Ready to get really furious?
There is ample evidence that the current Fed, led by Fed Chair Jerome Powell, is highly political, making policy decisions based on political preferences rather than economic data, or what’s best for Americans’ pocketbooks.
Case in point, the Powell Fed has happy to cut rates by 0.5% last August, within 60 days of the 2024 Presidential election at a time when the economic future was extremely uncertain depending on which candidate won the election. However, once President Trump won, the Powell Fed stopped cutting rates and has been on hold for seven months even though inflation is lower and unemployment is higher today than it was in August 2024!
Their reason for not cutting rates once President Trump won? Because the Trump administration’s trade war/ tariffs could result in economic uncertainty. And yes, Jerome Powell wants you to believe that tariffs, which most nations already have in place, create more economic uncertainty than a Presidential election with two diametrically opposed candidates and economic agendas.
This is not only insulting, but it’s going to cost the U.S. hundreds of billions of dollars. As I noted in yesterday’s article, the U.S. needs to roll over $9 trillion in debt in the next 12 months. By keeping rates at 4.5%, the Fed in ensuring that interest payments on ALL that new debt will be much higher!
How much higher?
President Trump claims it could be as much as $900 BILLION.
This alone is reason enough for Jerome Powell to resign as Fed chair. He was completely silent for four years as the Biden administration added nearly $10 trillion to the national debt. And yet, once President Trump took office, suddenly the Powell Fed is worried about the deficit as well as other fiscal issues (tariffs/ the trade war).
The U.S. is not the only one impacted by the Fed’s political rate games. Remember, every interest payment in our financial system (student loans, mortgages, auto loans, credit card payments, etc.) are based on the Fed Funds rate. By keeping rates higher, the Fed is forcing Americans to pay more on their debts.
This is the thing of which debt crises are made of. As I’ve noted previously, interest on the U.S. national debt has already exceeded $1 trillion per year. It is now the second largest government outlay behind social security. Where does it go once the U.S. is forced to roll over that $9 trillion in debt at higher interest rates? $1.5 trillion? $2 trillion? Higher?
You get the idea. The Fed is playing with matches next to a debt bomb. And the ones who will be affected by it when it goes off are the 330 million Americans’ stock portfolios.
If you find yourself worried about another crash, or bear market hitting, we have a proprietary signal that you can use to insure you get out of the markets well before a collapse hits.
This signal has accurately predicted every major market collapse in the last 40 years. And we detail it, how it works and what it’s saying about the markets today in a Special Investment Report How to Predict a Crash.
Normally we’d sell this report for $499, but in light of what’s happening with the Fed today, we’re making just 99 copies available to the investing public.
To pick one up…
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research
