🚨 Fed Sheds $15.5B — Market Tensions Simmer Beneath the Surface 🚨

This week, the Federal Reserve quietly reduced its balance sheet by $15.5 billion — but the real story lies beneath the surface. While markets may appear calm, a wave of caution is building from within the Fed itself.

Neel Kashkari didn’t mince words: the greatest threat to the economy right now is rising uncertainty. Escalating trade tariffs are stoking a dangerous mix — slowing growth alongside persistent inflation. That’s the formula for stagflation, and it’s creeping closer with every tariff extension.

John Williams acknowledged that inflation is cooling — just not fast enough. The labor market remains in a delicate balance, but global trade tensions are a destabilizing force. For now, the Fed remains cautious, with no immediate rate moves in sight — but they’re watching every economic signal with laser focus.

Austan Goolsbee struck a more optimistic tone. If trade tensions ease, there's a pathway to potential rate cuts. But drawn-out legal disputes over tariffs could cloud that outlook for months to come.

Mary Daly added her voice: yes, the labor market is strong and inflation is gradually coming down — but don't expect to hit that 2% inflation target this year. For now, policy holds steady, yet any escalation in trade conflict could upend the Fed’s carefully laid plans.

👉 The message is clear: the fight against inflation isn’t over, the job market is walking a tightrope, and trade disputes could flip the script overnight.

The Fed’s balance sheet is trimming down — and so is the margin for error.

📉 Watch the data. 📊 Watch the headlines.

The Fed’s next decision might not just move the markets — it could redefine the economic landscape.

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