Azoria CEO: The Fed Has Been Flying Blind on Inflation and Interest Rates

Fed's Data Deficit and Economic Blindness

• ✈️ The Federal Reserve has been flying blind since President Trump took office, according to Azoria CEO James Fishbach.
• 💡 This blindness stems from a failure to recognize that tariff inflation has not been a real thing.
• 📈 Fishbach points to job creation (1.9 million for native-born workers) and strong GDP growth (4% projected for Q3, 3.8% revised for Q2) as evidence the Fed has ignored.

Interest Rate Policy and Economic Impact

• 📉 Fishbach argues that the Fed, under Jerome Powell, has been obstinate and recalcitrant in not lowering interest rates.
• 🏠 High interest rates are hurting working Americans, making mortgages and loans unaffordable and hindering contributions to economic growth.
• 📊 The current interest rate level is inappropriate, especially since headline inflation was 6% the last time rates were this high, compared to a 1.9% annualized CPI inflation since Trump took office.

Mixed Signals from Fed Officials

• 🗣️ Fed officials are sending mixed signals regarding future rate cuts, with some advocating for more cuts and others deeming it too risky.
• 🤝 Despite political and background differences, Fed Presidents Mary Daly and Governor Steven Myron agree that interest rates are too high and need to be lowered to maintain economic strength.
• 🎯 Fishbach praises Steven Myron for bringing substance, logic, and evidence to the Fed board, finding agreement with those who believe Powell and other board members are wrong about not lowering rates.

Interest Rates as a Cause of Inflation

• 🏗️ Fishbach contends that high interest rates are actually creating inflation, particularly in the housing market.
• 🧱 When construction builders cannot get loans due to high rates, they cannot build new houses, thus limiting supply.
• 🏡 Lowering interest rates would enable more home construction, increasing supply, lowering home prices, and consequently reducing inflation.