(The Epoch Times)—Former World Bank President David Malpass criticized the U.S. Federal Reserve for keeping its benchmark interest rate elevated, during a July 2 interview with CNBC.
The Fed began raising rates from near zero in 2022 in a bid to rein in inflation. They peaked at 5.5 percent in 2023. The central bank then cut rates multiple times last year, bringing them down to a range of 4.25 to 4.5 percent.
Last month, the Fed left rates unchanged for the fourth straight meeting.
“The Fed has the rates too high. And the question is when are they going to cut and find an exit strategy from what they’re doing,” Malpass said. “The Feds have created all these problems, these cycles of inflation and deflation. And I think there has to be a full remaking of their models. Trump’s trying to do that but it’s going to take time.”
In its June meeting, the Fed signaled that two rate cuts may be on schedule in 2025, with interest rates expected to finish the year at 3.9 percent. The Fed is looking at bringing down inflation to the 2 percent level and is waiting to see the impacts of tariff policies instituted by the Trump administration.
The Personal Consumption Expenditures (PCE) annual inflation rate, the Fed’s preferred gauge of inflation, was 2.3 percent in May.
After the June Fed meeting, Federal Reserve Chairman Jerome Powell said on June 18 that while inflation has eased from the high levels seen in 2022, it remains “somewhat elevated relative to our 2 percent longer-run goal.”
He said that the effects of tariffs on inflation could take some time to be visible as it makes its way through the distribution chain “to the end consumer.”
“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” Powell said.
In his interview, Malpass contrasted the U.S. and European economies and their interest rates.
In Europe, economic growth is very slow, he said, adding the situation was “practically a recession all the time.” The central bank in Europe sees this as a good thing as they do not want to overheat the economy, Malpass said.
If the U.S. economy is run in the same way, “that’s really bad for the forgotten man,” he said. “Trump ran on the idea that there’d be higher median wages and especially manufacturing jobs and you can’t do that with the rates where they are.”
The rates are “too high for that because commercial and the actual working capital loans that are needed for small business and for manufacturing aren’t there. The banks aren’t doing it because all they want to do is lend to the government,” Malpass said.
Fed Has ‘Failed’: Trump
President Donald Trump has been critical of the Federal Reserve for not lowering interest rates.
In a June 30 Truth Social post, Trump listed out interest rates set by central banks of various nations. According to the president, the Fed should have set rates between 0.25 and 1.75 percent like other nations such as Denmark, Japan, Switzerland, and Cambodia.
With a benchmark target rate between 4.25 and 4.5 percent, the United States mirrors the rates of Cameroon, Guatemala, Israel, Vietnam, and Gabon.
Trump criticized Powell and the Fed Board, stating that they “have one of the easiest, yet most prestigious, jobs in America, and they have FAILED — And continue to do so.”
“If they were doing their job properly, our Country would be saving Trillions of Dollars in Interest Cost. The Board just sits there and watches, so they are equally to blame. We should be paying 1 percent Interest, or better!” he wrote.
During a conference hosted by the European Central Bank on Tuesday, Powell said that U.S. inflation is likely to pick up later this summer, though he acknowledged that the timing and magnitude of any price increase from the duties is uncertain.
He said the Fed will keep rates on hold while it evaluates the impact of tariffs on the U.S. economy.
“As long as the economy is in solid shape, we think the prudent thing to do is to wait and see what those effects might be,” Powell said, referring to the duties Trump has imposed this year.
The Fed chair also said that without tariffs, the Fed would probably be cutting its key rate right now. The central bank went on hold after it saw how large Trump’s proposed tariffs were, Powell said, and economists began forecasting higher inflation.
Powell did not rule out a rate cut at the Fed’s next policy meeting, scheduled for July 29–30.
According to data from CME’s FedWatch tool, most interest rate traders expect the central bank to hold the rates steady at this meeting.
In a June 24 post, ING Bank said it expects the Fed to wait until the fourth quarter to lower interest rates.
The bank reasoned that the Fed may want to observe the effects of tariffs over the coming months and review inflation data from September and October before deciding on rate cuts.
The Associated Press contributed to this report.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.