Can Jerome Powell Convince The Markets That He Means Business?

[AlexDaGator]

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

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.

 

[FireFoley]

Well that was a surprise. Grand Master J spoke for less than 10 minutes and I thought it was the angriest I have ever seen him. Someone remarked than on a scale of 1 to 10 in terms of hawkishness, the speech was a 6. My view was that for Grand Master J it was a 20.

 

[Concrete Helmet]

I agree. While we may have some areas of inflation persist for the next year or possibly longer even food is starting to rollover. My guess is we'll see a pretty significant drop in CP(LIE)I over the next 2-3 months due to worldwide slowdown and some creative cooking at the BLS....all to which Biden will take a victory lap for.

 

[Concrete Helmet]

I thought it was the angriest I have ever seen him. Someone remarked than on a scale of 1 to 10 in terms of hawkishness, the speech was a 6. My view was that for Grand Master J it was a 20.

He's mad that he couldn't keep the inflation up until October or Nov....remember he's a Repub.

 

[Concrete Helmet]

 

[FireFoley]

Yes he is Chicago. I remember him from my time on the Exchange Floor there. I do not know that much about him but how many Jewish guys have you ever encountered that were known as "Bubba"? I rest my case.

 

[Concrete Helmet]

I do think he's spot on with fracking. We would have topped out around 6.0-6.5 inflation and already be down to about 3-4 by now....Also we wouldn't have had the Ukraine invasion and the new alliance formation between SA, Russia, China, India and so on....Don't kid yourself it will start the end of the dollar's reign....Watch the first 20 minutes of this video.....BTW listen to the population statistics of "the west" vs "the east"....staggering and then throw in the fact that the ME and Africa will also align themselves with the East.....Trust me there is a reason central banks(smart ones) have stashed gold to the hilt...

 

[Concrete Helmet]

Wow fascinating data and comments in the video between the 18-25 minute mark. Explains my position in the Russia/Ukraine thread.