When Chairman Powell says things are really, really going to suck as monetary policy tries to support Biden’s goals to reduce energy supplies, will people believe him?
The agenda of the federal reserve was clearly outlined today in the remarks from Chairman Powell in Jackson Hole, Wyoming. The Fed chair is trying to manage the economic policy transition by reducing economic activity to match intentionally diminished energy supplies. Lowering economic activity drops demand for energy. Unfortunately, as admitted by Powell today, this means a period of “some pain” for Americans as the central banks join together in an effort to lower consumption. WATCH:
What does “some pain” mean? It means lower incomes, higher prices, lowered standards of living and more scarce resources. During this transition to owning nothing and being happy about it, the pain is your wealth being stripped as the economy is intentionally diminished.
We will not be able to afford much; we won’t be able to afford the foods we want; we will not be able to purchase anything except the essentials, and those essentials will cost much more; we won’t be able to vacation, travel, or enjoy recreational activities; we won’t be able to afford any indulgences; but at the end of the process, we will learn to live more meager existences based on lowered expectations needed for sustaining the planet. Pay no attention to the elites who don’t have those concerns, comrade.
[Transcript] – POWELL: “At past Jackson Hole conferences, I have discussed broad topics such as the ever-changing structure of the economy and the challenges of conducting monetary policy under high uncertainty. Today, my remarks will be shorter, my focus narrower, and my message more direct.”
“The Federal Open Market Committee’s (FOMC) overarching focus right now is to bring inflation back down to our 2 percent goal. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them.
Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.
The U.S. economy is clearly slowing from the historically high growth rates of 2021, which reflected the reopening of the economy following the pandemic recession. While the latest economic data have been mixed, in my view our economy continues to show strong underlying momentum. The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers. Inflation is running well above 2 percent, and high inflation has continued to spread through the economy. While the lower inflation readings for July are welcome, a single month’s improvement falls far short of what the Committee will need to see before we are confident that inflation is moving down.
We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2 percent. At our most recent meeting in July, the FOMC raised the target range for the federal funds rate to 2.25 to 2.5 percent, which is in the Summary of Economic Projection’s (SEP) range of estimates of where the federal funds rate is projected to settle in the longer run. In current circumstances, with inflation running far above 2 percent and the labor market extremely tight, estimates of longer-run neutral are not a place to stop or pause.
July’s increase in the target range was the second 75 basis point increase in as many meetings, and I said then that another unusually large increase could be appropriate at our next meeting. We are now about halfway through the intermeeting period. Our decision at the September meeting will depend on the totality of the incoming data and the evolving outlook. At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases.
Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy. Committee participants’ most recent individual projections from the June SEP showed the median federal funds rate running slightly below 4 percent through the end of 2023. Participants will update their projections at the September meeting.
Our monetary policy deliberations and decisions build on what we have learned about inflation dynamics both from the high and volatile inflation of the 1970s and 1980s, and from the low and stable inflation of the past quarter-century. In particular, we are drawing on three important lessons.
The first lesson is that central banks can and should take responsibility for delivering low and stable inflation. It may seem strange now that central bankers and others once needed convincing on these two fronts, but as former Chairman Ben Bernanke has shown, both propositions were widely questioned during the Great Inflation period.1 Today, we regard these questions as settled. Our responsibility to deliver price stability is unconditional. It is true that the current high inflation is a global phenomenon, and that many economies around the world face inflation as high or higher than seen here in the United States.
It is also true, in my view, that the current high inflation in the United States is the product of strong demand and constrained supply, and that the Fed’s tools work principally on aggregate demand. None of this diminishes the Federal Reserve’s responsibility to carry out our assigned task of achieving price stability. There is clearly a job to do in moderating demand to better align with supply. We are committed to doing that job.
The second lesson is that the public’s expectations about future inflation can play an important role in setting the path of inflation over time. Today, by many measures, longer-term inflation expectations appear to remain well anchored. That is broadly true of surveys of households, businesses, and forecasters, and of market-based measures as well. But that is not grounds for complacency, with inflation having run well above our goal for some time.
If the public expects that inflation will remain low and stable over time, then, absent major shocks, it likely will. Unfortunately, the same is true of expectations of high and volatile inflation. During the 1970s, as inflation climbed, the anticipation of high inflation became entrenched in the economic decisionmaking of households and businesses. The more inflation rose, the more people came to expect it to remain high, and they built that belief into wage and pricing decisions. As former Chairman Paul Volcker put it at the height of the Great Inflation in 1979, “Inflation feeds in part on itself, so part of the job of returning to a more stable and more productive economy must be to break the grip of inflationary expectations.”2
One useful insight into how actual inflation may affect expectations about its future path is based in the concept of “rational inattention.”3 When inflation is persistently high, households and businesses must pay close attention and incorporate inflation into their economic decisions. When inflation is low and stable, they are freer to focus their attention elsewhere. Former Chairman Alan Greenspan put it this way: “For all practical purposes, price stability means that expected changes in the average price level are small enough and gradual enough that they do not materially enter business and household financial decisions.”4
Of course, inflation has just about everyone’s attention right now, which highlights a particular risk today: The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched.
That brings me to the third lesson, which is that we must keep at it until the job is done. History shows that the employment costs of bringing down inflation are likely to increase with delay, as high inflation becomes more entrenched in wage and price setting. The successful Volcker disinflation in the early 1980s followed multiple failed attempts to lower inflation over the previous 15 years. A lengthy period of very restrictive monetary policy was ultimately needed to stem the high inflation and start the process of getting inflation down to the low and stable levels that were the norm until the spring of last year. Our aim is to avoid that outcome by acting with resolve now.
These lessons are guiding us as we use our tools to bring inflation down. We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored. We will keep at it until we are confident the job is done.” [Transcript End]
Jackson Hole? Playground of the rich and infamous, what an obtuse clown.
Playground of Billionaires, not millionaires.
With their mega log cabins that used to be always featured in Architectural Digest; artificially-rusticated varnished log walls and balustrades, ubiquitous cow skull on wall and Indian blanket over balcony rail… ugh!!!
Never. The Fed is a privately owned corporation that looks after their own. Please. Do you think it’s honest to say inflation is on the demand side? Every unit of economic output has energy behind it. Restrict energy, and prices will rise even without the labor problems brought about by the plandemic. America First? That’s a good one.
Green energy. Solar, wind..whatever.. Pay very close attention to California over the next few years. We already know there are huge power generation issues out there going all the back to gov gray davis..You can look the following up. Their own state legislative body patted themselves on the back for making it impossible for any nuclear power plant to be ‘recommissioned’
They bragged how they topped the NRC regs in this matter admitting this will end nuclear power in that state.
I was in the heavy equipment business for years so I kept up with trends. A picture (s) showed numerous power sub stations/plants along side numerous CAT tractor trailer generators… Think about that. We need clean energy so we fubar our grid and now have to supplement power generation with hundreds of diesel powered generators..unreal..smh
That was 20 years ago. So thanks to the wizards of smart the situation is going to get so much worse for the consumer as power will be bought at a premium and passed on to any and all out there..which is already happening.. The sad thing is the state run propaganda machine will blame everything and everybody other than the ones who caused it. And of course coal is pretty much done out there also.. Did rolling ‘black out’s which began years ago not teach anybody anything?..
No “rolling blackouts did not teach anything” because people are tooooo gd stupid to pay attention. Not until they’re freezing will they pay an ounce of attention.
Agreed.. When their using sterno to cook on they still want get it…
And when they start to freeze they’ll blame who they’re told to.
And to the ENTIRE DEMOCRAP PARTYY,…
A BIG P H U C K YOU!!!!
MAY EVERY SINGLE ONE OF THEM BURN IN HELL!
And the entire REPUBLICAN PARTY, as well!
They rely on division to retain control.
Dividing us, whether by race, religion, gender or politics, …ANY excuse to divide us, is their goal.
And so, behind closed doors, it is NOT the D’s vs the R’s, it is THEM, working in Unity, against US, the American people.
With honest advocacy of our policy positions, our country could NEVER have been moved so far left, by “dose dam democraps!”
Dose dam Republicons helped the process, every step of the way.
Made it on the “South China Morning Post” website –
https://www.scmp.com/economy/china-economy/article/3190420/us-federal-reserves-interest-rates-pledge-leaves-china-less?module=lead_hero_story&pgtype=homepage
Stop immigration & deport. That would lessen those toxic (sarc) Globull Warming causing Green House Gases, pollution, depletion of natural resources like water, preserve open spaces for flora & fauna, AND mean less demand on fuel sources.
These are some of the “Green” things they say need to be done to preserve the planet, yet never talk the real/genuine steps which would be again, stop immigration and deport. Green New Deal? Green New Depression with no real environmental steps in it. It’s all a lie
Exactly… it is not 1822 and the Midwest, Great Plains, and West are not sparsely populated anymore. We are FULL!!
We were only 35M during the Civil War… did not reach 100M until 1920…. even with moratorium on immigration after WWI, we self-populated to 150M in 1950….. then 200 M around 1975…. Now we have 340M! We have enough citizens to self-propagate , even Hispanics, that don’t need ANY MORE!!!
Will somebody ask a politician the simple question:”How many people should be living here in 2100?? 400M? 500M? 750M? 1B???” Maybe we should ask regular American Citizens AFTER they look at easy -to-read population charts and maps before blabbing out their answer like an ignorant college senior..
Then consider donating to KL, anythingvyou can spare.
Declare an invasion on day one, and activate the NG.
Sign interstate compacts with other governors, so that states NG troops can be utilised.
Order commandant to dispatch NG to the border, to findcand destroy smuggleing tunnels.
“And I am not really concerned if they are occupied at the time!”
Order commandant to work with, and establish protection for contractors to finish “Trumps border wall”, with safety of our personelle as a highest priority.
“I fully anticipate a fight with the Federal Govt, and am looking forward to it!”
As Governor of a border State, she will HAVE the authority, and unlike others will use it.
“If doormat Ducey (the current Gov.) had even ONE ball, he would stand up to the cartels, and end trafficing (drug and human) across the S. border, which he could do, tomorrow.”
So, WHY should you consider donating, if you don’t live in Az? Obviously you ‘pay for’ the unrestricted flow across that border, even if you live in Maine.
Might have been nice if Powell had done something when he saw inflation coming, rather than well after it got here. Since we know what causes it and all. Perhaps he could have asked Congress not to spend so much money that we don’t have?
Regardless, opening his mouth yesterday caused another 1,000 point drop in the DOW.
Remember – the entire climate change ‘crisis’ is about 97 percent bullshit.
All this is simply being done to turn over all power of energy to foreign powers.
It’s just another act of treason – probably the worst ever.
From J. Powell to those holding US Dollars and dependent on the US economy, “The beatings will continue until the morale improves.”
Americans have nothing coming. They bought into the fear porn produced by Fauci and Co. during a fake pandemic. They lined up like sheep for dangerous injections they knew noting about. They wore asinine masks that were TOTALLY useless against a virus spread. Many of these idiots even drove around in thier cars wearing masks! They allowed themselves to be locked down like cattle in stock pens. Their government policies killed and maimed millions of people, including their own friends and family. They still didn’t get it.
They then took trillions in ‘free’ money from the FED in the form of stimulus and PPP ‘loans’ without realizing or even thinking about the consequences. CLUE: There is no free ride…..
We now have many people who won’t go back to work or who are ‘quiet quitting’ on the job. We have bought into a debt based economy predicated on something called MMT. There is NO fiscal responsibility or even any thought given to trillions of dollars in debt and loans. The profligate spending by individuals knows no bounds.
Politicians of both parties, in conjunction with the Federal Reserve, throw trillions of dollars around like its confetti. We have what amounts to a potted plant living in the White House making one dangerous edict after another. Taxpayers don’t seem to really care as long as they get some crumbs thrown their way. This debt based economy is fast unraveling!
There will be hell to pay and the average American will blame everything and everyone but THEMSELVES!
Break out the popcorn because this show is just getting started.
We must keep at WHAT until WHAT job is done, herr Powell?
Have you ever felt any economic pain, herr Powell? Or are you so successful at your grift on the backs of those who pay your salary and fund your annuities, that you have lived a cushy, insulated life?
Notice how, in addition to not clarifying “how MUCH pain?” he is vague about “for how LONG?” with empty assurances as to them getting control.
Given hevis presenting an upside down viewcof the fundamentals (CAUSE) doesn’t inspire confidence he has a clue as to how to “get it under control”.
Surgeon, pilot images flash in my mind,…they are crazy or stupid, and are making decisions that are gonna KILL me.
I prefer Tom Luongo’s take that the non-Davos portion of the fed taking down the offshore dollar market and the euro-commie eugenicists is being driven by their own survival incentive.
This is the great reset. The takeover of the globalists and they are assisted by both parties here in the US! There will be NO ‘middle’ class. It will be the elites and the poor who will have no choice. So the sacrifice according to powell will be real and much worse than he describes. It is upon us.
The manufacturing industry is feeling the staffing pinch as nearly 10,000 Baby Boomers reach retirement each day. And it’s only going to get worse. Of the more than 76 million Baby Boomers, only 80% are currently still in the labor workforce. That number is expected to drop to 40% by 2022.