The financial media is all perplexed to read today’s Federal Reserve Open Market Committee statement as their appears to be a whiff of stagflation in it.
So if there is some actual inflation accompanying a further economic slowdown, that would be called “stagflation” last I checked my economic textbooks.
Almost exactly one year ago in these pages, I warned in the article Powell and the Fed Choose Stagflation:
With the FOMC’s statement today, it’s obvious that the Federal Reserve is not serious about fighting inflation nor about the lower echelons in society despite his statement about fighting the inflation the Fed helped create yet has no solution to containing it thus far.
Instead of recognizing the real inflation rates and problems that were impacting the lower and middle class, for the purposes of trying to help re-elect President Biden, the BLS hedonically nudged the CPI and price reporting which wow, shockingly, the PCE was modified also to encourage a lower reported inflation rate. All that to try to re-elect a man who poops his pants and didn’t know what day of the week it was without a teleprompter and a buttload of Adderall.
Fast forward to the now.
The real impacts of stagflation on top of a new Presidency, thankfully not the drunk chick, and a massive trade war creating economic conflict around the world has started to accelerate the stagflationary scenario to its ultimate conclusion. Most people on the talking head channels are screaming that tariffs are inflationary and as I’ve been preaching on the X Spaces MacroEdge podcast, it is, for about a quarter maybe a tad more.
However, after the tariffs filter though the supply chain in Q2-Q3 of this year, the real nightmare begins.
Today’s FOMC statement is just another indication that the educated economic elites have zero clue about what is about to hit the American economy.
