Fed Admits the Economy May Be Hitting a Wall — And “Uncertainty” Is the New Tax
A Jobs Report That Spooked the Fed
July’s jobs report came in weaker than expected, with average job growth over the past three months running at just 35,000 per month. Even worse, the Labor Department issued large downward revisions to May and June’s numbers.
Federal Reserve Governor Lisa Cook, speaking alongside Boston Fed President Susan Collins, called the report “concerning” and noted that such revisions are “typical of turning points” in the economy — a phrase that should grab every investor’s attention. Translation: this is the kind of data pattern we see when the expansion phase is ending.
The Hidden “Uncertainty Tax” on Business
Cook and Collins both hammered on what they’re hearing from CEOs and CFOs across industries: the “uncertainty tax.” This isn’t a literal tax — it’s the massive drag caused by unpredictable policy, fluctuating tariffs, and volatile costs.
According to Cook, business leaders are now spending 20% to 45% of their time managing this uncertainty instead of focusing on growth, hiring, or innovation. That’s almost half the workweek eaten up by guessing what Washington or the global trade environment will look like next quarter.
The unpredictability is hitting pricing decisions as well. Some firms are preemptively raising prices to get ahead of potential cost spikes, while others are delaying increases until they see if suppliers blink first. Either way, the consumer is caught in the middle — and wallets are already thin from years of elevated inflation.
Tariffs, Inflation, and the Consumer Squeeze
While inflation has eased from its 40-year peak in 2022, it remains above the Fed’s 2% target, keeping price levels high. Collins pointed out that even a slowdown in inflation doesn’t lower the inflated prices we’re already paying — it just means they’re rising more slowly. Consumers, she warned, remain hypersensitive to price changes, and businesses know it.
Layer in the Trump administration’s shifting tariffs — up one month, down the next, depending on negotiations — and you’ve got a business environment that’s neither stable nor predictable. That’s a nightmare for long-term planning and a strong signal that the next Fed rate decision could be a cut born of desperation, not strength.
What This Turning Point Means for You
When job growth stalls, revisions trend downward, and the central bank starts whispering about “inflection points,” it’s time to think beyond the next payroll report. The Fed’s playbook in a slowdown is always the same: cut rates, weaken the currency, and pray the liquidity injection props up demand. The cost of that prayer? Your purchasing power.
Bill Brocius has been warning for years that these “soft landing” stories are just smoke before the storm. His guide “7 Steps to Protect Your Account from Bank Failure” isn’t just for deposit safety — it’s a step-by-step plan to shield your savings from the currency erosion and market volatility that follow every Fed panic.
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