What’s happening now fits squarely within my thesis that Powell is using monetary policy not just to manage inflation, but as a geopolitical weapon of delay, designed to trap adversaries and force the world to bend to U.S. dollar hegemony. The recent stalling of a September rate cut isn’t just about economic data; it’s about timing, leverage, and optics. With tariffs now reimposed or expanded on key supply chain partners like South Africa, Malaysia, and South Korea, Powell gains a politically defensible excuse to wait: “we’re monitoring inflation risks from trade dynamics.” This gives the Fed cover to pause even as domestic data deteriorates, not because they can’t cut, but because strategically, they don’t want to yet.
The broader play here is that the Fed is intentionally creating global asymmetry. While much of the world from Europe to China to the EM bloc is easing or preparing to ease, the U.S. is holding rates high, forcing capital inflows into dollar-denominated assets, tightening global liquidity, and weakening the fiscal and monetary positions of geopolitical rivals. This creates maximum pressure on BRICS-aligned economies who are already strained under the weight of capital flight, FX volatility, and rising funding costs. Countries like Brazil, Turkey, and South Africa are in a double bind: they can’t tighten without wrecking growth, and they can’t ease further without risking currency collapse. Powell’s “pause” becomes a global vice grip.
Now, here’s the part few are saying out loud: the Fed could still cut in September, if systemic cracks widen (watch for softening supercore PCE, sticky CPI dropping, stress in Treasury auctions, and swap spreads going negative), Powell will act. But he’s delaying because that delay is useful. It holds the line on credibility, avoids signaling a premature dovish turn, and most importantly, lets other central banks exhaust their ammo first. Every day Powell waits, foreign governments burn more capital defending their currencies, drawing down reserves, or backstopping their sovereign debt markets.
If this administration actually wanted a cut now, it would lift the tariffs and shift the inflation narrative but that’s not happening. The tariffs are giving Powell the excuse to hold, and that’s the signal. The Fed’s pause is not indecision. It’s design. This is economic warfare wrapped in monetary policy. And unless something truly breaks in funding markets, in labor, or in inflation metrics, Powell will keep the world in suspense while the dollar quietly reasserts control.
What’s happening now fits squarely within my thesis that Powell is using monetary policy not just to manage inflation, but as a geopolitical weapon of delay, designed to trap adversaries and force the world to bend to U.S. dollar hegemony. The recent stalling of a September rate… https://t.co/B1Dt1g6ok4
— EndGame Macro (@onechancefreedm) July 7, 2025
