🎭 FOMC’s September 17 Dilemma: A Rate Cut Amid Bubbles, Debt, and Geopolitics

⚖️ Powell’s Prisoner’s Dilemma

Fed Chair Jerome Powell finds himself caught in what many describe as a prisoner’s dilemma:

• Cut too little (25bps), and the economy may stumble further into weakness.
• Cut too much (50bps), and he risks fueling financial excesses and igniting another wave of inflation.

Complicating matters, President Trump has loudly called for rates near 1%, pressuring the Fed to prioritize growth and debt relief over inflation discipline.

🏚 A Weakening Economy, A Fragile Jobs Market

The backdrop for this meeting is unmistakably fragile:

• U.S. payrolls have grown by less than 1% over the past year — the slowest pace since March 2021.
• Historically, every time in the last 50 years when jobs slowed to this pace, a recession and rising unemployment followed.
• Inflation has remained stubbornly above the Fed’s 2% goal, hovering closer to 4% annually.

This mix of sluggish growth and sticky inflation has put the Fed in a bind: loosen too aggressively, and inflation re-accelerates; tighten or hesitate, and the economy risks breaking.

🏦 Trump, Miran, and the “Mar-a-Lago Accord”

President Trump recently appointed Stephen Miran — his former economic advisor — to the Fed’s Board of Governors. Miran is no ordinary economist. His writings outline a blueprint to restructure the global trading and monetary system, including what some call a new “Mar-a-Lago Accord”:

• Aggressive tariffs tied to currency policy.
• Pressuring U.S. allies to finance America’s deficits by buying Treasuries — or face tariffs.
• A pivot toward gold as a neutral reserve asset.

In our opinion, this is not just about interest rates. As we’ve explored in the this year’s In Gold We Trust report, there’s a grandiose, though risky, plan to redefine the US’s role in the global financial order, tying monetary policy to a larger strategy of trade rebalancing, de-dollarization risks, and gold’s resurgence.

📈 Markets at All-Time Highs — And Yet Cuts

Slashing interest rates while nearly every major asset class is at record highs is unprecedented:

1. Stocks: The S&P 500 logged its 25th all-time high this year, with valuations rivaling the dot-com bubble.
2. Housing: Home prices are at historic peaks.
3. Bitcoin: Surging to new highs.
4. Gold: Up more than 40% in 2025, its best run since 1979.
5. National Debt: Interest expenses have ballooned to $1.21 trillion annually, surpassing defense spending.

In past bubbles, the Fed was raising rates. Today, it is cutting — pouring fuel on the fire.

💣 Debt, Deficits, and the Case for Cuts

There’s a fiscal angle that cannot be ignored. Cutting rates reduces the government’s debt burden, at least temporarily. With the U.S. spending more on interest than on defense, lower rates offer relief. But this comes at a cost: easier credit risks re-stoking inflation, keeping consumer prices persistently above target.

🪙 Gold and Silver: The Clear Winners

Whatever the Fed decides — 25bps or 50bps — the trend is clear:

• Precious metals thrive during easing cycles. Silver, for instance, has historically averaged triple-digit gains in Fed cutting cycles.
• With markets already jittery about the dollar’s role, gold and silver are stepping into the monetary spotlight, not only as inflation hedges but as potential anchors in a restructured global system.

🚨 Final Takeaway

Today’s FOMC decision will be framed as a technical adjustment to support growth. But in reality, it reflects a deeper inflection point:

• The U.S. economy is slowing, the labor market is flashing red, and inflation is still above target.
• Political pressure is mounting for far more dramatic cuts.
• And behind it all, Washington is preparing for a monetary reset, where trade, debt, and gold converge.

Whether the Fed cuts by 25bps or shocks with 50bps, the broader trajectory is set. We’re moving toward lower rates, higher debt burdens, and a world where gold and silver matter more than ever.

#FOMC #FederalReserve #InterestRates #FedFunds #MonetaryPolicy #MonetarySystem #TradeWar #FedIndependence #JeromePowell #DonaldTrump #StephenMiran #MarALagoAccord #GlobalTrade #EconomicStatecraft #IGWT25 #PreciousMetals #GoldSurge #GoldInvesting #SilverStacking #SilverSqueeze #SafeHaven #SoundMoney #HardAssets #USDebt #Stagflation