This week on The Economic Effect, host John Silvia analyzes the Federal Open Market Committee’s recent decision to lower the federal funds rate and adjust its balance sheet strategy—moves aimed at supporting growth but likely to add pressure on inflation and weaken the U.S. dollar.

John breaks down the implications of these policy shifts on markets, inflation, and labor dynamics, offering his perspective on why the Fed’s actions may risk fueling another round of speculative excess. He also examines signs of financial market overextension, rising consumer delinquencies, and the growing disconnect between profit fundamentals and equity prices.

The key takeaway: in a “run it hot” economy, caution remains the most valuable asset.

Stay informed—subscribe to The Economic Effect and sign up for John’s weekly newsletter at johnesilvia.com.