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In my view, Jay Powell has become "a problem", though NOT because he’s a bad guy with evil intent. I do not believe that. In fact, he seems like a genuinely “nice guy”!
BUT, having said that, he IS an “egghead, an overthinking, theoretical, no action, no skin in the game, no blood-no foul, ACADEMIC.
Jerome Powell is a monetary PURIST and thus, beyond Employment and Inflation…NOTHING ELSE MATTERS!
The Consumer Cocoon…matters NOT, not until there is a recession.
The Credit Crunch and Delinquency Epidemic…matters NOT, not until there is a recession.
The DEFLATION in “real” Retail final demand…matters NOT, not until there is a recession.
The Housing Crisis…matters NOT, not until there is a recession.
The Economy, DEFLATION in the Service sector in particular…matters NOT, not until there is a recession.
Well, guess what, there IS ALREADY a RECESSION underway in ALL the above!
But it matters NOT, because the ECONOMY and the CONSUMER…matter NOT…not to eggheaded monetary purists like Jerome Powell, who FAIL when it comes to having vision, having the “stones” to be AHEAD of the curve!
Powell has MISSED EVERY “TURN” in his entire tenure as the Fed Chair, sorry, that is the SIMPLE FACT!
His Fed has been BEHIND THE MONETARY CURVE at every key turning point!
And he is MISSING it again, WAY behind the curve this time, and for just ONE reason, in his mind there are not enough LAYOFFS yet to tilt the scales towards getting to a NEUTRAL POLICY as quickly as feasible. He believes this even though there are ample signs that layoffs are EXACTLY what is coming next.
Worse yet, from the political side, the Fed actually REVISED their Labor market projections to reflect STRENGTHENING job gains over the NEXT TWO YEARS, offering a vision that includes NO MORE RATE CUTS AT ALL!
For sure, several “dots” reflected that exact projection, and Powell went so far as to SAY SO, during his press-conference (I discuss within the podcast).
And, at the end of the day, with the onerous Public and Household Debt, $55 trillion in total, INFLATION is here to stay, as “reflating” is the only way to maintain growth, which is necessary to facilitate the SERVICING of debt, now “priced” at over $1 trillion per year in Public Debt interest expense alone!
The time for academic solutions, the time for eggheads to spend hours discussing the nuances of nothingness…are far behind us.
The Fed has “lost it", and Jay Powell is “flipping off” every hardworking American, and more so, those who CAN'T FIND WORK!
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