In today’s briefing:
- US: Politics Is Clouding the Ability to Make Rational Monetary Policy
US: Politics Is Clouding the Ability to Make Rational Monetary Policy
- The FOMC claimed at its last meeting that ‘inflation remains elevated’, although core PCE and core CPI inflation were BOTH at 4-year lows in Apr’25, despite the Trump tariffs.
- FOMC minutes show members expressing fears about the prospect of both high inflation and high unemployment, NEITHER of which has yet actually transpired. Politics is clouding the Fed’s policymaking ability.
- Apr’25 was the first month with the tariffs, yet inflation FELL. M2 growth is just 4.25%YoY (Apr’25), so inflation is likely to stay tame. A Jun’25 rate cut is due.
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