Money printing begins on December 12. How can the Fed cut rates for weakness while claiming growth is stronger than expected? A sign liquidity in the banking system is too tight? Trillions in U.S. debt that expires in 2026. The Fed’s dual mandate has become a dual trap.

by

https://twitter.com/NorthmanTrader/status/1998841788585365948

THE FED JUST BROKE ITSELF

December 10, 2025. Remember this date.

The Federal Reserve cut rates 25 basis points while three members voted against it. But here is what no one is telling you: they dissented in opposite directions.

One voted to cut harder. Two voted to cut nothing.

This is the most divided Federal Reserve in six years. And it gets worse.

In the same breath they signaled rate cuts are finished, they announced $40 billion per month in Treasury bill purchases starting Friday. They call it “Reserve Management.” The balance sheet calls it expansion.

They are easing and tightening simultaneously. Cutting rates while warning they are done cutting. Shrinking forward guidance while growing their holdings.

The cognitive dissonance is now official policy.

The deeper fracture: Trump’s appointee Stephen Miran pushed for 50 basis points. Kevin Hassett, the frontrunner to replace Powell, said publicly he would vote the same way hours before the decision. The political capture of monetary policy is no longer theoretical.

Meanwhile, the committee made this decision blind. A 43 day government shutdown delayed October and November data. Powell admitted they will view incoming numbers with “a skeptical eye.”

They are flying without instruments into a storm they cannot name.

One projected cut remains for 2026. Inflation sits at 2.8 percent, forty percent above target. The labor market weakens while prices refuse to fall.

The Fed’s dual mandate has become a dual trap. Serve employment and inflation wins. Serve price stability and jobs lose.

There is no risk free path. Powell said it himself.

The institution designed to provide certainty just institutionalized contradiction.

Prepare for volatility. The referee just admitted they cannot see the field.

The U.S. Treasury has a massive problem nobody wants to talk about…

Take a good look at this chart.

That giant blue spike?

Yeah… that’s trillions in U.S. debt that expires in 2026. Not 2030. Not 2040.

2026.

And all of it has to be refinanced at much higher interest rates than the near-zero environment it was originally issued in.

In simple terms:

– The U.S. loaded up on cheap debt.
– That cheap debt now has to be rolled over at expensive rates.
– Interest costs are about to explode.
– Something has to give. Markets, taxes, spending, or the dollar.

This is the kind of structural time bomb that doesn’t hit immediately…

but when it does, it hits everything.

Stocks. Bonds. Housing. Crypto.

No market is immune when a sovereign debt wall this big comes due.

Keep your eyes open because most people will notice this after it’s too late.

I was one of the only people who called the top in October, and I’ll do it again, that’s literally my job. Pay close attention.

Alot of people will wish they followed me sooner.