportunity is.
