economy fed Markets

Jerome Powell Got Everything Right – Until Someone Asked About Monetary-Fiscal Nexus

Jerome Powell breezed through an uneventful press conference Thursday, sticking largely to familiar talking points and hitting the right note in answers to key questions. His opening statement served as a reiteration of the Fed's newfound emphasis on helping to ameliorate economic inequities, especially those associated with the pandemic. Powell expressed sympathy for the services sector and specifically mentioned African Americans, Hispanics, and women, while discussing the need to ensure that no one is left behind in the recovery. "We will not forget" those that are still jobless, he pledged. That's quite of bit of remembering to do. The US economy is nowhere near pre-pandemic levels of employment (figure below). We will, of course, get an update on the labor market Friday. Both ADP and jobless claims were disappointing this week. Predictably, Powell emphasized that the main factor for determining the timeline around a full recovery is the evolution of the virus. He implored Americans to "follow the advice of public health officials." One public policy analyst predicted US hospitals are at risk of hitting a "breaking point" by the middle of the month. If the current trajec
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4 comments on “Jerome Powell Got Everything Right – Until Someone Asked About Monetary-Fiscal Nexus

  1. Ria says:

    A few good men, the movie comes to mind, when Jack Nicholson screams about people not wanting to know the truth. If the public really understood that the government was capable of helping a great deal more, “the man” would not be happy or safe…

    • runamok says:

      I was thinking about the need to keep the myth going. He needs to play ball. The end game is starting to come into focus. But, they still have many quarters (time periods, not quarter dollars) left to play the game “kick the can.”

      Honestly, at this point, with what’s happened in the election, they might just as well synchronize with all the other CBs, go to zero, buy the paper, let the balance sheet go where it will, all the while working on the monetary reset. Then we get the MMT.

      There are a lot of cold, hungry, and homeless, people wandering around my city. At this point I just hope the Red Senate is able to come to some compromises that doesn’t hasten the slide to full-on despair and eventual pre-mature death of so many. My city and state don’t own a printing press. Something’s gonna have to give.

  2. runamok says:

    Incisive summary of the Chairman’s presser. Thank you.

  3. m.rossi.103 says:

    Risk assets to the moon without fiscal stimulus. No fiscal stimulus means much much much more financial assistance. Powell wouldn’t dream of holding back to force the politicians hands.

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