The Fed’s cutting rates tomorrow.
Not because it makes sense – because they’re panicking.
Look at August’s numbers: Inflation just spiked to 2.9% with a nasty 0.4% monthly jump.
Jobs cratered to +22,000, versus the expected 75,000. So we’ve got hotter prices AND weaker employment.
That’s not a “cut rates” setup. That’s a “holy shit, we’re trapped” setup.
The Panic Decision
Any rational central banker who looks at rising inflation will think twice about cutting. But Powell’s got Trump breathing down his neck, demanding sub-2% rates, markets expecting a cut, and those ugly job numbers screaming recession.
So they’re going to cut anyway even though inflation is moving in the wrong direction.
You know what happens when you cut rates in the face of rising inflation?
You pour gasoline on the fire. We could easily see CPI push from 2.9% to 3.5%+ within a year – exactly what happened in the early 1980s when the Fed panicked and eased too early.
Then they’ll have to slam on the brakes and reverse course. That credibility hit will destroy everything.
The Political Pressure Cooker
Trump’s not done. He’s already tried firing Fed governors and is threatening to “take the Fed over.” His 60% tariffs will spike import costs by another 0.5-1% on top of whatever rate cuts do to domestic inflation.
Meanwhile, you’ve got $7 trillion sitting in money market funds that have to go somewhere when rates drop. That money’s going to chase assets while inflation is accelerating. That’s not a soft landing – that’s building a bubble on top of a volcano.
The Nightmare Scenario
Fed cuts tomorrow. Inflation keeps climbing. They’re forced into aggressive tightening with unemployment already heading toward 5%.
That’s how you get stagflation – slow growth, high prices, and markets that crash by 20% or more, like in 2001 and 2008.
This isn’t 2019’s smart “insurance” cuts. This is panic policy at the worst possible moment: inflation rising, political pressure mounting, and way too much money looking for a home.
The Fed’s about to prove that sometimes the most dangerous thing you can do is give markets exactly what they want.
YOUR ACTION PLAN
I’ll be breaking down this disaster LIVE tomorrow at 1:15 PM ET with Bryan Bottarelli – one hour before Powell makes his announcement.
Here’s what we’ll cover:
- Why the August data trapped the Fed into this nightmare decision
- How Trump’s political pressure is forcing Powell’s hand
- The specific scenarios that could play out (and which ones terrify me most)
- How to protect your money when the Fed panics
This isn’t your typical FOMC preview. This is a front-row seat to watch the Fed make one of the most dangerous policy mistakes in decades.
Join us FREE inside the Monument Traders Alliance chatroom tomorrow at 1:15 P.M. ET.
Don’t watch this trainwreck alone. Be there when Powell proves that panic policy creates market disasters.