Recession is the betting favorite among possible pending economic outcomes. Indeed, it’s probably already won. From Jon Wolfenberger at lewrockwell.com:
Jay “the inflation we caused is transitory” Powell finally did it.
On Friday, the Fed Chair finally mustered the courage to say that he is going to do the job he has been hired to do: the Fed will not “pivot” to cut interest rates until inflation slows meaningfully and persistently — even if the stock, bond and housing bear markets become much worse and the economy goes into recession.
The stock market reacted with its biggest decline in over two months, with the S&P 500 falling 3.3%.
Powell’s Speech Translated
Below we provide key quotes from, along with our honest translations:
“Today, my remarks will be shorter, my focus narrower, and my message more direct.”
This was indeed one of the shortest and clearest Fed speeches in history. Powell wanted everyone to understand, in no uncertain terms, the damage they intend to inflict on financial markets and the economy.
“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.”