Letter to My Future Self: The Fed's Waiting Game

July 16, 2025

Dear Me (Six Months From Now),

I'm writing this on a Tuesday afternoon when the 10-year Treasury is hovering around 4.7%, Tesla is about to report earnings next week, and the Fed is exactly two weeks away from their July 30th meeting where they'll almost certainly do absolutely nothing. Again.

The federal funds rate sits at 4.25-4.50% for the seventh consecutive meeting. Seven. Powell and his committee have turned monetary policy into a performance art piece titled "Waiting for Economic Clarity While Rome Burns at a Manageable Rate."

Let me paint you a picture of the madness we're living through right now. Tesla produced over 410,000 vehicles in Q2 and delivered over 384,000, yet their stock trades like a meme coin because nobody knows if they're a car company or an AI fever dream. They're reporting earnings on July 23rd, and the options market is pricing in a 12% move either direction. Twelve percent! For a company that makes cars and batteries.

Meanwhile, the Fed continues its interpretive dance around Trump's trade policies. They held rates steady in May as they waited for Trump's trade policy to take shape, and here we are in July, still waiting. The central bank of the world's largest economy has been reduced to reading tea leaves about tariff schedules.

Here's what keeps me up at night: The FOMC minutes from June show they maintained the interest rate on reserve balances at 4.4%, which means banks are getting paid nearly 4.5% to park money at the Fed while small businesses are getting crushed by borrowing costs. The transmission mechanism isn't broken—it's working exactly as designed, just not for the people who need it most.

I wonder if you'll remember this moment, Future Me. The moment when monetary policy became a spectator sport. When the most powerful economic institution in human history decided its primary job was to "wait and see" while asset prices detached completely from underlying economic reality.

The data tells a story of controlled chaos. Bitcoin touched $123,000 this week—more than double the median U.S. household income—while the Fed debates whether 4.5% is restrictive enough to cool an economy that's simultaneously overheating and stagnating. We have record highs in crypto, record lows in productivity growth, and record confusion about what any of it means.

Tesla will report earnings next week, and regardless of what they say, the stock will move violently because nobody knows how to value a company that's simultaneously an automaker, an energy storage provider, an AI company, and a cult of personality. Their Q1 operating income fell 66% to $400 million, but the stock trades like they invented the wheel. Again.

The Fed will meet on July 30th, and they'll hold rates steady because that's what they do now. They'll issue a statement full of carefully calibrated non-commitments about "data dependence" and "appropriate policy stance." They'll dodge questions about asset bubbles, ignore the growing wealth gap, and pretend that keeping rates at 4.5% while inflation runs at 3% is somehow neutral policy.

I'm writing this because I want you to remember the specific texture of this moment. The way uncertainty crystallized into paralysis. The way the most sophisticated monetary policy apparatus in history became a weather vane spinning in the wind of political pressure.

By the time you read this, we'll know whether the Fed's waiting game paid off or whether they waited too long. We'll know if Tesla's earnings justified the madness or if the whole thing was smoke and mirrors. We'll know if Bitcoin's march to $120,000 was the beginning of a new monetary regime or the final chapter of the greatest speculative bubble in human history.

But right now, in this moment, nobody knows anything. And that's exactly the problem.

The Fed has turned monetary policy into a live-action thriller where the heroes spend the entire movie deciding whether to cut the red wire or the blue wire while the bomb ticks down. Except the bomb is the economy, and the wire cutters are interest rates, and the hero is Jerome Powell, who keeps checking his watch and muttering about "data dependence."

Two weeks until the next Fed meeting. One week until Tesla earnings. Six months until I find out if any of this made sense.

I hope you're laughing at how wrong I was about everything. I hope the Fed found their backbone. I hope Tesla figured out what they actually are. I hope Bitcoin either crashed spectacularly or replaced the dollar entirely—anything but this eternal limbo.

But mostly, I hope you remember that in July 2025, when the future felt impossibly uncertain, at least we knew we were lost.

Your increasingly cynical former self,

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P.S. - If you're reading this after the July 30th FOMC meeting and they actually did something bold and decisive, please send a copy to the timeline where I'm writing this letter. We could use the hope.