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How Powell Destroyed His Inflation War as he Eats the Poor
I’m going to save discussion of today’s CPI report for my Deeper Dive this weekend because it requires digging deep into the numbers involved in the report to show why it is not the game-changer for the new trend in inflation that the stock market made it out to be today. Not even close. It could, of course, become a first blip in the direction of a new downward trend against the rising trend for inflation that has held all year, but this year’s trend, so far, remains firmly anchored.
Even Minneapolis Federal Reserve Bank President Neel Kashkari said today, after the CPI report came out,…
that he is unsure how restrictive monetary policy is right now, and that borrowing costs should stay where they are as U.S. central bankers take stock of inflation. “The biggest uncertainty in my mind is how much downward pressure is monetary policy putting on the economy? That’s an unknown,” Kashkari told the Williston Basin Petroleum Conference in Bismarck, North Dakota. “And that tells me we probably need to sit here for a while longer until we figure out where underlying inflation is headed before we jump to any conclusions.”
In fact, another article out today claims, as I’ve been claiming here, that Fed policy is not restrictive at all; and that’s the interesting point for the day I want to focus on as I think the article says it well:
Time and again, Jerome Powell has made it clear. Financial conditions, the Federal Reserve’s key lever for cooling the US economy, are tight.
HOWEVER …
After an $11 trillion rally in US equities since late October — and the sudden revival of meme-stock fever — many on Wall Street think he’s dead wrong…
…click on the above link to read the rest of the article…
Inflation is Transitory Again
Inflation is Transitory Again
Because it has to be in order to fund Bidenomics.
As Powell clasps his hands in desperate hope without any evidence to back his hope, the US Treasurer today, like the Treasurer in yesteryear, is giving a solid thumbs-up to his plan, which is already accomplishing everything the Treasury desperately needed.
After yesterday’s low “jobless claims” report that held unemployment steady and that looked rigged to hit a targeted goal (again), today delivered a “new jobs” report that came in (at 175,000 new jobs), well below expectations of 240,000. By that report, the unemployment rate ticked higher from 3.8% to 3.9%.
As I commented yesterday, we may be nearing the point where all the layoffs this year and last year are bringing jobs down enough to where they will finally start to come in line with available workers. Once that threshold is met, unemployment can rise when and if layoffs are higher than normal. We’ll have to see if this minute rise becomes a trend, though, since the numbers pulled a head fake to his level in February, too, then dipped back down in March to the familiar 3.8 level they had hovered along in August, September and October of last year.
As usual, the slightest hint of a softening labor market caused stock and bond investors to back markets down from the recent financial tightening investors had brought back to the marketplace. Brains smoked in the fumes of hopium and fueled with pure testosterone bid stocks and bonds and rate cuts hopes all back up again today in response to this slight hint that the Fed’s jobless gauge may finally allow it to cut rates. Same pipe dream from the same glass-pipe smokers. Powell’s limp comments about fighting inflation this week had already given lift back to falling markets.
…click on the above link to read the rest of the article…
