Before the angry posts

Trump is expected to lash out if the Fed raises rates Wednesday. His own policies are the main reason a hike is on the table.

“he should look in the mirror”

Six months, full reversal

In March, with oil near $100 after the Iran war began, the average Fed official still penciled in a cut this year and another next year.

First hike since 2023

Now markets expect the Fed to raise rates, and futures price in at least three increases through March of next year.

Oil with no off-ramp

The Iran war has no end in sight and the Saudi East-West pipeline shut down temporarily. Fed officials have to assume oil stays expensive.

Diesel at six dollars

Diesel hitting $6 a gallon pushes costs into food and transportation, spreading the shock well beyond the pump.

Tariffs that keep coming

New levies on Canada answered Canada's retaliation, with more threatened. Small on their own, but they signal nothing here is a one-off.

“there is no guarantee of anything, especially tariffs, being one-off in the Trump presidency”

Kashkari changes his mind

The Minneapolis Fed president dissented, saying repeated supply shocks can entrench inflation the way they did in the 1970s.

“I increasingly believe that monetary policy does have an important role to play in addressing a series of successive supply shocks”

A chairman undermined early

By loudly demanding cuts and picking a chair he called sympathetic, Trump damaged Warsh's credibility on day one. Warsh cited not cutting as proof of independence.

September is the test

Credibility alone would not justify a hike, but in a close call the Fed has more to lose by standing pat after Warsh's hawkish Jackson Hole speech.

“Everything is pointing in the direction of September as a time to move if Warsh and his colleagues are going to maintain credibility”

Not judging, just measuring

The Fed never rules on whether a policy is good. It only reads the effect, and right now tariffs and Iran read as higher inflation ahead.