- Jun 19, 2014
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Founding Member
With the caveat that I don't read this forum and apologies if this has already been covered...
Powell hits Wyoming to redefine Fed’s great inflation debate
The Fed has become a political tool; exactly what it was never supposed to be.
We all know damn well that rates have to go up to tame inflation, but that would be bad for the party in power.
What's Jerome gonna say? More importantly, what's he gonna do?
Alex.
Powell hits Wyoming to redefine Fed’s great inflation debate
Federal Reserve Chair Jerome Powell, who last year reassured Americans that high inflation would likely be temporary, is expected to offer a darker message this week in the most closely watched speech of his tenure: The fight against spiking prices is far from over.
Powell’s optimistic words at the annual Jackson Hole conference in 2021 were followed by the biggest sustained surge in prices that the U.S. has seen in four decades. Since then, he has shifted gears and sharply stressed the Fed’s commitment to kill high inflation by jacking up interest rates.
But many investors think the Fed might blink before then and are already expecting the central bank to begin lowering borrowing costs later next year as a possible recession looms. That has led market rates to fall and stock prices to rise from their June depths — the exact opposite of what the central bank wants to see as it aims to slow spending and investment.
Now, as he returns to Jackson Hole in Wyoming, Powell needs to convince markets he means business when he addresses the landmark conference of economists on Friday. If he can’t, it could undermine the Fed’s effort to curb the price spikes, which have rocked the economy, dragged consumer sentiment to record lows, and damaged President Joe Biden’s approval ratings.
The Fed has become a political tool; exactly what it was never supposed to be.
We all know damn well that rates have to go up to tame inflation, but that would be bad for the party in power.
What's Jerome gonna say? More importantly, what's he gonna do?
Alex.