The unelected central planners at the Federal Reserve rely on a three-legged stool to make its decisions:

  • Inflation
  • Unemployment
  • S&P 500 (SPY)

When multiple legs are broken (as they are now), it leaves the economy in a vulnerable position to fall flat on its face. 

In this clip from The Macro ShowKeith McCullough discusses the current U.S. predicament and similar setups that spawned recessions in 2001 and 2008.  

“The government spent their brains out to make sure we weren’t in a recession,” McCullough explains. “So now, next year against those comparisons, they took the probability straight up that we’re going to be in a recession.” 

“[The Fed] isn’t going to cut interest rates until the stock market crashes, or inflation is at 2%,” McCullough adds.

Europe faces similar issues with inflation and unemployment. The difference is they know they’re in a recession, while the U.S. remains in denial. 

“The ECB is one of the youngest central planning organizations,” McCullough adds. “It has a 100% batting average raising interest rates into a recession. They did it in 2008, 2011 and 2023. That’s 3/3. You guys are awesome.” 

Watch the full clip above. 

McCullough: Fed Won’t Cut Rates Until Market Crashes, Or Inflation Is At 2% - TMS Banner