The Fed cannot decide

The FOMC minutes revealed a deeply divided committee: some members favour signalling readiness to cut if growth deteriorates sharply; others argue any cut would be premature given supply-driven inflation from the energy shock. "Stagflationary pressures" appeared in the official language for the first time since the Hormuz crisis began. Rate-cut odds swung wildly on the ceasefire — from 14% to 43% in a single session.

The Fed's indecision is not weakness. It is an accurate mirror of a situation that genuinely resists categorisation. The energy shock is inflationary. The war is deflationary (through demand destruction). The ceasefire is disinflationary (through oil crash). The AI boom is productivity-enhancing and energy-consuming simultaneously. The committee is divided because the signals are contradictory. The market wants a single narrative — "cuts are coming" or "hold steady" — and the reality refuses to provide one.