Powell Snipes at Trump
Image courtesy of Hedgeye
Inquiring minds are tuning into a Powell Speech in which he chastises Trump and praises himself for a job well done.
In a blast pointed directly at Trump, Powell proclaimed “The Fed is insulated from short-term political pressures—what is often referred to as our ‘independence.”“
Self-Praise for Listening
At the heart of the review are our Fed Listens events, which include town hall–style meetings in all 12 Federal Reserve Districts. These meetings bring together people with wide-ranging perspectives, interests, and expertise. We also want to benefit from the insights of leading economic researchers.
We have been listening. What have we heard? Scholars at the Chicago event offered a range of views on how well our monetary policy tools have effectively promoted our dual mandate. We learned more about cutting-edge ways to measure job market conditions. We heard the latest perspectives on what financial and trade links with the rest of the world mean for the conduct of monetary policy. We heard scholarly views on the interplay between monetary policy and financial stability. And we heard a review of the clarity and the efficacy of our communications.
In Praise of Fundamentals
Solid fundamentals are supporting continued growth and strong job creation, keeping the unemployment rate near historic lows. Although inflation has been running somewhat below our symmetric 2 percent objective, we have expected it to pick up, supported by solid growth and a strong job market. Along with this favorable picture, we have been mindful of some ongoing crosscurrents, including trade developments and concerns about global growth. When the FOMC met at the start of May, tentative evidence suggested these crosscurrents were moderating, and we saw no strong case for adjusting our policy rate.
Trickle Down Theory Returns
Like many others at the conference, I was particularly struck by two panels that included people who work every day in low- and middle-income communities. What we heard, loud and clear, was that today’s tight labor markets mean that the benefits of this long recovery are now reaching these communities to a degree that has not been felt for many years.
Hallelujah!
What a sappy, self-congratulatory speech.
Hallelujah! Trickle down has arrived just in the nick-of-time for the next recession.
Trump’s response will likely provide more amusement.
Hello Jerome Powell – We Still Have Questions
Dear Jerome Powell, instead of patting yourself on the back and answering fluff prepared questions, how about addressing mine?
- Let’s discuss the Fed’s economic models and their miserable performance.
- Let’s discuss bubbles.
- Let’s also debate the Fed’s inflation expectation theory. I can logically prove that it is nonsense.
Answers Please
Hello Jerome Powell, We Have Questions
Please have a go at it, Mr. Powell.
Mike “Mish” Shedlock
For one, the term trickle down is a socialist lie. Policies designed to create investment in the economy are trickle up, as hard money goes into the pockets of workers from those that have it.
Second, the 10 year rate was already moving down when the Fed raised the rate in the fall. Instead of taking note, the jackasses did it again. Monetary idiots walked in the door 30 years ago and the nuttiness peaked when Bernanke came in. The central banks built this trap, not Trump, by pouring cash into banks to try to prove themselves right. They had to keep them there, because policies by the socialists running the governments, produced crappy results.
All they did was seed the next disaster. One of these days, they are going to have to write down all this crap.
We are approaching a crossroads come 2020. 2020 very well could be a historical election depending on what the economy and debt markets do. A crisis is coming but so far no one is addressing it.
Economy that flatined a decade ago,today after hundreds of trillions printed it stills barely has a pulse, Powell needs to ask himself…..Is there a planB?Can big gov’t get through the year without NIRP and massive new rounds of fresh money printing?
“Economy that flatined a decade ago, today” BECAUSE OF “hundreds of trillions printed it stills barely has a pulse,”
The more you rob productive people, by debasement or otherwise, in order to hand the loot to FIRE idiots, “asset owners” and other leeches, the less production you are going too end up with. It’s no different from siphoning gas from your car, so some privileged, look-at-me dimwit can brag about how much bigger the policy of doing so, has made the bonfire in front of his McMansion.
The NYT wrote a story about this brouhaha. The reader comments are worth scanning through.
https://www.nytimes.com/2019/06/25/business/economy/jerome-powell-speech-fed.html
So far, the new and open communication policy amounted to a daily drip which only seem to have the goal of finishing us, who follow this daily, by adrenaline rush, and heart attack. After that, the peasants could be ruled more easily. At least, they learned how to measure the 2.0001% inflation target.
If the big ‘uncertainty’ for economic growth is the trade war, how will lower rates cure what ails? Likewise, if the orange one wakes up in a good mood and actually signs off on a deal with China, does that mean we are back to rate hikes (hopefully)?
Labor participation rates remain low based on historical standards. Which is one reason that there continues to be almost no upward pressure on wage rates.
Americans want jobs that pay enough to support a family. They want jobs that pay enough that they can save for a rainy day. They want a level of security in their job so that they make solid plans for their family’s future. They want a chance to retire comfortably some day. They want to know that a significant illness isn’t going to ruin their life plan.
This economy isn’t providing this for a large enough percentage of the population. Hence Trump. The federal reserve doesn’t have the ability to make this happen. American capitalism is failing, and the federal reserve can’t save it. If Republicans and conservative democrats (Biden) can’t fix this, we’re going to get Bernie/AOC. And it will be our fault.
I don’t see it. One is what they want and one is what is. The reason participation rates are lower is because of multiple reasons. Globalization and automation of labor continue to be firmly long term trends that affect developed economies more than developing economies.
I focused on the “…want jobs…” refrain. And that seemed to imply that labor participation rates would be high, not low. Assuming nothing stops people who “want jobs” from getting jobs.
BTW, note that@JonSellers nice list is always true, in good times or bad.
Wonder if the Jews used to sit around in camps talking about how nazism was “our fault…..”
Politically, there are no “we.” Hence no “our.” You and some dude robbing you at gunpoint, aren’t “we.” Rebranding, progressive newspeak style, the robbery as “taxes,” or “monetary policy,” doesn’t magically change that in the slightest.
At best, what is “our” fault, is being too cowardly to arm up sufficiently to have an effective, constitutionally supposedly guaranteed, veto on the robbery. Rather than simply bending over pliantly while asking “how much lube, massa?”
Jobs are available but people don’t want them. Not because of the pay but because of the requirements to actually show up and work!
Also the perverse incentives set up allow people to have food, health care, housing and cheap entertainment (streaming, games) without work. We’ve had people quit because they would make too much and lose free stuff from the government. That’s crazy!
FINALLY – Yes, just in the nick of time, too
Tight labor markets in lower and middle class communities?
Sure, if you’re trying to compete for your 3rd 10hr/week job…hoping your managers can juggle that schedule!
All praise the 10 year time-line that a microeconomic short term cure, bastardized into a macroeconomic policy FINALLY helps the people it was intended to….or so says Powell.