“Powell’s termination cannot come fast enough.”
Yesterday, while speaking at an event at the Economic Club of Chicago Powell said “We’re running very large deficits at full employment, and this is a situation that we very much need to address.”
He said that NOW?
Afterall the stupid and crazy spending he has seen, he says that NOW?
For the third time in my adult life I began to consider, “Perhaps the Fed is not as independent as to claims to be.”
AT the time I assumed it would be brief thought, but . . . I dunno
I mean . . . cutting rates just before the election and then saying this now?
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USA is GETTING RICH ON TARIFFS.
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Lol at posting these two statements and finding the first to be the sane one.
^^^^^^^^^^^ this is a spot on statement of the reality we have all witnessed ^^^^^^^^^^
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Well the other time I questioned the Fed’s independence was way back in 2019.
That is when Former NY Fed president Bill Dudley wrote an Op-Ed in Bloomberg stating that the Fed should not accommodate bad tariff decisions by Donald Trump.
- I have accused the Fed of many things, but not lack of independence.
- again and again they witness stupid decision and again and again they “accommodate” those stupid decisions by lowering interest rates and printing money to offset them.
- I dislike the fact that the Fed repeatedly “provides offsetting stimulus,” to bad policy but they do so in a non-partisan manner so . . . . they are independent.
Then Dudley wrote his piece, and I saw how at least one Fed Governor thinks and briefly questioned my view.
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The FED operates on stability just like the stock and bond markets. It’s wise to wait and see how Trump’s chatic economic policy plays out.
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In 20XX the Fed sees bad policy and decides
“It is not our job to play favorites. We will simply print money and accommodate.” -
The next year the Fed sees bad policy and decides
“It is not our job to play favorites. We will simply print money and accommodate.” -
The following year the Fed sees bad policy and decides
“It is not our job to play favorites. We will simply print money and accommodate.”
I disagree with the Fed but generally I have not questioned its independence. The Fed is often wrong, but it has been remarkably consistent in its wrongness.
Given Powell’s statement yesterday I am beginning to wonder.
You do realize, don’t you, that Trump doesn’t want the Fed to be independent either, right?
The Fed is one of those orgs on target list for him to have direct control via the Unitary Executive theory…you know this, right?
And I wonder if Trump understands that oil prices being down absent any immediate changes to production is a BAD sign, not a good sign?
Or does he know, but knows most of his supporters will not know this, and thus he is using lower prices as a political weapon?
This the guy, after all, who in his eagerness to get oil prices down last time, browbeat OPEC into increasing production to lower prices , just before the pandemic, that smacked the US domestic sector hard (and they were then devastated when the pandemic hit).
People have to get over this notion that there will ever be $2 a gallon gasoline again. The easy to get cheap oil is almost gone, and the US will NEVER be a swing producer.
Oil prices have a floor below which production actually will collapse if the price stays below that floor for too long.
PS sorry…correction…if gasoline is ever at $2 a gallon, we will be in a major recession/depression, like during the early pandemic time.
Jerome Powell is part of the liberal resistance. He should bow to Trump’s demands and cut rates because…
Wait why should the Fed cut rates?
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Well $9.2 T of federal debt is maturing this year.
That’s the big reason, I believe.
That might explain why the government wants to cut rates - who wouldn’t want to cut rates when you’re trying to refinance your house?
For the Fed, however, if cutting rates is inflationary it makes future debt more expensive. It’s cutting off your nose to spite next year’s face.
That’s a true statement (well, collapse is too strong a word) . . . but only because we lack the pipeline and refining capacity to process all the energy that would be otherwise be consumed if oil price drops below $50 or $55 a barrel.
According to Donald Trump (like all presidents):
- He should cut rates to make the economy look better while I am in office."
The Fed often cuts rates when it shouldn’t.
But as I noted above, it has been remarkably consistent in its wrongness. Wind blows, it cuts rates, wind blows it cuts rates.
I understand that.
TBH I’m more worried about deflation than inflation in the long run.
But that’s a whole other debate which I know how it will go if I start a discussion on it here because it involves debating ideas people here probably are going to just assume are not true.
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Hahah! I don’t disagree. Nor do I disagree that it’s an impossible discussion to have here.
Yes and that is the result of really really bad policy by the previous treasury sec.
She (Yellen) financed an –>INSANE<– amount of the debt on a short-term basis. It is kind of a wonky discussion, but even Robin Brooks (of the left-leaning Brookings Institution) agrees that was a bad thing for her to do, and it is a good thing that Bessent is undoing it.
What’s insane about short-term debt issuance in the 2010-2019 (and again in 2021-2022) yield curve and monetary environment? The wonky part is fine.
