Three Roads to Ruin: The Fed’s Tariff Dilemma and the Manufactured Stagflation Trap

Beth Hammack, the freshly-minted President of the Cleveland Fed, isn’t just forecasting the future—she’s sketching out survival maps for a nation boxed in by its own economic contradictions. Her warning? Tariffs might be the match, but it’s the institutions—the Fed, Congress, the executive machine—that are drenched in kerosene. Gone is the era of comfortable “baseline forecasts,” those bureaucratic daydreams designed to soothe markets and sedate the public. Hammack is doing something rare for a Fed official: she’s admitting there’s no safe road ahead. Instead, she lays out three scenarios, none of them good, each of them exposing the house-of-cards logic behind American economic policy. SCENARIO 1: Short-Term Inflation, Long-Term Bleed Tariffs, she says, may deliver a “one-time” price shock. Don’t…