Why the Fed Is Stuck Between Inflation and Rate Cuts

The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy · Jun 14, 2026 · 7m · transcript

Lucas and Luna dig into the Federal Reserve's current bind: inflation running at 4.2 percent annually, the effective fed funds rate at 3.63 percent, and real GDP growth just 1.6 percent. With the Fed's policy rate still below inflation, real interest rates are negative—something that hasn't happened this deep into a tightening cycle in decades. They examine the May CPI print, the flat unemployment rate at 4.3 percent, and the surprising surge in job openings to 7.6 million. The hosts ask whether the Fed can cut rates without reigniting inflation, or whether holding steady risks…