Stagflation is here, and it is persistent.

Stagflation Web CompTranslation: stagflation is here, and it is persistent.

The very first sentence of the FOMC statement unexpectedly downgraded the state of the US economy: “Recent indicators of spending and production have softened.”

The third sentence, however, observed the elevated inflation (which the Fed naturally blamed on Putin because otherwise Biden would fire Powell): “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”

This, as Renaissance Macro’s Neil Dutta put it best, means that “the Fed marked down its growth assessment and still ended up going as much as it did in June.”