The Fed Is Losing Control

The Fed Is Losing Control. You Need to Act Before the Fallout Hits

Political pressure is rising, debt costs are exploding, and the dollar is breaking down. This is no longer theoretical.

Last month, the U.S. dollar fell to a three-year low.

The move caught many investors off guard. But the cause was no mystery.

President Trump called Fed Chair Jerome Powell “terrible” and suggested he might replace him with someone more loyal.

Markets got the message. If Powell resists, he’s out. If he caves, inflation risks coming back with force.

The dollar index dropped 10 percent year-to-date. Traders are betting the Fed will cut rates to ease pressure on $36 trillion in government debt, even if it sparks another inflation wave.

Anyone who still thinks the Fed is fully independent hasn’t been paying attention.

This Isn’t the First Time Political Pressure Broke the Fed

In the 1970s, politics infiltrated monetary policy and nearly destroyed the dollar. G. William Miller, appointed by President Carter, refused to raise rates even as inflation passed 10 percent. His inaction only made the crisis worse.

Inflation kept climbing. The dollar lost value. Confidence in the Fed evaporated.

It took Paul Volcker’s brutal rate hikes to stop the bleeding. That came at the cost of a deep recession and millions of lost jobs.