Powell Disappoints the Bulls
Powell maintains hawkishness … economic data feel off … how healthy is the U.S. consumer for real? If this was a superhero movie, we’d be at the part where Federal Reserve Chairman Jerome Powell sheds his suit and tie to reveal his true identity… Hawkman! Speaking this morning at the annual central bank symposium in Jackson Hole, Wyoming, Powell let air out of the idea that the Fed was on the verge of a dovish pivot. He pledged that the central bank will “use our tools forcefully” to attack inflation that will likely persist “for some time.” He also spoke directly to the collateral damage of this focus on inflation: While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain. Wall Street has been in celebration mode based on the belief that we’ve beaten inflation, which means the Fed will let off the gas.
Powell Disappoints the Bulls
Powell maintains hawkishness … economic data feel off … how healthy is the U.S. consumer for real? If this was a superhero movie, we’d be at the part where Federal Reserve Chairman Jerome Powell sheds his suit and tie to reveal his true identity… Hawkman! Speaking this morning at the annual central bank symposium in Jackson Hole, Wyoming, Powell let air out of the idea that the Fed was on the verge of a dovish pivot. He pledged that the central bank will “use our tools forcefully” to attack inflation that will likely persist “for some time.” He also spoke directly to the collateral damage of this focus on inflation: While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain. Wall Street has been in celebration mode based on the belief that we’ve beaten inflation, which means the Fed will let off the gas.