The Fed's Tough Dilemma: Balancing Geopolitics and the US Economy.

The US Federal Reserve Chair, Jerome Powell, faces a difficult decision as he weighs the risk of historic inflation against the threat of a financial and economic disaster, according to financial researcher Luke Gromen. The core issue lies with the US government's debt and deficit spending, which is exacerbated by the Fed's inflation fight. If the Fed keeps hiking rates to crush inflation, it risks causing a recession that results in lower tax revenues, banks selling Treasuries to offset more loan defaults, and the government spending aggressively to shore up the economy, he said. Essentially, the Fed has to choose between letting inflation run riot or tightening its policies further and risking a financial and economic disaster.