The Fed Hits Pause Again-But the Clock Is Ticking

On June 18, the Federal Reserve decided, once again, to leave interest rates unchanged at a 23-year high of 4.25% – 4.5%. This marks the fourth straight meeting without a rate change, suggesting the central bank is still uncertain about the path forward.

But what's catching headlines isn’t just what the Fed did, but what they signaled.

Inflation Isn’t Going Away Quietly

Despite over a year of higher borrowing costs, the Fed still expects inflation to remain above 3% through the end of 2025, well above its 2% target. Core inflation, the Fed's preferred measure that strips out food and energy, has proven especially sticky.

While policymakers continue to talk tough on inflation, the cracks in the foundation are showing.

According to CNBC's coverage of the meeting, Federal Reserve Chair Jerome Powell emphasized that the committee needs "greater confidence" before pivoting to rate cuts. In other words: they're not convinced inflation is under control, and they don't want to be caught cutting rates too soon.

The Word Powell Didn't Say: Stagflation

A term he never said, but one that loomed over the entire meeting.

The Fed's own projections showed a painful trifecta:

• Growth slowing sharply
  
• Unemployment rising
  
• Inflation is ticking back up
  

This is the textbook definition of stagflation-an economy that's no longer growing, yet prices keep rising.

We're not there yet, but the direction of the data is raising alarms.

Even without using the word, Powell and the Fed are signaling that we may be entering a similar environment, where central banks are caught between fighting inflation and avoiding a recession, without the tools to fix both at once.

Two Cuts Still on the Table?

Despite the caution, the Fed still projects two rate cuts in 2025. But Powell made it clear that those cuts aren't guaranteed. The decision will depend heavily on upcoming data.

The WSJ reports that some Fed officials are already acknowledging that high rates are beginning to bite into economic activity. We're seeing slowing job growth, softer consumer spending, and more strain on households carrying credit card and mortgage debt.

So, where does that leave investors?

Gold and Silver: The Steady Hand in an Uncertain Market

When interest rates are this high for this long, and when inflation still won't quit, it's usually a sign that we're entering unfamiliar economic territory.

That's exactly the kind of environment where gold and silver have historically outperformed.

• If the Fed holds rates too long, it could tip the economy into a deeper slowdown.
  
• If the Fed cuts too early, inflation could reaccelerate.
  
• Either scenario feeds the case for tangible assets that don't rely on central banks or political promises.
  

Gold is up 40% over the last year, and silver is riding strong tailwinds from both investor demand and industrial use. If rate cuts come later this year, particularly with inflation still elevated, it could set the stage for another breakout in precious metals.

Silver: A Hidden Gem with Massive Upside

Silver doesn't just benefit from inflation hedging-it also plays a critical role in industrial growth, including AI tech, solar energy, and electric vehicles.

And now, even mainstream voices are sounding the alarm on silver's potential.

In a recent interview, Robert Kiyosaki, author of Rich Dad Poor Dad, said silver is "the most undervalued hard asset" in the world right now-and predicted it could double to $70 an ounce this year. He encouraged investors to ditch "fake money" and own real, physical assets like gold and silver. 

With rising demand and constrained supply, silver may be poised for a breakout, especially if rate cuts kick in later this year.

Final Thoughts

The Fed is buying time. But time is exactly what many Americans feel they're running out of, time to protect their savings, hedge against uncertainty, and find real value in a distorted market.

At Lear Capital, we believe preparedness is power. Whether you're new to gold and silver or looking to diversify your portfolio, this period of "policy pause" may be the calm before the next storm.

To learn how you can add gold or silver to your portfolio today, call Lear Capital at 855-271-2873. Explore your options, ask questions, and consider how a hard asset strategy could serve you before the Fed makes its next move.