The Fed Is Setting Up A Stagflationary Decade
Here is my takeaway from today’s Fed meeting: Good luck getting Headline and Core CPI back down to 2%.
The 10 year Treasury yield has eased too much.
The equity market is way ahead of itself.
The consumer will continue to pull back.
Prices will remain elevated.
The Fed has no choice but to cut rates in 2024 as there is far too much Treasury debt outstanding ($34 Trillion). The Fed is Treasury’s waterboy. The fiscal side needs to stop spending and the Fed needs to stop subsidizing that spending.
Here’s to -1% to 1% Real GDP for the next 3-5 years while prices continue to climb and our fiat currency - the Dollar - continues to lose purchasing power. I once wrote a book about this muted GDP, high price environment: HERE. The Fed is setting up a stagflationary decade.
