The Fed Finally Admits Tariffs Are Not Inflationary

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To investors,

People tend to have amnesia when it comes to financial markets. It was only a few months ago that max fear had spread like wildfire across Wall Street.

People were promising recessions and depressions. They swore that tariffs would bring sky-high inflation to American consumers. And turning on your television was the fastest way to get duped into dumping every asset you owned before financial Armageddon showed up.

Of course, this all looks ridiculous in hindsight. Literally insane. The US government put economic policies in place that protected US companies, encouraged GDP growth, and didn’t require an increase in prices for American consumers.

Now that last part will have some of you reeling in disgust. You will still argue that tariffs are inflationary. By placing the tariffs on imports, you will claim consumers are required to pay a higher price, which would make tariffs a tax.

But that has not happened. You don’t have to believe me either. Federal Reserve Chairman Jerome Powell said it himself yesterday. Here is what he said:

“We’re now collecting a good bit of revenue...$300 or 400 billion dollars a year pace [from tariffs].” “Who’s paying that? So far...it looks like it’s the middle group, retailers and importers, THEY’RE NOT passing along to consumers that much of the cost. The actual impacts on inflation have been quite modest so far. It’s a small amount.”

So there you have it. The leader of the United States central bank is telling you the previous consensus on tariffs was completely wrong. Tariffs have not been inflationary. In fact, Truflation shows that inflation has dropped from over 3% at the start of the year to only 2.05% as of this morning.

So the Fed is telling you tariffs didn’t bring inflation. Truflation is telling you inflation went down this year, instead of up. But there are still plenty of people who will not believe it.

More importantly, this entire situation was very obvious from the start. On April 3rd, one day after Liberation Day, I tweeted “Stocks and bitcoin will likely be at all-time highs again before the end of the year. All this noise will quickly be forgotten.”

People were laughing at me. They thought I had lost my mind. Many people accused me of being a MAGA shill. Whatever their critique, they simply could not fathom that tariffs would not be destructive and the likelihood that stocks would go back to all-time highs by year end.

Here we are though. Asset prices are at, or near, all-time high prices. Stocks, bitcoin, gold, and more. Everything has come flying back. Inflation isn’t a problem. The Federal Reserve is waiving the white flag and capitulating on interest rate cuts. And maybe most importantly, GDP is surging higher as the impact of artificial intelligence seeps into every corner of the economy.

Companies are growing faster and they are doing it with less employees. Efficiency is taking over the market. Investors are increasing their portfolio values. The government is capturing hundreds of billions of dollars in newfound tariff revenue.

There are still some bears out there predicting the next big market crash. But history tells us things are likely to keep improving for the foreseeable future. Cutting interest rates with stocks at all-time highs is unlikely to see stocks go down. So stop listening to the insane neighbor or your favorite economics professor on TV.

Look at the data. Study history. Do the work by seeking out the source material. The pessimist always sound smart, but they rarely make money. And 2025 is just the latest example. In the words of Warren Buffett, never, ever bet against America.

We are winning. And I don’t see that stopping any time soon.

Hope you all have a great day. I’ll talk to everyone tomorrow.

- Anthony Pompliano

Founder & CEO, Professional Capital Management

Anthony Pompliano Explains Bitcoin Outlook For Q4

Anthony and John Pompliano discuss bitcoin, why gold has been doing so well, Strive buying Semler Scientific, bitcoin treasury companies, and can AI replace the Fed?

Enjoy!

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