Powell Says Nothing In Anticlimactic Jackson Hole Speech
It could be appropriate for the Fed to begin tapering monthly asset purchases this year, Jerome Powell said, during his hotly-anticipated Jackson Hole address, delivered virtually this year due to the pandemic.
Tapering, he emphasized, doesn't necessarily carry a direct signal for the timing of the first rate hike.
Powell's remarks echoed (in some cases almost verbatim) the July Fed minutes, both in reiterating that a taper unveil is likely "this year" and in seeking to delink liftoff from the
Print, print, and print some more.
I can’t imagine that will work forever but it looks like it’s working well enough for now.
If it wasn’t working, if the public had lost faith in the currency, if inflation expectations had become too high or too embedded, the Fed would not be able to do what they are doing.
But apparently, we have not reached those thresholds yet.
I have my serious doubts that the Fed can create wealth or prosperity. I’m also inclined to believe that the actions of the Fed tend to increase wealth inequality, rather than decrease it. Said another way, the size of the pie is not increasing, nor is your portion of it.
But anyway, at least for now, the Fed will continue to sprinkle its pixie dust as it has been.
Essentially, the Fed is just feeding the system and the system is built to grow inequality. Policy is where you could address the system. That said I would not entirely write off the Fed getting “a little” creative and say… opening a USD coin crypto/checking/savings account in every citizens name allowing them to claim $2000 a month in newly minted currency. I’m not saying it’s imminent but I think some people have been chewing on the idea.
Had there been just the slightest whiff of more hawkishness than the July minutes I suspect the markets would have sold off dramatically… to me that speaks volumes about the current precarious market values … just my two cents worth…
Bit since the July minites we’ve seen econ growth weaken, inflation slow, and Delta accelerate, so why would one expect the tone to be more hawkish at Jackson than in the July minutes?
There has been so much hawkish chatter that I think the odds setup was for something underwhelming thus relief to markets.
So many typos – I can spell, honest, just not on an iPhone apparently.