Folks, I’m sipping my coffee and reading about the Fed’s latest move, and let me tell you, it’s a real doozy. Inflation is a far more serious and persistent issue than the Fed has made it out to be, and it must be addressed by raising interest rates, a group of rate-setting committee members said Friday. I mean, who didn’t see this coming? The war in Iran has been destabilizing the global energy market, pushing up gas prices in America, and the Fed is just now realizing that maybe, just maybe, they should do something about it.
I’m reading that for months, the war in Iran has been causing all sorts of problems, and the Fed has no control over that, but that isn’t the only source of inflation pressures, the officials said. You’d think they’d have a better handle on this stuff, but I guess that’s why they’re economists and not, say, coffee connoisseurs like myself.
The Fed on Wednesday held interest rates steady for the fifth meeting in a row, which is just mind-boggling to me. I mean, come on, folks, the inflation rate is still well above the Fed’s 2% target, and they’re just sitting there, doing nothing. However, three officials – Fed presidents Beth Hammack of Cleveland, Neel Kashkari of Minneapolis, and Lorie Logan of Dallas – dissented in favor of raising rates by a quarter point. Finally, someone is speaking some sense!
Spiking energy costs are a real problem, and the Fed’s biggest tool to combat inflation, interest rates, can’t just magically fix everything. I mean, they can’t reopen the Strait of Hormuz and get oil flowing again, that’s just not how it works. But the inflation pressures may already be spreading into the demand-side of the economy, Hammack added, which is just great. Just what we need, more inflation.
Hammack wrote that “businesses describe pricing pressures as broadening rather than fading, and consumers are expressing despair over persistently higher prices.” Yeah, no kidding. I’m feeling the pinch myself, and I’m not even a business owner. Kashkari said he feared “high inflation could become entrenched” in the economy, and he said a rate increase was less risky than waiting too long and allowing inflation to get out of control again. Someone’s finally waking up and smelling the coffee!
While overall annual inflation fell to 3.7% in June from 4.1% in May, that’s still well above the Fed’s 2% target. I mean, what’s the point of even having a target if you’re not going to try to hit it? The Fed has traditionally held what’s known as the “dual mandate” of maintaining high employment and low inflation, but both Hammack and Kashkari wrote in their statements that the scale had tipped too far to one side — the inflation side.
Dissents under former Fed Chair Jerome Powell were rare, but they began to increase during the second Trump administration as uncertainty about the economy rose. Current Fed chairman Kevin Warsh has said that he wants to have a “family fight,” with people able to disagree — even loudly. Well, it looks like he’s getting his wish. Furthermore, Warsh has said that the Fed will no longer be issuing forward guidance on where it plans to set rates, making dissents possibly the clearest window into internal discussions of the board.
Fed officials have kept their benchmark lending rate unchanged at a range of 3.5%-3.75% for all five policy meetings in 2026 so far. I’m starting to think they’re just trying to see how long they can go without making a decision. The Fed has traditionally held what’s known as the “dual mandate” of maintaining high employment and low inflation, but both Hammack and Kashkari wrote in their statements that the scale had tipped too far to one side — the inflation side.
In conclusion, it seems like the Fed is finally starting to wake up and realize that inflation is a real problem. With officials like Hammack and Kashkari speaking out, maybe we’ll see some real action soon. Until then, I’ll just be over here, sipping my coffee and waiting for the Fed to get its act together. And who knows, maybe they’ll even raise interest rates to combat inflation – wouldn’t that be something? 🙄
Armchair patriot. Believes in the free market, cold beer, and that there’s always a guy named George behind every CNN segment.
Former remote-throwing champion turned #1 couch commentator on liberal panic in the media. Born in Texas (or so his mug says), he earned a degree in Fake Newsology & Beer Philosophy from YouTube University.
