Review | 2022.06.18
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![]() /u/Mega-Lithium |
Jerome Powell, the current lawyer pretending to be an economist and chairman of the Federal Reserve strongly believes he can talk his way out of this. Powell went to Georgetown Law and has no training as an economist. He believes so strongly in his silver tongue that he uses nonsense phrases like "forward guidance", "data dependent", and "we have the tools". In December 2018, he caused a taper tantrum when he announced that the Fed would be reducing the pace of its purchases of Treasury bonds in order to reduce the amount of money fed into the economy. Bond yields rose and stocks collapsed. This was predictable and actually cathartic and necessary. Jay Powell, the lawyer, chickened out and got tweeted at fiercely by Trump and quickly reversed course. This sent a signal to Wall Street that "this guys a puss" and he will never take the punch bowl away. He never has. The 75 bps increase in the federal funds rate that was telegraphed, leaked and jawboned so much that if effectively became meaningless. This is against an 8.6% rate of inflation that a year ago he called "transitory". There is a forest fire and Jay Powell shows up with a squirt gun and his silver tongue. Paul Volcker was a giant, he was 6'7" and was educated at the London School of Economics, Harvard and Princeton. When inflation roared its ugly head in the 1980s, he did not go on TV, provide "data dependent forward guidance" or try to jawbone. He silently raised the federal funds rate to 20% and it took seven Secret Service men to carry his balls around. |
I really hope this was mods trolling WSB. Pete is on-point though. |
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