I guess I
I think I should clarify a bit. I am under the assumption that we see trade deals relatively soon and the effective tariff rate comes down from around 25% to 10-15%. If that doesn't happen then I agree we likely see a recession.I don't think it is fully baked yet, but investment is frozen, and job cuts will follow. We'll see.I don't believe we will have a recession. Slower growth this year yes.I have a dovish bias so I get why some may want them to cut rates now. A recession is coming, and it will put pressure on its employment mandate. Inflation from tariffs could be extreme but would be unlikely to feed into wages. I think a bigger concern though is how the long end of the curve/dollar would react to this.Which he should, especially under the current circumstances.I think Powell views Fed independence/credibility as more important than preventing a recession of choice in the short run.I think that's the point of Powell's comments after the meetingI guess I was asking could they take control of the narrative and demonstrate that we are ready to give you rate cuts if you do inflate the economy.They could but they won’t because we’re about to see a large inflation spike on purpose.Stupid question, why can't the Fed make a token rate cut like 5 basis points to signal that it's willing to act if needed but needs more data before making a larger cut?
I get it. That said, there's a reason why they give you a taste of the wine in one of those itty-bitty cups at the grocery store.