With tariffs rising and job growth collapsing, the Fed faces an impossible decision.
KEY TAKEAWAYS
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The Fed has a dual mandate: control inflation and maintain employment—both are in conflict right now
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Friday's jobs report showed major weakness—only 73k jobs added, with over 250k downward revisions
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Inflation, especially in durable goods, is starting to pick up again due to new tariffs
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The labor market no longer looks strong enough to justify the Fed’s "higher for longer" policy
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Fed Funds futures now show up to three cuts by year-end, with the first expected in September
MY HOT TAKES
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The Fed may have waited too long to act—and now it’s cornered
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Tariffs are stealth inflation machines, and they’re just getting started
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Labor market cracks are finally visible to everyone–not just economists
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Rate cuts are coming–but they’re arriving in an environment that still has inflation
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The Phillips Curve might be broken–but the Fed still acts like it isn’t
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You can quote me: “Powell probably spit his chamomile tea on the Washington Post when he saw that jobs number on CNBC.”