Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
The Fed's Real Rate Trap as Inflation Stays Sticky
Lucas and Luna dig into the contradiction at the heart of Fed policy in mid-2026: the federal funds rate sits at 3.63 percent, but with CPI running at 4.2 percent, the real interest rate is negative. They break down why that matters for the economy, what it signals about the Fed's next move, and how the ECB's recent rate hike complicates the picture further. Using data on the 10-year breakeven inflation rate and the surprising surge in job openings, the hosts explain why the Fed may be caught between inflation that won't cool and a rate it can't cut without risking a…
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