The Federal Reserve just did something it has only done twice in the last 60 years. Both times the economy flipped into a recession, the stock market crashed, and investors who were prepared found some of the best opportunities of their lives.
The move is a U-turn, in three steps:
- The Fed raises interest rates to fight inflation.
- It declares inflation beaten and cuts rates to stimulate the economy.
- It realizes inflation is still a problem and raises rates again.
That three-step cycle is happening right now. Briefs Finance CEO Jaspreet Singh's answer to "what comes next" isn't a prediction, because history doesn't repeat, but it does rhyme, and the last two cycles show which assets did well.
Nothing here guarantees anything. Investing has risks, you will lose money at some point, and the job is to do your own research instead of trusting a stranger's forecast.
That research gets easier with AI, as long as you know how to use it. Asking ChatGPT or Claude for investment advice and blindly following it is how bad outputs become bad investments.
Jaspreet is showing how he and his analysts actually use those tools to research stocks in a free livestream on November 17, prompts included.
The Fed Flip That Preceded Two Recessions
| Late 1960s | Early 1980s | |
|---|---|---|
| Step 1: raise | 1966 | Early 1980, with rates near 20% |
| Step 2: cut | 1967, to stimulate | Mid-1980, after declaring inflation solved |
| Step 3: raise again | 1968 to 1969 | Late 1980, after inflation stayed high |
| Recession | 1973 to 1975 | 1980, then again 1981 to 1982 |
| Stock market | Fell about 48% | Fell about 27% |
| Unemployment | Around 9% | Around 10.8% |
In the late 1960s the Fed added a fourth step, cutting again in the early 1970s to stimulate, which created an even bigger inflation problem. The recession and the stock market slide followed.
The early 1980s version got the nickname stop and go. Inflation picked back up in the late 1970s, the Fed got aggressive, backed off too soon, and had to slam the brakes again, and the economy paid for it twice.
Is a Recession Coming? The Same Three Steps Are Happening Now
During the pandemic the Fed cut rates to stimulate the economy, which created an inflation problem. In 2022 it started raising rates aggressively and kept raising through 2024.
In 2024 it declared the war on inflation won and started cutting, continuing into 2025. Then President Trump entered the White House, tariffs arrived, inflation concerns returned, oil prices rose, and in 2026 the Fed raised rates again.
Now the Fed says more interest rate hikes could come in 2026 and potentially 2027, and this time could absolutely be different. But the historical data is what investors have to work with.
Panicking and getting emotional is the news' job. The investor's job is to find the opportunity.
Why a Credibility Problem Makes a Recession More Likely
The reason the U-turn hurt both times comes down to trust. When the Fed fights inflation the whole world watches, and when it says the war is won and starts cutting, investors around the globe put their money back into the dollar.
Then inflation comes back, and that credibility is gone. If the dollar loses credibility, people don't want to save in it or lend to the United States, which is extremely painful.
So the Fed ends up fighting on two fronts, inflation and its own reputation, and that forces more aggressive rate hikes. Higher rates make everything more expensive: buying a house, financing a car, running a business, borrowing to invest, and the national debt.
All of those higher costs drag on the economy, which can push it into a recession and hurt the stock market.
The $40 Trillion Difference Between 1980 and Today
| 1980 | Today | |
|---|---|---|
| National debt | About $900 billion | Over $40 trillion |
| Debt to GDP | About 30% | 125% |
| Deficit | Spending about 2.6% more than it collected | Spending about $1.06 for every $1 collected |
Debt to GDP compares the national debt to the size of the economy, the way a lender compares a loan to its collateral. In 1980 the economy was far bigger than the debt, so the Fed could raise rates aggressively and the government could handle the higher cost.
Today the debt is bigger than the whole economy. Raising rates makes it more expensive at a time when it's already a huge burden.
It got bad enough that earlier in 2026, Treasury Secretary Scott Bessent said the United States was struggling to find lenders, because it keeps spending money it doesn't have. Fewer lenders means higher rates, so the bond market was pushing interest rates up and up.
The fix was clever and unsettling at the same time. The government decided to buy up its own debt, essentially printing money to keep rates lower and the bond market steady.
Higher rates hit the government harder today than at any point in the last two cycles. That's the backdrop for every asset below.
The Assets That Won the Last Time a Recession Came With Inflation
The 1970s are the closest comparison, so here's how four assets did across that decade.
| Asset | 1970s result | Why |
|---|---|---|
| Gold | Rose about 24x | Investors feared the dollar would collapse and fled to a safe asset |
| Real estate | Rose about 157% | Treated as an inflation hedge, and it produces income |
| Stocks | Did poorly | Recessions, inflation fears, and higher rates weighed on them |
| Cash | Lost about half its value | Inflation ate it |
Gold was the clear winner, and then it stopped winning, because gold rises when investors fear the dollar, fear inflation, or think something bad is coming. When those fears faded, investors took the money back into stocks and real estate, and gold fell for the next couple of decades.
Real estate had an edge gold didn't. You can live in it or rent it out, and investors who locked in a 30-year fixed mortgage got to pay back their loan with inflated dollars.
Buy a house in 2001 for $125,000 with a mortgage of a few hundred dollars a month and never refinance. Today the house is worth multiples of that while the payment hasn't moved, and that's inflation working for you.
Stocks did poorly in the 1970s and then outpaced every other asset over the next two decades. Not every asset wins every decade, and every asset is cyclical.
Cash sitting idle lost about half its buying power. If inflation and economic worries keep going, these are the patterns investors saw last time.
Deciding which of those patterns applies now is research, and Jaspreet leans on ChatGPT and Claude for a lot of it. His free livestream on November 17 shows exactly how, down to the ten prompts his analysts use to find opportunities.
5 Assets to Consider If a Recession Is Coming
Jaspreet can't tell anyone what to invest in, and none of this is a recommendation. These are five ways to start thinking like an investor instead of panicking like the news.
1. Dry Powder
Always have money set aside for a downturn, because downturns are part of the economy. In the last 100 years the stock market has had 25 crashes of 20% or more, and each one was a buying opportunity for investors who had cash and didn't panic.
That doesn't mean waiting to invest. It means using good times to prepare for bad ones, and the advantage today is that waiting money can earn interest:
- A high-yield savings account from a reputable, FDIC-insured bank, with some now paying close to 4%.
- Treasuries, for higher earners in high-tax states, since FDIC coverage stops at $250,000 and state and local taxes can eat a chunk of savings interest. Treasuries pay around 3.5% to 4% with no state or local tax.
- An ETF like SGOV, which holds treasuries so the principal doesn't fluctuate and the interest, around 3.5%, generally avoids state and local taxes. It isn't FDIC insured, but it's backed by the US government, and if that fails there are bigger problems.
2. Gold
Jaspreet talks about gold with caution. He started buying a little gold every month before the pandemic, dollar-cost averaging into roughly 2% of his portfolio, and he doesn't recommend what he does to anyone else.
Gold is a bar that sits in a vault, and it doesn't produce anything the way a company or a rental property does, so he treats it as hard money. Bury $10,000 in cash and $10,000 in gold for ten years, and the gold should have more buying power when you dig it up.
The caution is about the crowd, because after the pandemic a lot of investors bought gold to get rich. Gold rises on dollar fears and inflation fears that are never permanent, and gold prices came down quite a bit in 2026.
Over the long term gold goes up like most assets. It just runs on its own cycle, and there are paper ways to hold it, like the ETF GLD, alongside physical gold.
3. Real Estate
Real estate provides actual value. You can live in it, rent it to a tenant or a company, and everyone needs a roof over their head.
It's also an inflation hedge with a twist. Buy with a 30-year fixed mortgage, don't max out the debt, and inflation shrinks the real cost of that payment every year.
Investors can buy rental properties directly or hold paper real estate through a real estate ETF. Two examples are Vanguard's broad real estate ETF and Schwab's SCHH, and both pay dividends, which means cash flow.
4. Dividends
Jaspreet is a cash flow investor. A dividend company is profitable enough to pay part of its profit to shareholders, usually every three months, as cash deposited in your account.
These are value investments, less exciting than Nvidia, AMD, or SpaceX, and closer to Johnson & Johnson or AT&T. The appeal is a dividend that grows year over year into a new stream of income.
They also tend to hold up better in downturns. When investors get nervous they move from fast-growth, high-risk companies into stable, high-profit ones, so dividend and value companies generally fall less.
Two ETF examples:
- SCHD, from Schwab, which holds high-dividend companies that have paid and raised their dividends year after year. Jaspreet discloses that he personally owns it.
- NOBL, which holds the S&P 500 Dividend Aristocrats: companies in the S&P 500 that have raised their dividend every year for the last 25 years. The yields aren't huge, but the list is the best of the best.
5. The Broad Market
The simplest option is owning the broad economy through the S&P 500. VOO is one way to do that, and Jaspreet discloses he personally owns it, with a second S&P 500 ETF as another example.
The S&P 500 falls in every crash, and it has also grown around 10% a year on average for the last 100 or so years. That's the case for always be buying: buy every week no matter what the market or the White House is doing.
Gold won the 1970s, and stocks won the two decades after. Nobody knows which asset wins the next cycle, so the preparation has to happen now, in the good times, before the Fed's U-turn flips the economy.
