Economic storm BREWING as Fed resistance sends SHOCKWAVES through the markets

Federal Reserve Actions - The recent interest rate cuts by the Federal Reserve are viewed as insufficient and delayed, with suggestions that they should have started in June [1] - Concerns are raised that the Fed's approach may continue to hinder economic growth into 2026, impacting jobs and mortgages [2] - The Fed's reliance on outdated economic models is criticized, suggesting that these models are detrimental to the economy [3][5] Interest Rates and Economic Trust - The current high mortgage rates are attributed to the 10-year yield remaining above 4%, indicating a lack of trust in the Fed's monetary policy [4][6] - A shift in the Fed's monetary policy model is proposed to lower interest rates across the yield curve, which could subsequently reduce mortgage rates [7] Federal Reserve Leadership - The search for a new chairman of the Federal Reserve is underway, with candidates including former Fed Governor Kevin Worsh and Kevin Hasset, who is seen as a front-runner [8][9] - The current board's reluctance to cut rates is highlighted, with a significant portion of the Federal Open Market Committee (FOMC) opposing recent cuts [10][11] Economic Growth and Policy - The Fed's current models are seen as conflicting with the goal of fostering a growth-oriented economy, as they impose limits on economic speed [11][12] - President Trump's focus on economic growth and investment is contrasted with the Fed's inflation-targeting approach, which is deemed ineffective [5][14] Trade and Tariffs - The Supreme Court's upcoming decision on the use of emergency tariffs is anticipated, with potential implications for revenue and trade practices [15][18] - The administration is exploring alternative constitutional statutes to replace any lost tariff revenue, indicating a proactive approach to trade policy [16][20] Small Business Lending - Weakness in small business lending is identified as a critical issue, with the Fed's current models failing to support job growth in this sector [20][21] - The impact of AI on job replacement is acknowledged, alongside efforts to promote trade schools to address workforce needs [22]