Don’t be fooled by the headlines from Jackson Hole or the quick euphoria on Wall Street. The true picture of what just happened is anything but reassuring for retirees.

If you are retired, you probably need to live off the income from your investments, particularly bonds and certificates of deposit. So what you want are higher interest rates, low inflation and a strong, independent Federal Reserve that can keep inflation low in the future.

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On Friday, you went 0 for 3.

By far the worst news was about the Fed. Chairman Jerome Powell, in his highly anticipated annual speech in Wyoming, did nothing to defend the central bank, nor his fellow governor Lisa Cook, who is currently under sustained personal attacks from the president and his underlings. Nor did he defend former governor Adriana Kugler, who suddenly “retired early” from the Fed a few weeks ago after comparable political pressure. Nor did he defend federal Bureau of Labor Statistics, whose commissioner was fired by the president a few weeks ago — are you spotting a pattern here? — for producing numbers he didn’t like.

Not only did Powell not defend the Fed, but he appeared to mollify the president and his allies by opening the door to a possible interest-rate cut next month. This is what sent the stock market booming Friday. But Powell’s comments were gratuitous — there was no economic reason to make them. The market was already anticipating rate cuts; the only reason to make them was political: to appease the White House and its allies.

It’s almost impossible to overstate how important the independence of the Federal Reserve is to retirees, and everyone else for that matter. It is the cornerstone of price stability. It was a political Fed that let inflation run amok in the 1960s and 1970s and an independent Fed, under legendary Chairman Paul Volcker, who crushed that inflation in the 1980s. For example, if you were to buy a long-term bond paying 4% a year and inflation averages 2% a year, you are ahead of the game. If inflation averages 3%, you are in trouble, and if it averages 4% or higher … well, do the math.

Donald Trump has already claimed that real inflation is effectively 0%, even though the official rate is 2.7%. And he has demanded that the Fed slash short-term interest rates by at least three percentage points, from the current 4.25% to 4.5% to around 1% or even lower. One can only imagine what the situation would look like — or will look like — if he gets his way.

But this isn’t the only worrying news for retirees.

Even while Powell was hinting at interest-rate cuts, he also explained how inflation is rising and how Trump’s arbitrary import taxes, known as tariffs, are causing it.

This isn’t me saying this — it’s Jerome Powell himself.

“Turning to inflation, higher tariffs have begun to push up prices in some categories of goods,” he said. “Estimates based on the latest available data,” he noted, indicate that prices rose 2.6% in the 12 months through July, while the so-called core inflation rate, excluding volatile food and energy prices, rose 2.9% — well above the Fed’s 2% inflation target. Goods prices, which were falling in 2024, are now rising, he added.

“The effects of tariffs on consumer prices are now clearly visible,” Powell said. “We expect those effects to accumulate over coming months, with high uncertainty about timing and amounts.”

And those higher prices “could spur a more lasting inflation dynamic,” he added. This is the feared inflation spiral last seen in the 1970s — when higher prices drove workers to demand higher wages, which in turn led to even higher prices.

In these circumstances, rational savers should logically demand more, not less, interest on their money to compensate for lending. Instead, interest rates actually fell Friday, amid growing Wall Street euphoria about the prospects of an imminent rate cut by the Fed next month. The yield, or interest rate, on 5-year U.S. Treasurys BX:TMUBMUSD05Y fell one-tenth of a percentage point to 3.76%. The 10-year Treasury yield BX:TMUBMUSD10Y fell 7 basis points — or 0.07 of a percentage point — to 4.26%. Interest rates on corporate bonds eased as well. Bond prices rose, because bonds are like seesaws: When the yield falls, the price rises.

If this move keeps going, you might want to grab those nine-month, one-year and two-year certificates of deposit sooner rather than later.

Lower interest rates are certainly not bad news for everyone. On the contrary, they’re good news for many, such as investors and borrowers. But they’re bad news for those who live on income from bonds and savings.

Right now, Wall Street thinks the Fed will cut short-term rates by a quarter of a percentage point, or 25 basis points, next month. It sees another quarter-point cut before the end of the year and another half-point cut in the first half of next year. That would take short-term rates down from today’s levels to 3.25% to 3.5% by July.

It’s too early to see if Wall Street’s initial reaction to Powell’s comments on rates will be sustained. It’s been wrong before.

Meanwhile, retirees are being offered higher inflation risk and lower inflation compensation on their investments. Not a winning combination.

But look on the bright side: If they rig the inflation figures going forward to hide rising prices, your annual Social Security cost-of-living increase will get wiped out as well.

Bright side? I was being sarcastic.

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