The Federal Reserve delivered a widely expected quarter-point interest rate cut, but the decision sparked debate over whether it addresses the underlying pressures in the economy. On Chicago’s Morning Answer, market analyst Scott Shellady voiced frustration with the Fed’s messaging, saying inflation remains a stubborn and under-discussed problem.
Shellady noted that while the Fed projects additional cuts this year and into 2026, it also conceded that inflation will remain above its 2 percent target until at least 2028. He pointed to the record-high U.S. money supply as a warning sign. “Inflation is going to be a story by the end of this year or next year, and nobody wants to talk about it because everyone is chasing rate cuts,” he said.
The veteran trader criticized Fed Chair Jerome Powell for what he called “risk-management cuts,” suggesting the central bank is prioritizing political optics over sound economic policy. He added that inflation disproportionately hurts Americans without stock portfolios or home ownership, while wealthier households often profit from rising asset values. “The man on the street is getting squeezed,” Shellady warned.
Beyond monetary policy, Shellady discussed broader structural challenges. He highlighted Germany’s massive industrial layoffs as a cautionary tale for the United States, where rising labor costs and regulation could erode competitiveness. He also flagged the role of corporate real estate investors, such as Blackstone, in worsening housing shortages, though he argued burdensome permitting rules are a bigger obstacle to new construction.
Shellady suggested that advances in artificial intelligence could eventually help counter inflation by boosting productivity, even as it reshapes the labor market. For now, however, he said the Fed’s approach risks leaving ordinary Americans with higher prices and limited relief.