{"id":45937,"date":"2019-05-05T06:07:42","date_gmt":"2019-05-05T11:07:42","guid":{"rendered":"https:\/\/olduvai.ca\/?p=45937"},"modified":"2019-05-05T06:07:46","modified_gmt":"2019-05-05T11:07:46","slug":"weekly-commentary-transitory-histrionics","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=45937","title":{"rendered":"Weekly Commentary: Transitory Histrionics"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"http:\/\/creditbubblebulletin.blogspot.com\/2019\/05\/weekly-commentary-transitory-histrionics.html\">Weekly Commentary: Transitory Histrionics<\/a><\/h3>\n\n\n\n<p>May 3 \u2013 Financial Times (Sam Fleming): \u201cHaving lamented low inflation as one of the great challenges facing central bankers today in March, Jay Powell on Wednesday wrongfooted many investors with comments that seemed to play down the gravity of the problem. The new message from the Federal Reserve chairman \u2014 that \u2018transitory\u2019 drags may be slowing price growth, rather than more persistent problems \u2014 marked a rude awakening for investors who had been hoping that he would signal an \u2018insurance\u2019 interest rate cut this summer because of low inflation. To critics, Mr Powell\u2019s sharp change in tone extends a pattern of unpredictable communications that have made Fed policy more difficult to read. While many accept that investors got ahead of themselves in treating a 2019 rate cut as a fait accompli, the risk is that in his effort to dial back expectations of easier policy Mr Powell undercut the central bank\u2019s broader message: that it will do whatever is necessary to get stubbornly low inflation back on target.\u201d<\/p>\n\n\n\n<p>To many, Chairman Powell\u2019s Wednesday news conference was one more bungled performance. It may not have been at the same level as December\u2019s \u201ctone deaf\u201d \u201cincompetence.\u201d But his message on inflation was muddled and clumsily inconsistent. How on earth can Powell refer to below-target inflation as \u201cTransitory\u201d?<\/p>\n\n\n\n<p>Chairman Powell should be applauded. Sure, he \u201ccaved\u201d in January. And while he can be faulted (along with about everyone) for not appreciating the degree of market fragility back in December, markets had over years grown way too comfortable with the Fed \u201cput\u201d\/backstop.&nbsp;&nbsp;<\/p>\n\n\n\n<p>I don\u2019t fault the Powell Fed for having attempted in December to let the markets begin standing on their own. It was about time \u2013 actually, way overdue. Fault instead unsound markets and decades of \u201cactivist\u201d Fed policymaking. <\/p>\n\n\n\n<p>\u00a0\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Weekly Commentary: Transitory Histrionics May 3 \u2013 Financial Times (Sam Fleming): \u201cHaving lamented low inflation as one of the great challenges facing central bankers today in March, Jay Powell on Wednesday wrongfooted many investors with comments that seemed to play down the gravity of the problem. The new message from the Federal Reserve chairman \u2014 [&hellip;]<\/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":[124,7756,16861,3650],"class_list":["post-45937","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-credit-bubble-bulletin","tag-doug-noland","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45937","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=45937"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45937\/revisions"}],"predecessor-version":[{"id":45938,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45937\/revisions\/45938"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=45937"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=45937"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=45937"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}