Interest Rate Cuts Delayed — Fed Blames Tariff Inflation

"So, on July 30th, the Federal Reserve will decide whether to cut interest rates or not. So, according to the Federal Reserve's most recent projection, and they did this back in June, they predicted that they're going to cut interest rates two more times this year in 2025."

"So, what's going to happen? And of course, this is so important because if the Federal Reserve starts cutting interest rates, then that's going to be inflationary. And this is also going to help the stock markets, Bitcoin, and precious metals."

"So the report says that the US labor market added a net 147,000 jobs, beating the expectation of 118,000 and the unemployment rate decreased from 4.2% to 4.1%."

"And because the jobs report says that the labor market is doing so well, well, if you think about it, then that's less pressure for the Federal Reserve to cut interest rates to save the labor markets because the labor market doesn't need any saving, you know, according to the report. Okay? So, when you look at the labor market, it supports the arguments for the Federal Reserve to not cut interest rates."

"So and what we're waiting for to reduce rates is is to understand what will happen with with really the tariff inflation and uh there's a lot of uncertainty about that. Every forecaster you can name who you know who is a professional you know forecaster with with adequate resources and forecasts for a living is forecasting you know pretty sign everyone that I know is forecasting a meaningful increase in inflation in coming months from tariffs because someone has to pay for the tariffs."

"So the most recent CPI inflation reports, we're seeing tariffs accelerating the rate of inflation, particularly no surprise, in goods inflation."

"So CPI headline inflation has shot up from 2.4% in May to 2.7% in June, which is of course a very big jump."

"So therefore, tariffs are expected to further accelerate the rate of inflation over the next few months."

"So I I do think that I think that's right. where in effect we went on hold when we when we saw the size of the tariffs and we're and essentially all all inflation forecasts for the United States went up materially as a consequence of the tariffs."

"So that's why according to the CME Fed watch tool, there's a 95.3% chance that the Federal Reserve does not cut interest rates at their next meeting on July 30th."

"I believe that there's a very high chance that the Federal Reserve does not cut interest rates in July."

"And the next meeting after July is going to take place on September 17th, and there's a 39.3% chance that the Federal Reserve will not cut interest rates by that meeting."

"And what they're waiting for are the developments with the tariffs. That's pretty much the biggest one. and they're saying that the effect of tariffs on inflation and or President Trump's policy on tariffs is is going to take months to settle."

"J. Powell's term is going to end in May of 2026 and Trump's going to appoint a new Fed chair that's going to cut interest rates aggressively."

"And if Powell delays rate cuts even longer, then the new Fed chair is going to cut even more aggressively to make up for it."

"And of course, when that happens with lower interest rates, that's going to be explosive for stocks, for Bitcoin, for precious metals."

"They're going to switch to quantitative easing and you know in layman's term that's that's just money printing if Paul doesn't get that started himself."

"July do not expect any interest rate cuts. Like it's just not going to happen."

"So, everybody's going to be listening to what Paul says. They're going to be trying to interpret his answers and then that's going to change the odds for a September rate cuts."

"And the second thing is by I would say mid August by then we're going to have a better understanding of how the tariff situation is developing."