Steve Forbes Calls Out Fed's Inflation Strategy on Kudlow
Forbes says the Fed is fighting inflation wrong. Retailers beating earnings may prove his point.
Steve Forbes went on Larry Kudlow's show and didn't mince words: the Federal Reserve is swinging at the wrong target. Instead of obsessing over interest rates, Forbes argues the Fed should cut money printing, actively shrink its balance sheet, and push for a stronger dollar to hammer import-driven inflation at its actual source.
The logic is straightforward. When the dollar is weak, everything imported costs more — goods, components, raw materials. A stronger greenback flips that equation. Forbes believes the Fed's current playbook ignores this transmission mechanism entirely, leaving American consumers exposed to price pressures that rate hikes alone can't fix.
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Here's the tradeable angle: retailers are quietly handing you the data. Several have posted surprise earnings beats recently, and that could signal that import cost pressures are shifting in ways the mainstream inflation narrative hasn't fully priced in yet. If Forbes is right and dollar strength is the actual lever, watch currency-sensitive consumer names closely.
The balance sheet argument is equally pointed. The Fed ballooned its holdings during the pandemic era and has been slow to unwind them. Forbes sees that lingering liquidity as an ongoing inflation accelerant — one that rate policy alone can't sterilize. Shrinking the balance sheet faster, in his view, is non-negotiable.
Whether you agree with Forbes or not, the retailer earnings data deserves your attention right now. Markets are telling a story that the Fed's models may be missing. Continue reading at Yahoo.
