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No.1 - The Rock & Hard Place Trade

Stocks Tumble as Fed Finds Itself Caught Between Rising Inflation and Slowing Growth

Notes released today from the last Fed meeting pack some punches for investors. They suggest Big Ben might raise interest rates to fight inflation, despite slower consumer spending, sluggish earnings, and a housing market that’s falling apart. What now?

CNBC Senior Economics Reporter Steve Liesman joins the guys for this conversation.

Steve shows the panel a portion of the Fed statement. It says “The Committee agreed that further policy firming might prove necessary to foster lower inflation, but in light of the increased uncertainty about the outlook for both growth and inflation, the Committee also agreed that the statement should no longer cite only the possibility of further firming.”



He explains The Fed is worried about both growth and inflation which translates into stagflation with a small “s”.

Eric Bolling sees it differently. Stagflation, he says, requires “slow to no growth”, “inflation on the rise” and “weak employment.” Eric says the economy is at full employment.

Jeff Macke adds that investors should ignore The Fed. Instead, he says listen to the companies though the earnings they report. That will tell investors all they need to know, says Jeff.

Guy Adami recommends investors consider buying Ameriprise Financial (AMP). He says play the boomers.

Steve Liesman recommends investors buy TIPS or TIP Strips (Treasury Inflation Protected Securities, or TIPS, are a special type of treasury note or bond that was created in order to offer bond investors protection from inflation)

He also recommends Large Cap Dividend Consumer Staples. He explains the dividends gives investors inflation protection and the large cap give investors international exposure.

Dylan Ratigan says the bottom line is watch the Jobs Report and the earnings reports. That’s the data, (not government numbers) that will define where the market goes over the next few months.

Questions? Comments? fastmoney@cnbc.com

Trader disclosure:

On APR 11 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Bolling Owns Gold,Silver; Strazzini Owns (WMT)