Last month, the Federal Reserve met in D.C. to decide whether to poke the economy with a stick or sedate it with rate cuts — also known as adjusting interest rates. Lower rates juice growth. Higher rates calm inflation. Easy, right?
Except... not at all. What’s the problem, you ask?
You see, the Federal Reserve is stuck in a situation worthy of a Kafka novel — or at least a depressing West Wing episode. On one hand, growth is slowing thanks to White House policies like rising tariffs, which act like a tax on everything from cars to cornflakes. On the other, those same policies — plus stricter immigration rules — are shrinking the labor force, pushing up costs, and fanning inflation. So, the Fed is being asked to fight inflation and boost growth at the same time — with one blunt tool, like trying to do brain surgery with a spork.
Now, this dilemma isn’t new. Europe and Japan have been grappling with similar stagnation-inflation traps, though mostly because their populations are aging. In America, the crisis is less biological and more... ideological. It's not that we can’t grow — it’s that we’ve chosen policies that make it harder.
In the past, Fed chairs and presidents made grown-up deals — like Greenspan and Clinton in the ‘90s: You keep the budget tight, and I’ll keep rates low. We both look good. But today, that kind of cooperation is off the table — partly due to personal animosity, but mostly because America’s deficit is now so bloated it’s practically a Bond villain. Cutting it would mean gutting programs no politician wants to touch.
So, the Fed is left doing the monetary equivalent of trying to DJ a wedding where half the guests want a rave and the other half want a funeral.
Look, this is complicated stuff. And if you're holding out hope for some grand, tidy solution — a magical fix where everything gets better and no one has to sacrifice anything — I hate to break it to you, but that’s not how reality works.
Right now, all three branches of the federal government are doing precisely jack to actually fix the problem. Instead, they're too busy pouring gasoline on people’s biases, lighting matches made of culture wars, and then giggling like arsonist toddlers while running off to record campaign ads about how much they hate immigrants and “luv” you.
And who's left to deal with the flaming wreckage? The Federal Reserve — yes, the Federal Reserve, the government equivalent of your accountant’s accountant. It’s a quasi-governmental body, which is a fancy way of saying, “Technically involved, but everyone ignores them until the house is on fire.”
Imagine being handed a tiny little toolbox — the kind meant for fixing a squeaky wheel on a tricycle — and then being told, “Great! Now go rebuild the entire house… which, by the way, we just set on fire. You know, for the ambiance — the glow really brings the place together.”
And where did the arsonists go? They didn’t stick around to help — of course not. They strutted off to play golf. Not alone, mind you, but with lobbyists, donors, and literally anyone willing to tell them how brilliant they were for setting the fire in the first place.
“Oh wow, Sir, the way those flames really brought out the rugged lines of your deregulation agenda? Just stunning.”
It’s less like public service and more like a very bad performance art piece where the goal is to burn the house down, blame the fire department, and then run a campaign on how wet everything is.