- The president is furious with Powell…
- Could the U.S. bomb Iran by this weekend?…
- The income secret that could literally MAKE your retirement…
Dear Reader,
With whom is the president sorer — Ayatollah Ali Khamenei — or Chairman Jerome H. Powell?
I hazard the answer is Chairman Jerome H. Powell.
Yesterday Mr. Powell and mates held rates steady… despite the president’s multiple pleas for slashings.
And the president gave him a good round piece of his mind:
- We have a stupid person at the Fed… I don’t even think he’s political. I think he hates me… Europe had ten cuts and we had none… He‘s a political guy who‘s not a smart person, but he‘s costing the country a fortune.
- I call him every name in the book trying to get him to do something. I do it every way in the book. I’m nasty, I’m nice. Nothing works. He’s like just a stupid person. I call him Too Late, Powell, because he‘s always too late.I mean, if you look at him, every time I did this, I was right 100 percent, he was wrong.
Yada, Yada, Yada
Mr. Powell did not return fire. He did however babble his customary post-announcement mummeries:
- My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people…
- In support of our goals, today the Federal Open Market Committee decided to leave our policy interest rate unchanged. We believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments…
- We will continue to determine the appropriate stance of monetary policy based on the incoming data, the evolving outlook, and the balance of risks.
It’s on Purpose
As a student of the psychological arts and sciences, I confess to a certain admiration for Mr. Powell’s stratagem.
His tedious readings dullen and sedate all of the attending press… which slips into a sort of torporous trance.
Thus mesmerized into witless stupefaction, they are unable to manufacture sharp questions to ask him.
And he escapes without saying one thing.
It is a high, yet underrated talent. And it is in this Powell fellow.
Yet it is a talent entirely lacking in the president. His speech is nearer to machine gun fire than speech itself.
Machine gun fire is not dull.
Does the president’s speech — at times — lack accuracy?
Well, a machine gun lacks accuracy. Yet it compensates for inaccuracy through violence of action.
The president wields the weapon to great effect. He is a formidable gunner.
The Market Shrugs Its Shoulders
Yet I veer off track. Let us return then to yesterday’s Federal Reserve’s decision.
Was it the proper decision?
The stock market stroked its chin, thought about it… and largely shrugged its shoulders.
Both the Dow Jones Industrial Average and S&P lost territory on the day — yet slight territory.
Yet the Nasdaq Composite gained slight territory.
Gold, meantime, was knocked $20 backward.
What do the “experts” say?
Mr. Chris Zaccarelli chief investment officer at Northlight Asset Management. From whom:
- Effectively they are sitting on their hands, waiting to see if tariffs increase inflation or the jobs market starts to falter, and whichever part of their dual mandate is impacted first will likely guide whichever direction they take, although the bias is still toward cutting rates (or at least keeping rates unchanged; not raising rates).
More “Expert” Opinion
Adds a certain Byron Anderson, fixed income director at Laffer Tengler Investments:
- The Fed has flipped from a long-term data stance when inflation was raging, to this short-term data focus toward rising inflation, as we are seeing cracks in soft data coming from growth, consumers, labor markets, and housing. The Fed seems obsessed with tariff inflation and are willing to sacrifice employment and GDP growth before adjusting this stance.
Finally, Mr. David Kelly, JPMorgan Asset Management chief global strategist, argues that:
- By the end of the next year, the economy should be cooling down. Inflation should be cooling down, and maybe then they can give us some lower rates. Right now, do not hold your breath waiting for low rates from the Federal Reserve because they don’t seem to have any intention of delivering them.
The market, incidentally, gives roughly 75% odds of two rate reductions by year’s end.
Of course the business is subjected to — as the human sleeping pill Powell observes — “the incoming data, the evolving outlook, and the balance of risks.”
How’s This for Risk?
I hazard that Middle East warfare represents a “risk” affecting “the evolving outlook.”
Meantime, my spies report whispers that the president has approved plans to bombard Iran.
Yet the same whispers indicate he has not yet ordered the bombardment.
He is, evidently, offering Iran’s Supreme Leader one final opportunity to capitulate.
I cannot identify the president’s midnight deadline.
Yet my spies advise me to expect bombfall by this weekend’s conclusion… absent Iranian capitulation.
Of course I report whispers — not facts.
And you are free to dismiss them as you please.
Yet I would remind you that many whispers louden into screams.
Brian Maher
for Freedom Financial News
