America’s farmers are flashing warning signals about inflation, and the Fed is paying attention. Protect yourself now

Moe ZulfiqarSun, October 25, 2026 at 11:45 AM UTC

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For anybody worried about inflation in 2026, the next big warning might not come from Wall Street or Washington. It could be coming from America’s farms, and the Federal Reserve is listening.

Austan Goolsbee, president and CEO of the Federal Reserve Bank of Chicago, recently traveled to rural Illinois to gather what one farmer called a “boots-on-the-ground” perspective. The trip was featured (1) in a Bloomberg Television report on Oct. 17.

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What Goolsbee heard wasn’t good news.

One farmer featured in the report was Troy Uphoff, whose family has been farming in the Federal Reserve’s 7th District since 1842. When Bloomberg’s Michael McKee asked whether farmers have had a rough two years, Uphoff answered, “Absolutely.”

He said crop prices have been lower, mainly because of tariffs. At the same time, the cost of running a farm keeps going up.

“Diesel fuel right now is roughly 80% higher than it was one year ago,” Uphoff said.

He added that seed and fertilizer prices have also climbed. In Uphoff’s view, costs have increased faster than crop prices, leaving many growers with little profit over the past two years.

Why the Fed is worried

During the Bloomberg report, Goolsbee said talking to people on the ground can help identify trends before they show up in the data. He said the message he heard across many industries was “nothing about demand drying up, all about cost pressures.”

He pointed to the cost of shipping, fertilizer and diesel as examples.

Goolsbee called this problem “the nightmare of the central bank,” explaining that when the economy faces stagflationary shocks, there’s no “obvious playbook.”

Economists use the term stagflation when prices rise while the economy slows down and unemployment climbs.

Goolsbee also warned that recent shocks, from COVID-19-era supply issues to tariffs and higher oil prices, have lasted longer than expected. Inflation in the U.S. has been above the Fed’s 2% target for more than five years, he noted.

“I do think even though the Fed can’t pump oil, it can’t ignore permanent inflation shocks that threaten to drive inflation above the target,” he said.

In September, the Consumer Price Index (2) (CPI), a key measure of inflation, rose 3.7% over the last 12 months, according to the U.S. Bureau of Labor Statistics (BLS). That was up from 3.4% in August.

The Fed has already started making moves to try to get inflation back to 2%, announcing in a Sept. 16 statement (3) that it was raising its benchmark interest rate by a quarter of a percentage point to between 3.75% and 4.00%. It was the first hike since mid-2023.

The reason? “Inflation remains elevated,” said the statement.

And it might not be the last move the Fed makes in 2026. The Federal Open Market Committee, which is responsible for adjusting interest rates, is set to meet twice before the end of the year: on Oct. 27-28 and Dec. 8-9.

Whether they plan to adjust interest rates again remains to be seen. However, according to the CME Group’s FedWatch tool (4), which tracks probabilities of a rate change by looking at 30-Day Federal Funds futures prices, the market expects the Fed to keep rates unchanged at its October meeting — but raise them by another quarter of a percentage point in December.

That would take the benchmark rate to a range of 4.00% to 4.25%.

Read More: Vanguard reveals what's coming for U.S. stocks — and it could be bad news for this group of investors

What this could mean for your wealth

American farmers may be feeling the worst of it for now, but that could change. Higher diesel and gasoline prices don’t just hit businesses, they hit household budgets.

In the latest inflation report, for instance, the BLS said gasoline, which rose by 9.1% in September, accounted for more than half of the month’s rise in consumer prices.

Meanwhile, the Bloomberg report noted that rising interest rates could make borrowing more expensive for farmers already dealing with higher costs. The same could be true for households.

In short, the combination of rising inflation and higher interest rates could result in households facing a “double whammy” of cost-of-living increases.

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Golden inflation shield

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In the current investing environment, the appeal of gold hasn’t been lost on experts.

Ray Dalio, founder of Bridgewater Associates, one of the world’s largest hedge funds, suggests investors should allocate as much as 15% of their portfolio (5) in gold.

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Going beyond the stock market

When inflation and interest rates rise together, stocks and bonds tend to become volatile. This is why it might be a smart idea to diversify your portfolio by investing in alternative assets.

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See how Willow can put your money to work across a wider range of assets.

Low-cost investing without the guesswork

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

YouTube (1); Bureau of Labor Statistics (2); U.S. Federal Reserve (3); CME Group (4); CNBC (5); Willow Wealth (6)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Original Article on Source

Source: “AOL Money”