Outlook Favorable
New York Fed president John Williams says baseline forecasts are positive despite a mixed picture from trade and geopolitical tensions.
The “Outlook Very Favorable” says Williams.
“Right now, the outlook is actually very favorable,” Williams said during a talk at the University of California, San Diego. He said GDP growth is around 2% rate, with a “very strong” labor market and inflation near a 2% rate.
Curiouser and Curiouser
Williams noted that “economists are notoriously bad at predicting recessions”. So how does he know that conditions are favorable?
Nonetheless, things are so favorable that Williams made this curious statement “I think there are definitely a lot of uncertainties and risks out there that we need to be navigating.”
Other Curiously Favorable Statements
- “The Fed is grappling with the how to model trade uncertainty.”
- “We don’t have as much experience with this”.
- “And sentiment seems to change from one week to another.”
We Have Tools
Not to worry, the Fed has the Tools to Fight a Recession and Can Use Them ‘More Quickly’ Next Time
- New York Fed President John Williams said he’s confident the central bank has the right tools to fight the next economic downturn.
- He cited forward guidance and quantitative easing as the Fed has limited room to cut rates.
- Williams also said worries about the negative consequences from using QE and low rates didn’t materialize.
Curiouser and Curiouser and Curiouser
The Fed has the tools, and will use them quicker.
And Williams is confident about having the right tools, even though he is worried about using them.
The main tool appears to be forward guidance. The Fed will tell us what it will do even though it may have negative consequences.
This all makes perfect sense somewhere down the rabbit hole.
Mike “Mish” Shedlock
The lower interest rates go, the more people feel they need to save because they are getting no return on their savings, hence they spend and borrow less. Because of this it seems to me lowering rates have exactly the opposite of the intended effect.
Are these guy for real? It is like a Monty python skit.
Claiming to have tools is one of the FED tools.
The Fed has one tool: buy bank generated bad debt at par to keep the whole house of cards from periodically collapsing. This has two very positive results: bankers can keep getting rich from generating bad debt, and the millions of Americans thrown out of work won’t grab their torches and pitchforks and head for DC.
“The whole time Williams was talking, I kept picturing that old man in Wizard of Oz, scrambling to pull levers and trigger special effects to make the Wizard hologram appear powerful and menacing…. while that ferocious little dog pulls back the curtain and makes it obvious ‘the wizard’ is just special effects.”
Good observation. I actually have an image somewhere of Williams in a wizard suit.
Not sure if I can find it.
I always loved the Wizard of OzT. Put on your silver slippers (ruby slippers in the movie, silver in the book by L. Frank Baum) and follow the yellow brick road. The wizard lives in emerald city (scroll all the way down in the link below to see our hero on the emerald version of The Liberal rag “The Atlantic):
link to economati.blogspot.com
When Dorothy stands before the wizard the wizard asks Dorothy if she “liquidated” the wicked witch of the west (that’s when I knew for sure what they were talking about – fake money in the form of fiat currency and fictional reserve banking).
In the end Dorothy told us how the Wizard of OzT is finally defeated. She goes in demanding the recompense for doing the wizard’ bidding and the wizard tells her to come back later. But instead of being shoo’d away she makes the big, eye opening observation which is the key to everything. She says, “if you were really great and powerful, you’d keep your promises”.
And that is the beginning of the end the wizard of fed. Just like every other con man, they have made promises that they can’t keep. It’s as simple as that. Stupid liberals count on those promises; they believe in them like it was religion. And so when then finally see that the fed is nothing but a lying con man, they feel used (because they were). They rebel and demand free stuff from anyone who will listen and then cry the blues when the consequences of all these liberal policies come home to roost.
And Hell hath no fury like a liberal scorned. They will tear the place down in their anger over not being able to receive more free stuff. And the real reason isn’t the loss of the free stuff but rather the realization that everyone they laughed and mocked at who had conservative ideals were right the whole damned time. When the liberals take up rioting it will mainly be because their pride got hurt by believing in fairy tales told by the wizards of OzT.
The whole time Williams was talking, I kept picturing that old man in Wizard of Oz, scrambling to pull levers and trigger special effects to make the Wizard hologram appear powerful and menacing…. while that “ferocious” little dog pulls back the curtain and makes it obvious ‘the wizard’ is just special effects.
Yes, indeed, they are incompetent stooges, not powerful moneyprinters hellbent on debasing the dollar. They seem mainly concerned with preserving their jobs more than anything else
Their only tool is to print money and produce bubbles to replace the bubbles that popped. Always has been.
Dear John,
It’s next time. Avoid verbosity. “Whatever it takes” is the phrase you’re searching for. You’re welcome.
Thousands of zombie corporations and a whole generation of brilliant stock pickers are are relying on you just now.
The Fed’s “tools” consist of a box full of hammers.
More like crowbars:
The “tools” “work” solely by robbing productive people; for the benefit of the well connected leeches whose economic well being, is the only thing the Fed’s “measures,” are even pretending to “measure.”
And, like crowbars in the hands of pure thieves: The “tools” only work as long as there are anyone productive with anything left to steal.
Or a box full of crap.