The Fed is refusing to cut interest rates because President Trump’s proposed tariffs might trigger inflation.

Yes, this is the Fed’s thinking. They’ve even admitted that Fed staff are assuming “full retaliation” for whatever tariffs the Trump administration introduces.

What are these people smoking?

What country is going to try to retaliate against the U.S., thereby losing access to the largest pool of middle-class consumers in the world? The U.S. economy is as large as the 2nd, 3rd and 4th largest economies combined… and 75 of U.S. GDP is consumer spending.

That’s $21 TRILLION in consumer spending per year.

And yet, the Fed believes that the current trade war is only going to get worse, with other nations engaging in full retaliation to whatever the Trump administration proposes. And because of this, the Fed is worried that there might be an uptick in inflation.

Never mind that the gold standard for inflation expectations shows inflation is ~2% and trending down.

Never mind that real-time inflation measures like Truflation show inflation is actually BELOW 2%.

The Fed knows better! After all, they have 400 Economics PhDs on staff. And those people are all really smart!

This is a MAJOR screwup, and it’s only a matter of time before the Fed breaks something. When this happens, the Fed will be forced to panic ease monetary conditions triggering one of the greatest wealth building opportunities in years. 

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Best Regards

Graham Summers, MBA

Chief Market Strategist

Phoenix Capital Research