{"id":41212,"date":"2018-12-03T08:23:51","date_gmt":"2018-12-03T13:23:51","guid":{"rendered":"https:\/\/olduvai.ca\/?p=41212"},"modified":"2018-12-03T08:23:51","modified_gmt":"2018-12-03T13:23:51","slug":"chairman-powell-talks-out-of-both-sides-of-his-mouth","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=41212","title":{"rendered":"Chairman Powell Talks Out of Both Sides of His Mouth"},"content":{"rendered":"
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Chairman Powell Talks Out of Both Sides of His Mouth<\/a><\/h3>\n

\"jerome<\/p>\n

In a speech on Wednesday, Federal Reserve Chairman Jerome Powell stated that he had a \u201cneutral\u201d outlook on rates. According to a CNBC article<\/a>, he was quoted:<\/p>\n

Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy \u2014 that is, neither speeding up nor slowing down growth.<\/p><\/blockquote>\n

But CNBC notes that, as recently as October, Powell\u2019s was indicating that rates were \u201ca long way from neutral.\u201d Could the change in tone simply be public relations damage control?<\/p>\n

It\u2019s important to note that rates may still be \u201clow\u201d by historical standards, but only if you include 35+ years of interest rate history. However, if you look at just this century, rates are headed towards the highest levels<\/a> since 2007 (see chart below). And keep in mind there\u2019s a good chance that we\u2019ll see one more rate hike in December, as the Fed has alluded to in their November meeting statement<\/a>.<\/p>\n

\"rates<\/p>\n

In response to Powell\u2019s \u201cneutral\u201d language, the Dow Jones jumped 617 points<\/strong>. This represents its biggest one-day gain since this March, according to CNBC<\/a>. Of course, the Dow has rebounded two other times since October 3, only to lose those gains each time.<\/p>\n

Another strange part of Powell\u2019s statement was the indication that the Fed\u2019s \u201cneutral\u201d rates were \u201cneither speeding up nor slowing down growth.\u201d His analysis is odd, because CPI inflation has been on the rise for the last several years (see red arrow):<\/p>\n

\"FRED<\/p>\n

And yet, the Dow jump and Powell\u2019s \u201cneutral rate\u201d statement oddities somehow aren\u2019t the strangest items from Wednesday\u2019s speech.<\/p>\n

Seems the Fed Want to \u201cHave It Both Ways\u201d<\/strong><\/p>\n

The Fed issued a stark warning about a potential trifecta that could impact the economy. Their warning reads<\/a>:<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Chairman Powell Talks Out of Both Sides of His Mouth In a speech on Wednesday, Federal Reserve Chairman Jerome Powell stated that he had a \u201cneutral\u201d outlook on rates. According to a CNBC article, he was quoted: Interest rates are still low by historical standards, and they remain just below the broad range of estimates […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[18769,303,431,16888,534,3650],"class_list":["post-41212","post","type-post","status-publish","format-standard","hentry","category-economics","tag-birch-gold-group","tag-fed","tag-interest-rates","tag-jerome-powell","tag-monetary-policy","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41212","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41212"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41212\/revisions"}],"predecessor-version":[{"id":41213,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41212\/revisions\/41213"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41212"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41212"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41212"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}