Powell admits Trump was right

Always in His Presence said:

What Fed must do now after Jerome Powell's Jackson Hole epiphany​

Click to expand...

I went ahead and ran an AI on this article.

Based on the Fox News opinion article, which is written by Peter Navarro, a former White House advisor, the author claims that Jerome Powell had an "epiphany" and "finally" admitted that tariffs do not cause persistent inflation. This is presented as an argument for why the Fed should now lower interest rates.
However, based on previous news reports, Jerome Powell has not made such an admission. Instead, he has said that the effects of tariffs on consumer prices are now "clearly visible" and that they are a factor to consider, alongside other economic data, when making decisions about interest rates. The reports from a variety of news sources, including the Associated Press and PBS, state that Powell is carefully evaluating all economic data before making any changes, and that he has repeatedly emphasized the Fed's independence from political pressure.
Therefore, the Fox News opinion article's interpretation that Powell's statements are an admission that Trump was right is not supported by the reporting from other news outlets. The article presents an opinion and an interpretation of events, rather than a factual account of Powell admitting he was wrong.

Always in His Presence said:

We will find out in September if the Fed lowers prime - won't we.

Click to expand...

In my opinion, the Fed should have already lowered prime interest rates.

Maria Billingsley said:

I went ahead and ran an AI on this article.

Based on the Fox News opinion article, which is written by Peter Navarro, a former White House advisor, the author claims that Jerome Powell had an "epiphany" and "finally" admitted that tariffs do not cause persistent inflation. This is presented as an argument for why the Fed should now lower interest rates.
However, based on previous news reports, Jerome Powell has not made such an admission. Instead, he has said that the effects of tariffs on consumer prices are now "clearly visible" and that they are a factor to consider, alongside other economic data, when making decisions about interest rates. The reports from a variety of news sources, including the Associated Press and PBS, state that Powell is carefully evaluating all economic data before making any changes, and that he has repeatedly emphasized the Fed's independence from political pressure.
Therefore, the Fox News opinion article's interpretation that Powell's statements are an admission that Trump was right is not supported by the reporting from other news outlets. The article presents an opinion and an interpretation of events, rather than a factual account of Powell admitting he was wrong.

Click to expand...

You needed AI to tell you that the article was an op-ed?

Yikes.

Always in His Presence said:

We will find out in September if the Fed lowers prime - won't we.

Click to expand...

That will not tell us whether Powell thinks tariffs are unrelated to inflation. His actual speech from Jackson Hole does the opposite:

Federal Reserve Chair Jerome Powell talks about the impact of President Donald Trump's tariffs on consumer prices and inflation. Powell says inflation has been above their target level for more than four years and remains a "prominent concern for households and businesses." He speaks at the Fed's annual conference in Jackson Hole, Wyoming.

Always in His Presence said:

We will find out in September if the Fed lowers prime - won't we.

Click to expand...

The PCE the Fed's preferred inflation measure comes out this Friday. That could be somewhat of a preview. I guess the latest .9 percent PPI should be disregarded? (Over a 10% annual rate, if it were to persist)Powell is a dove and was wrong before of as they said inflation was "transitory." Raising taxes and eventually prices from tariffs is interesting because it does two things. It raises consumer costs and workers will try to demand more wages, this will allow inflation to linger longer and likely it could multiply for some time.

However, the second thing tariffs do is reduce demand because consumers now have less money. This will likely occur more slowly. Deficient demand will work the opposite way for prices. Some of this lack of demand is that the US tariffs will be hurting the world economy. So less world demand, inefficient cost shifting between countries and reduced domestic spending power is going to likely pack a punch. Powell has to try and thread the needle. Likely he is going to lower 1/2 point (one or two meetings) and pause. Inflation will likely show up to justify this. But soon we will see a crash, (maybe very soon, the stock market is at record highs).

Other things to watch for.

The Fed keeps track of the demand for all it's auctions. The latest demands were quite week. Lowering rates will make this problem worse. So you actually could see short-term rates go lower but long-term rates increase. https://www.barrons.com/articles/treasury-30-year-bond-auction-yields-f32727f4
The Fed could buy longer term maturities directly but their balance sheet money printing will spook investors if they even hint at that.
The bond market took the last hit of inflation. Many lost serious money buying a long maturity bond that paid just 3%. I doubt we will ever see
long term rates that low again. Why? Because no one wants that debt when the government is increasing their spending. Even with the tariff revenue the deficit is climbing. Things are getting unsustainable and the Federal Reserve is really in no position to help that much.

Stagflation which is very new to most is likely for some months. Inflation plus low or negative growth. Powell will be defenseless. raise rates and hurt the eocnomy more, lower rates and the long end of the curve may not even move. He is lucky he is retiring soon.

Vambram said:

In my opinion, the Fed should have already lowered prime interest rates.

Click to expand...

I copied part from my other post. The Federal Reserve does not control the prime rate or mortgage rates directly. They only lower short-term lending. To control the whole spectrum requires lots of money. Sure they can print it, but they did that during covid and spent several trillion that brought us the inflation bout last time and that still lingers.

To prove this the "Fed keeps track of the demand for all it's auctions. The latest demand was quite weak. Lowering short-term rates will make this problem worse. So you actually could see short-term rates go lower but long-term rates may not follow and could even increase. https://www.barrons.com/articles/treasury-30-year-bond-auction-yields-f32727f4

The bond market took the last hit of inflation. Many lost serious money buying a long maturity bond that paid just 3%. I doubt we will ever see long term rates that low again. Why? Because no one wants that debt when the government is increasing their spending. Even with the tariff revenue the deficit is climbing. Things are getting unsustainable and the Federal Reserve is really in no position to help that much.

Vambram said:

In my opinion, the Fed should have already lowered prime interest rates.

Click to expand...

They probably would have if Trump just left things well enough alone.
They literally paused a potential drop because of Trump chaos.

Say it aint so said:

They probably would have if Trump just left things well enough alone.
They literally paused a potential drop because of Trump chaos.

Click to expand...

Sure, it's a great idea to allow the USA to continue to be taken advantage of by the globalists and nations in global trade. .... NOT.

Vambram said:

Sure, it's a great idea to allow the USA to continue to be taken advantage of by the globalists and nations in global trade. .... NOT.

Click to expand...

That's Trump talk and he doesn't know what he's talking about nor what he's doing.
Which again is why his Ouji board tariff rate where not one deal has been fully completed is why loan rates haven't dropped.

Say it aint so said:

That's Trump talk and he doesn't know what he's talking about nor what he's doing.
Which again is why his Ouji board tariff rate where not one deal has been fully completed is why loan rates haven't dropped.

Click to expand...

President Trump understands what he is talking about. It's not his fault that you appear to be alright with other nations taking advantage of the USA.

Vambram said:

President Trump understands what he is talking about. It's not his fault that you appear to be alright with other nations taking advantage of the USA.

Click to expand...

No one is taking advantage of the US no different than the gas station is taking advantage of you because you buy gas. He claims America is being taking advantage of, and points to the trade deficit. The trade deficit which has just increased under his watch; ever since his increase on the island where only Penguins exist.

Say it aint so said:

No one is taking advantage of the US no different than the gas station is taking advantage of you because you buy gas. He claims America is being taking advantage of, and points to the trade deficit. The trade deficit which has just has increased under his watch; ever since his increase on the island where only Penguins exist.

Click to expand...

Coffee has risen by about 25-35 percent due to Trump's tariffs already. The biggest burdened of Trump's tariffs are going to fall on the shoulders of... you and me. But I actually think that's a "feature" for the oligarchs in charge of things, not a bug. Immiseration seems like part of their strategy to get us all poor and desperate.

FireDragon76 said:

Coffee has risen by about 25-35 percent due to Trump's tariffs already. The biggest burdened of Trump's tariffs are going to fall on the shoulders of... you and me. But I actually think that's a "feature" for the oligarchs in charge of things, not a bug. Immiseration seems like part of their strategy to get us all poor and desperate.

Click to expand...

I agree that ensuring we are poor could be a strategy of an oligarchy (plutarchy?), but it does not seem like Trump or his administration have an overall strategy. The TACO trade policy is not a strategy, is it? Maybe these folks are terribly smart but just look dumb to fool us?

probinson said:

You needed AI to tell you that the article was an op-ed?

Yikes.

Click to expand...

Rude, much? The AI sums it up succinctly. Not everyone knows who/what Peter Navarro is, but for those of us who do:

Always in His Presence said:

What Fed must do now after Jerome Powell's Jackson Hole epiphany​

Click to expand...

Always in His Presence said:

What Fed must do now after Jerome Powell's Jackson Hole epiphany​

Click to expand...

And if Powell doesn't reduce the interest rate at all *or* as much as Trump would like, will you support his firing? (for sake of argument, let's pretend the POTUS has the power to do so).

Yes or No?

Always in His Presence said:

We will find out in September if the Fed lowers prime - won't we.

Click to expand...

You should correct your misleading post; Powell never said what you posted.