Fed ignores inflation concerns while signaling more monetary stimulus

In recent months, the Federal Reserve has continued its trend of cutting interest rates even as inflation rises in the United States. The Consumer Price Index (CPI) increased by 2.9 percent year-over-year in August 2025, reaching a seven-month high. This surge in inflation is coupled with a declining employment landscape, as Washington grapples with worsening fiscal and economic conditions. Despite these challenges, the Federal Reserve appears more focused on aiding financial markets and employment, driven by political pressures rather than addressing the inflation issue. This prioritization reflects a departure from their declared commitment to a two-percent inflation target, raising concerns over the long-term implications of such policies. The central bank's approach has led to stagnant real wages and increasing barriers to homeownership, particularly for first-time buyers, making housing affordability a growing crisis. As the federal government faces over $9 trillion in debt, the pressure mounts on the Fed to manage its monetary policy effectively without exacerbating the situation. The upcoming decisions by the Fed are crucial as they could either deepen the inflationary spiral or signal a shift towards fiscal responsibility.