Inflation Is Getting Slippery Again – And Neither the Fed Nor Tariffs Are the Answer

You know it's serious when a Federal Reserve insider starts sounding the alarm in public.

This time, it’s Austan Goolsbee, president of the Chicago Fed, admitting what many of us already suspected: inflation isn’t just refusing to die—it may be gaining new life. And if Goolsbee is “nervous,” the rest of us should be preparing, not praying.

He’s not wrong about the problem. But the solution? That’s where the establishment narrative collapses under its own contradictions.

The Fed’s Trap: Fighting Inflation With Tools That Don’t Work Anymore

Let’s get this out of the way: the Federal Reserve has no idea what to do right now.

It’s been cutting rates again, starting with September 2025, in an attempt to stimulate the softening labor market. But inflation is creeping higher at the same time. That’s the classic setup for stagflation—rising prices combined with stagnant or declining economic activity.

This is the Fed’s nightmare scenario. Why? Because the Fed’s dual mandate—to promote maximum employment and stable prices—was always a political compromise, not an economic strategy. You can’t cut rates to juice jobs and stop inflation with higher rates simultaneously. It’s like trying to slam the gas and brakes at the same time. You burn out the engine.

Goolsbee admits this: if inflation gets sticky and unemployment climbs, the Fed loses its ability to do anything meaningful. It can only choose which part of the economy to wreck.

This isn’t a new problem. It’s a replay of the 1970s—with more debt and fewer options.

Tariffs: The Other Blunt Instrument No One Wants to Talk About Honestly

Now enter tariffs—the economic equivalent of shooting yourself in the foot to punish your enemy.

Goolsbee points to recent price hikes driven by new tariffs and warns they might not be “one-and-done.” That’s putting it lightly. Tariffs on intermediate goods (used in U.S. manufacturing) don’t just make imports more expensive—they ripple through the entire economy, raising costs for businesses and ultimately for consumers.

It’s not just about paying more for Chinese steel or Mexican auto parts. It’s about your groceries, your household appliances, and the services that depend on those goods.

And if the current wave of tariffs triggers retaliatory moves from other nations—which it almost always does—then the inflationary fire spreads globally.

Worse still, tariffs give politicians the illusion of action. They’re headline-friendly, emotionally satisfying, and economically disastrous. They’re protectionist theater at the expense of the consumer.

So here we are: central banks tightening and loosening policy simultaneously, while the government taxes imports in a misguided effort to look tough on trade. And no one is talking about the real elephant in the room.

The Real Risk: A Dollar That’s Running Out of Trust

The Fed wants you to believe inflation is a domestic issue. But monetary policy doesn’t exist in a vacuum. The U.S. dollar is the world’s reserve currency—at least for now. And that status depends on global trust in American fiscal discipline and monetary stability.

Right now, both are eroding.

Federal deficits are exploding. National debt just passed $39 trillion, with no political will to reverse course. Meanwhile, the Fed is flip-flopping between rate cuts and rate hikes like a pilot who’s lost the instrument panel.

The danger isn’t just rising prices at the pump or the grocery store—it’s a collapse in confidence. If that happens, foreign holders of U.S. debt could begin offloading Treasuries, driving interest rates higher even as the Fed tries to cut. That’s the real death spiral.

What You Should Be Doing Instead of Waiting for the Fed

Don’t count on the Fed to save you. Don’t count on tariffs to protect American jobs. Don’t count on politicians to do anything other than bicker and posture. The system is jammed, the models are outdated, and the people in charge are playing catch-up in a game they don’t even understand anymore.

What can you do?

Hedge.

In an environment like this—where inflation is stubborn and unpredictable—you hedge with real assets. Not paper promises. Not financial engineering. Not wishful thinking.

That means:

• Precious metals: Gold and silver don’t pay interest, but they don’t default either. They’ve been money longer than central banks have existed.
• Commodities: Energy, agriculture, and industrial materials hold value when fiat currencies don’t.
• Land: Tangible, productive property remains one of the most reliable inflation hedges over time.
• Selective equities: Businesses with pricing power and essential products can ride inflation better than most.

Be cautious of long-dated bonds or fixed income instruments that will get crushed in a rising rate environment. And don’t assume cash is safe if it’s losing 3–5% of its value annually in real terms.

The Takeaway: We’re Flying Blind

No one can say for certain where inflation is going. But the risk profile is no longer tame.

The Fed says it's "data-dependent"—but with a possible government shutdown looming, the data itself could be delayed or distorted. That leaves policymakers blindfolded and markets twitchy.

What’s next? Maybe inflation spikes again. Maybe it drifts sideways. Or maybe the U.S. enters a slow-motion economic squeeze that leaves the middle class sandwiched between falling wages and rising costs.

Whatever the outcome, the time for complacency is over.

You can’t fight inflation with hope and politics. You fight it with discipline, preparation, and hard assets.