The smart people @ the office tells Tp4, we're headed into a situation where the Fed's "tools" don't really work, because there's no longer any coherence with policy.
The fed can only do so much and it needs to go hand in hand with policy.
None of it matters when tarriffs are so high no company can afford or is willing to buy anything overseas (where it all comes from, are you going to place an order when you aren't sure what it will cost by the time it arrives, especially at an insane rate, hell no. You can't do business that way. Just look at the Nintendo Switch 2, that's why they delayed it.
It's already created a 2-3 month backlog, even if corrected today, in a couple months is when you will see the current inventory dry up and prices rise before slowly coming back down over a period of months and only if it stabilize and shipments arrive.
Right now is when companies need to be making their bulk Christmas orders in order to receive it in time, between now and late summer is pretty much the worst time of the year to be playing with tariffs on China. A lot of stores, like Target and Best Buy make 90% of their yearly profit over Christmas, it's why they all have so many registers sitting idle most of the year, they're there for the holiday rush. Best Buy probably won't survive and they won't be alone and that's without a recession, that's just from a small tariff creating instability. One local bike shop here closed its doors the first day they announced the first tariffs.
If it does impact Christmas it's going to be just like the Covid chip shortage except for almost everything from China and it's going to kill a LOT of companies.