The Stagflation Economy

Summary

• The Fed's June meeting revealed a continued lack of commitment to its 2% inflation target, despite persistent inflation overshoots the Fed plans for more rate cuts.
• Current policy risks stagflation, as the Fed prioritizes low unemployment over controlling inflation, while ignoring looming threats from tariffs, oil prices, and fiscal deficits.
• Soft-landing strategies have historically failed to restore inflation to pre-tightening lows, and the Fed appears poised to repeat past mistakes.
• True credibility and lower rates require decisive inflation control, not premature rate cuts; current Fed actions risk higher borrowing costs and persistent inflation, further exacerbating fiscal financing pains.

Baris-Ozer

Fed Makes Few Changes And Reveals Huge Risks

The Fed policy meeting (Federal Reserve) in June was considered uneventful, as no action was expected, and no action was taken. The markets did not react. The Fed did issue its new SEPS (Summary of Economic Projections- these

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.