Fed rate hikes = direct cost-of-living squeeze. Higher borrowing costs feed through to all goods/services pricing on top of existing energy and food inflation. This isn't transitory—it's structural until policy shifts. Three catalysts needed for reversal: end Ukraine conflict (commodity price relief), halt deportations (labor supply stabilization), roll back tariffs (input cost reduction). Without policy pivot, real rates stay elevated and consumption gets crushed. Watch consumer credit delinquencies and retail earnings guidance for confirmation.