Inflation is running hot and the market expects the Fed to act.
December 2026 Outlook
Shifting Perceptions
- A couple months ago, the projections were for rate cuts.
- On May 8 ago the forecast was for the Fed to hold steady through March 2027.
- Now, hikes are priced in at a slow pace.
Looking ahead to March 2027, the expectation is 4.02 percent up from 3.69 percent on May 8.
The change is slow but significant. We went from cuts, to no change, to one hike in the last 2-3 months.
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And There’s a 99 Percent Chance of at Least One Trump Stupid Action Over The Next 24 Hours.
Trump has no care or concern of how much suffering the average American is undergoing so expect a repeat of the 70s/80s inflation cycle.
His enablers in Congress will be held to account during the midterms and they deserve to get what’s coming to them.
There’s a 100% chance of…
Do worry, Trump & Walrus will find a way to make things even worse.™
The FED’s Ph.Ds. don’t know a debit from a credit. They don’t know where money comes from. In double-entry bookkeeping on a national scale loans/investments equal deposits. The FED can’t prove this. You first have to know how to define money. And the FED can’t do it. The FED’s never been able to do it. It’s just as Dr. William Barnett said (Divisia Monetary Aggregates) that the Fed should establish a “Bureau of Financial Statistics”. Yeah, the FED needs audited.
They should raise it to 99% to more accurately portray the actual values and risks involved.
I can hear it now. “I luv interest rate hikes.” MAGA, bowed down on their Home Depot prayer rugs, “It’s 4 dimensional chess. It’s what he wanted all along.”
With Taco taking over the fed, I am not convinced this political group will do the right thing.
The composition of the money supply has changed. It’s just as the late Dr. Dan Thornton said, the FED now can’t control M1. I.e., Powell destroyed deposit classifications. The flight to liquidity has turned money meant for savings into money meant for spending. N-gDp is too high. The FED is too easy.
Here’s a scenario: crushing intertest-rate boosting inflationary expectations cannot be contained. There is yet one more kick of the can, thusly: the Fed lowers rates and borrows aggressively short-term. It is a way of monetizing the national debt (for now) to defray the reckoning until at least after the midterms Meanwhile, it juices the economy out of a few last drops. The propaganda campaign is turned up to 11.
That is, before the liftoff of the asset-rich class and its stark social divide from the servant class gapping out. The career path open to young men is, get in uniform. Watch the bread and circus (car races, fights, sports, gambling), and brutalize losers as ordered.
I saw a bunch of (what would once be called) ordinary folks arriving in my (tourist) town, in quasi-military gear today, the lead person with a US flag aloft: pretend militarism as street theater. They are primed to the gills for this.
A new story is being written, where “inflation is a sign of a vigorous and growing economy, like no other..”
Checking my Fed thesaurus for “persistent”, “insidious”,”sticky”,”unpleasant”, “intransigent”, “stubborn” along with “constant”, “ubiquitous”, “permanent”, “unmoving”..
There it is…”transitory”.
Whew! Thought maybe someone redacted it for the new Fed chair.
No single word has been more wrong.
For 2026, the Midterm Election will be held on Tuesday, November 3. So Trump will probably get any rate hike stalled until after that date as he has hurt the Republicans enough already without adding rate hikes to the mix of things blamed on the Donald that constantly piss voters off.
After a Year of High Tariffs, the US Goods Trade Deficit Has Barely Budged
https://www.cato.org/blog/after-year-high-tariffs-us-goods-trade-deficit-has-barely-budged
Inflation and tariffs are a regressive tax hike. Raising reasonable revenues is politically impossible in the USA.
Somebody is not gonna like that at all.
Bond vigilantes will have more of an impact than ANTIFA on Trump’s fiscal policies. The Fed keeps missing the major turns in the bond market. The Fed couldn’t pour water out of a pitcher if the instructions were written on the bottom.
Perhaps it depends on if Warsh is in the Epstein Files?
We know that Elon Musk is in that shit sandwich of control, protection and being a financial beneficiary as long as they all toe the line…
I am sure that the Epstein Files are just the blackmail material that we know about.
For is it not written, that for every cockroach we see, there are a hundred more we never see?
Warsh is on a 2010 Christmas party guest list at Epstein Island
His father-in-law, Lauder, is mentioned in the files over 900 times (as late as 2017), and Epstein set up an LLC for Lauder and Leon Black to buy art jointly
I listened to Jeff Snider’s Free Podcast last night, “Eurodollar University.” He is beginning to insist on Charging. Nevertheless, he clearly says that NOTHING that Central banks doing, by fiddling with Interest Rates, will work. He is right of course. It is all smoke and mirrors.
We are at perhaps an inflection point in a multi-decade journey of smoke and mirrors. But wasn’t dollar hegemony that, even in the post-WW2 “golden age”? We could dream up and print unlimited dollars to buy real things from abroad. Once the US dollar was depleted by inflation, those assets (promises reduced to paper) were reduced in value in foreigners;’ hands. The dollar and interest rates regained credibility in 1982, but then did another multi-decade chapter of sliding into weirdness. Will the rock and hard place dilemmas finally arrive?
This should be really interesting to watch. If there’s a fed rate hike under the administration of Warsh will Trump declare Warsh incommunicado?
He only nominates people who will be his bitch. Interesting to see where his loyalties lie and how he survives that decision.
Warsh will fold.
Warsh undoubtedly will, he’s a handpicked puppet, after all, but he only has one vote on the FRB Board.
Anybody accepting a position of such public prominence and impact in the Trump era is, I think, mispricing the risks they are taking. His pressure campaigns will not become milder at this point.