The Fed has acknowledged that its policy remains restrictive and that the impact of tariffs will likely be a one-time bump in prices.

Overall, the U.S. economy appears to be in solid shape heading into the new tariff environment. We’re near full employment, and inflation has come down meaningfully over the past two years, now hovering around 2.5%.

Goolsbee remains optimistic, suggesting the economy will stabilize and rates will likely come down next year.

Still, I can’t help but wonder if the Fed is navigating by looking in the rearview mirror. At this point, it feels like the cure may be doing more harm than the disease.

J.P. Morgan “The probability of a recession remains at 60% up from 40%”.

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