It seems like every day we’re just waiting to see what the FED will do with interest rates and what Trump will do with tariffs… and every day, they just give us a new version of the same story.

And you know what’s funny? Every time we think something will finally change, we end up right back where we started. Statements, minutes, tweets, letters... and the markets trying to figure out what it all means for the next quarter. Exhausting, right?

**FED**

So the other day, the minutes from the FOMC meeting (that’s the committee that sets interest rates) were published, and what did we learn?

That yes, interest rates remained unchanged at 4.25%–4.50% for the fourth consecutive time, but there’s SERIOUS concern about inflation. Specifically, whether the tariffs that are starting to kick in will reignite it.

Because what are tariffs, in practice? A tax. A cost that gets passed on to the consumer. Meaning: import costs rise > shelf prices go up > inflation increases > the FED gets nervous about cutting rates too quickly.

That said, quite a few committee members mentioned that if the economy evolves as expected, a rate CUT might come later this year. In fact, some are even eyeing the next meeting as a possible moment for it. Some believe inflation has stabilized and that long-term inflation expectations remain under control.

BUT. And here’s the kicker: if tariffs turn out to be more persistent than expected, or if inflation sticks around because of them, then… forget the cuts. The scenario flips. Back to tighter policy.

And as if that wasn’t enough, the big scary word came up: stagflation. That’s when you have BOTH low growth AND high inflation at the same time. A central bank’s worst nightmare.

That would put the FED in a huge dilemma. Support growth with lower rates? Or fight inflation by keeping them high? Options shrink, and the risk of mistakes increases.

In any case, the FED essentially sent one message: “We’re waiting to see. Don’t pressure us.” Meanwhile, Trump keeps hammering them.

**TRUMP AND TARIFFS**

And since we brought up Trump, let’s talk tariffs. If you thought the 90-day “pauses” he announced had settled the issue… guess again.
 https://img.leopedia.io/DQmX4ZebcbDRzbHZmRGDMbbapc2uPmd6E3c7cE9y6yuCpZP/image.png 

[source](https://www.cnbc.com/2025/07/09/trump-tariff-letters-trade.html)
Just the other day, president Trump announced new tariffs on another 7 countries: the Philippines, Libya, Iraq, Sri Lanka, Moldova, Algeria, and Brunei. And these come on top of the 14 that had already been notified earlier this week.

So in total, we now have 21 countries facing new tariffs between 20%–40%. And those numbers are expected to grow.

And don't forget that yesterday he announced a 30% tariff in Europe.

And it doesn’t stop there. In the letters he sent them, he said the tariffs are “less than what you actually deserve,” and that they may be revised in the future… depending on how good of friends we turn out to be. In other words, trade policy based on political friendship.

Put another way, trade policy used as a negotiation tool. Or to put it even more bluntly… as leverage.

And the best part? Most of these countries aren’t even significant trading partners for the U.S. So the whole thing feels more like political theater than serious strategy. It’s for headlines, not for economics.

Still, the tariffs officially take effect on August 1st, with no further delay. Trump made it clear: “No extensions will be granted.”

So yeah, we might laugh at the spectacle, but the consequences are real. And they could lead to a new wave of uncertainty for markets, inflation, supply chains, and more.

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