Thoughtful Money with Adam Taggart SPECIAL REPORT: Federal Reserve Guidance Reaction With Axel Merk
May 8, 2025
In this insightful discussion, Axel Merk, a seasoned portfolio manager and keen Fed-watcher, shares his immediate reactions to the latest FOMC release and Jerome Powell's press conference. He critiques the Fed's communication strategy amid economic uncertainties and discusses the delicate balance the Fed must maintain in its decision-making. Topics include the challenges of trade deficits, the role of bond vigilantes, and the impact of oil prices on mining profitability, while offering valuable insights into investment strategies in today's evolving market.
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Fed Admits Uncertainty Openly
- The Fed openly acknowledges uncertainty, saying "we don't know" rather than pretending certainty.
- This shift fundamentally changes market focus from Fed actions to external variables like tariffs.
Fed Focuses on Financial Stability
- The Fed prioritizes financial stability over aggressive rate maneuvers amid supply shocks.
- Lower rates in a supply shock economy worsen inflation, limiting Fed's stimulus options.
Tariffs Distort Economic Data
- Trade policy creates distorted economic data, complicating interpretation of key indicators like GDP.
- Data becomes unreliable during tariff-induced import surges and uncertainties, hindering policy decisions.