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What To Expect From The March FOMC Meeting
I wouldn't want to be Jerome Powell right now. Or any other time either for that matter, although Jay's doubtlessly lived a (far) more fulfilling life than I have.
Powell's tenure at the helm of one of the world's most important institutions has been an almost comically fraught affair bedeviled by a once-in-a-generation public health crisis, a generational inflation shock and a US president with Erdogan-esque designs on monetary policy.
Alas, there's no rest for the weary and Powell's task in
If you read this as soon as it was published, there was a typo: The third-to-last paragraph said “bull steepener,” when it should’ve read “bull flattener.”
Unfortunate for Powell’s legacy. With shelter inflation now finally rolling over, in an alternate universe he would be headed toward target inflation, normalized Fed balance sheet, and a slowing but probably not alarming economy. Now . . .
Shelter disinflation may still help for a year, since it seems so lagged, but less so for PCE and I suspect housing prices are stickier downward than upward.
I’ve seen blurbs that tariffs will only have very modest effects on inflation or growth, but that doesn’t fit my gut and I wonder if they account for knock-on effects – like a bear market – or add-ons – like federal government self-disassembly.
Sad for the only decent man left in high office.
“I’ve seen blurbs that tariffs will only have very modest effects on inflation…”
A flaw in their reasoning is to assume that ONLY the price of imported goods will reflect the added tariff taxes. So they just look at the value of those imports in isolation.
Your instinct when you added that “but that doesn’t fit my gut” perhaps is because your realize that the tariffs taxes will raise the prices for ALL goods in the impacted sector. It’s gonna be bonanza time for corporate America given this opportunity to raise prices to almost match the import levies and pass through the added profit to shareholders and the executives through stepped up share buybacks.
clarity = investable; no clarity = not investable … with that said, some chaos theory thinkers find order and clarity in chaos – investable. In US, chaos is not the theme; whim and vengeance rule. I find that soup un-investable and while a WAY smaller numbers than BRK, T-bills rule my portfolio. Until Powell can push 3m below 4%, or the US embraces at least chaos, …