A senior macroeconomist from Arkomina Research, Marko Bjegovic, stated that the Federal Reserve's decision to keep interest rates unchanged during its latest monetary policy meeting represents a significant policy error. He argues that by not initiating rate cuts amid rising unemployment, the central bank has missed a critical window for easing monetary policy. In a social media analysis, Bjegovic outlined his concerns regarding the Fed's choice to maintain current interest rates despite increasing signs of economic weakness in both the U.S. and global economies.
Marko Bjegovic, who has over 17 years of financial market trading experience and previously held roles as a stockbroker, investment advisor, head of equity trading, and chief macroeconomist at a bank, is known for his accurate forecasting of core economic indicators such as CPI and PCE. His predictions have consistently outperformed Wall Street consensus estimates, and he has frequently presented contrarian bearish views that later proved correct, earning him a dedicated following.
In the latest monetary policy announcement, the Federal Reserve, as widely expected, paused rate hikes for the second consecutive meeting. The policy statement included new language noting uncertainty regarding the impact of Middle East geopolitical tensions on the U.S. economy. The unemployment rate description was revised from "showing some signs of stabilization" to "remaining largely unchanged." The updated interest rate dot plot indicated that policymakers' rate expectations remained largely consistent with the December projections, forecasting only one 25-basis-point rate cut in 2026 and another in the following year.
Meanwhile, the Fed raised its year-end PCE inflation forecast from 2.4% to 2.7% and core PCE from 2.5% to 2.7%. Some officials even reintroduced the possibility of future rate hikes amid rising oil price pressures.
Federal Reserve Chair Jerome Powell emphasized during the post-meeting press conference that the central bank is unlikely to resume rate cuts until inflation shows clear signs of resuming its downward trend. He noted that it is too early to assess the inflationary impact of the Middle East conflict, despite financial markets already pricing in higher inflation expectations for the coming year. Powell stressed that price pressures have persisted longer than anticipated even before the recent geopolitical tensions, underscoring the importance of seeing further progress on inflation before considering monetary easing.
Bjegovic contends that the Fed's decision to hold rates steady is a policy mistake, as the Consumer Price Index has already neared the central bank's 2% long-term target. He argues that CPI is currently a more appropriate measure than the core PCE index favored by the Fed. The economist's policy framework diverges significantly from mainstream market expectations, prioritizing labor market deterioration and excessively tight real interest rates over inflation risks.
According to Bjegovic's research, the U.S. economy has been losing genuine employment positions monthly. His exclusive calculations, adjusted for declining labor force participation, show the unemployment rate rising from 4.2% in April 2025 to 5.4% in February 2026—an increase of 1.2 percentage points. During this period, the Fed reduced benchmark rates by only 75 basis points to 3.6%, which Bjegovic describes as "remaining significantly restrictive."
With recent nonfarm payroll growth turning negative and unemployment rising sharply, Bjegovic warns that the economy may already be in a substantive recession. He cautions that the Fed's continued focus on long-term price stickiness risks, combined with war-induced energy price surges complicating global central bank outlooks, could further deteriorate labor market conditions.
Notably, some strategists on social media have cited Citrini Research's recent "2028 AI Doomsday Prediction" to support Bjegovic's stance. This report envisions a dystopian AI future where unexpectedly surging AI productivity leads to widespread white-collar job displacement, triggering a "global economic plague" that could panic financial markets. Citrini's proposed mechanism suggests AI agents replacing white-collar positions, reducing wages and consumer spending power, and ultimately creating "Ghost GDP"—a scenario where productivity appears strong but monetary circulation weakens. This dystopian dynamic could erode consumer-driven economies, triggering negative feedback loops for risk assets like stocks, pushing unemployment into double digits, and causing significant global equity market corrections.
Bjegovic describes the Fed's current inaction as the latest in a series of policy mistakes, referencing the central bank's maintenance of excessively accommodative policies in 2020-2021 followed by aggressive rate hikes in 2022-2023. The "transitory inflation" narrative during that period significantly damaged the Fed's credibility, he argues.
Overall, Bjegovic's assessment represents a dovish, contrarian minority view that the true policy error lies in insufficiently rapid response to economic growth and employment risks. In contrast, mainstream Wall Street institutions and Fed officials consider premature rate cuts more dangerous given five consecutive years of above-target inflation, renewed Middle East conflict, and substantial oil price escalation risks.
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