US: Is 3% Inflation the New 2%? | Metals Mine

  • US: Is 3% Inflation the New 2%?

    From macroeconomicpolicynexus.substack.com

    The FOMC’s decision to cut interest rates at its December meeting was not an easy one. Job growth has slowed and inflation remains elevated forcing the Fed to make a tough tradeoff as to which unwanted development is more important. The majority of the committee erred on the side of labor markets. But not everyone. Fed Presidents Austan Goolsbee of the Chicago Fed and Jeffrey Schmid of the Kansas City Fed wanted to hold off on interest rate cuts until we got more information on the balance of risk. President Goolsbee later explained his decision: Waiting to take this matter up in the new year would not have ... (full story)

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Trader#88C7
Dec 14, 2025 8:58pm
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If it is:
Then will the next 4% be the new 3%?

If it is:
You don't have anchored inflation expectations.

What you have:
Self reinforcing spiral of climbing asset prices and lack of trust in US debt.


Fed officials will always insist that 2% remains the target. Whether they mean it fully is another question. If the masses believe that 2% is not longer the target: Then it's already game over.
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