Jay Weber Show transcript 8-29-22
So, Jerome Powell stomped on any investor ‘exuberance’ on Friday.
It was just a week or so ago, that we were talking about how Powell was screwing up his own war on inflation.
He has been subjecting the country to these major hikes in the interest rate, but at the same time, was sending messages to investors that they might be short lived-or this inflation might not last longer term-
And it had the effect of working against the mission: it had investors in late June and early July buying stocks and thinking that the worst of the economic downturn and/or the market slides were over-
And they aren’t.
I was saying just a week or so ago-president Biden and the democrats refuse to make any of the policy moves that would reduce inflation-in fact-they keep doing the opposite and approving trillions more in govt spending-
And so-the only option Biden has given his administration is to have the fed ‘crash’ the economy with these huge rate hikes. Right thru this year and probably into next year...
If the only tool you are given is a hammer...well. All you can do is go around and pound things until they break.
This is Powell’s mission with the economy: keep raising interest rates until he crashes the economy...dries up the excess available jobs...forces hundreds of thousands of Americans out of work.... takes away the disposable income that so many Americans have to spend right now.
This is the mission.
And Powell was blathering too much, and sending mixed signals, and that is what has led to a bit of a market recovery over the last several weeks.
Well-
No more.
On Friday- Powell warned of pain ahead in a speech that was intentionally brisk and short.
It makes me wonder if he is finally wising up and taking the Alan Greenspan approach: shut up, because anything you say- any way you say it-is going to be misinterpreted.
And so-the market plunge of one-thousand points on Friday-was all Powell’s doing.
So, nothing’s going to get better-financially-for you, any time soon. And it could get worse.
Powell and the fed will likely hike the prime rate by other three-quarters of a point in September. For the third month in a row.
The point of hiking the interest rate is to decrease demand. The housing market and investing are already cooling...but job growth has remained strong...and in this perverse situation that Biden and the democrats have put the fed in- we need to see large numbers of people-put out of work- and signs of real economic pain- before anything gets better.
And again-president Biden could mitigate some of the pain with policies that cut taxes or provide businesses with some certainty and encourage investment-but he’s not going to do that. He and his party are doing the exact opposite-and attacking businesses and are raising taxes on them-and all of us- even as they are dumping even more govt. money into the economy...worsening inflation.
And look-as one columnist put it: it’s not Jerome Powell’s job to provide comfort to the American people. His job is to get inflation back down to around two percent- where it was when Biden took over the presidency and the economy was starting to really hum along. Coming out of the covid shutdown. Trump and his people had us on a great path-and Biden and the dems bleeped it all up.
We now have nine percent inflation- way too much money chasing way too few goods and services- and Powell’s mission is to correct that. Even if it means crashing the car and destroying Americans’ lives with job losses and empty savings accounts.
Of course, we are already in a recession, But the Biden administration redefined the term and their lapdogs in the media went along with it-without question.
We are already-in-recession. But Powell is insisting-Americans need to feel more pain-before anything gets better.
And all because Joe Biden and the democrats rushed to spend another two-trillion dollars in totally unnecessary ‘gifting’ to their political supporters...and in direct checks to a segment of society whose votes they want to buy.
It's a move that should be criminal.
photo credit: Getty Images
story credit: Reuters Investors see no Fed pivot, brace for hawkish Powell message in Jackson Hole