Monetary Policy

[Charles West]

Powell sees a big upsurge in inflation next year but doesn't explain how except to elude to tariffs. Powell may be a Keynesian, which would explain his perspective.

 

[Gobears81]

Powell sees a big upsurge in inflation next year but doesn't explain how except to elude to tariffs. Powell may be a Keynesian, which would explain his perspective.

He previously said that tariffs were transitory, but someone clearly influenced his stance. Now, he uses higher-than-expected tariffs as a rationale for holding rates steady. Tariffs will prove to be deflationary in the longer run, due to the negative impact on the economy IMO. Combining that with an unnecessarily hawkish Fed is a recipe for a severe recession. They have far too much influence on the economy.

 

[Charles West]

Yes. Both Yellen and Powell said inflation would be transitory, until it hit 9%, then they retreated back into their burrows. Now we have a more or less 20% decline in the purchasing power of the dollar because of the Keynesian theory that government monetary expansion isn't inflationary, when in fact, it is the only source of monetary inflation.

 

[Fernando]

Peter Schiff and Bill Pulte are ripping Powell to shreds on X for gross incompetence. It’s obvious Powell is playing politics and intends to harm the US economy to embarrass Trump and enrich the central banks.

Of course they would. They benefit most with lower interest rates.

 

[Fernando]

He previously said that tariffs were transitory, but someone clearly influenced his stance. Now, he uses higher-than-expected tariffs as a rationale for holding rates steady. Tariffs will prove to be deflationary in the longer run, due to the negative impact on the economy IMO. Combining that with an unnecessarily hawkish Fed is a recipe for a severe recession. They have far too much influence on the economy.

Tariff is not deflationary. In what world do you live in.
Prices have increased as we're less aware of it.
When I compare my past receipts to current products on sale, the products are still higher.

 

[Fernando]

Powell sees a big upsurge in inflation next year but doesn't explain how except to elude to tariffs. Powell may be a Keynesian, which would explain his perspective.

Powell is an economist and he has his view of inflation. He's second most powerful person on earth so live with it. Stop whining.

 

[Gobears81]

Tariff is not deflationary. In what world do you live in.
Prices have increased as we're less aware of it.
When I compare my past receipts to current products on sale, the products are still higher.

Shorter term, there will be a one-time price bump, though I anticipate it to be less than expected. Longer term, it weakens the economy and eliminates jobs, so companies will be forced to eat tariffs to move product - hence prices coming down. There are already signs that the economy is weakening.

The Fed doesn't have control over inflation from shorter-term supply shocks or tariffs, but they can control an economy from overheating, which is the real catalyst for longer term inflation, or declining/ deflating. I am not a conspiracy theorist, but suspect that there is subterfuge taking place here, and public opinion seems to be too focused on shorter-term inflation to accept a Fed cut, but that is an elementary understanding of how the Fed influences the economy.

 

[Fernando]

Tariffs increase prices and affect the poor more. Less money (higher proportion of their income) to buy stuff.
Higher income people can live with the higher prices. Wealth gap widens even more, thanks to Trump.

 

[Gobears81]

Tariffs increase prices and affect the poor more. Less money (higher proportion of their income) to buy stuff.
Higher income people can live with the higher prices. Wealth gap widens even more, thanks to Trump.

I get that and don't like tariffs either. But, a rate cut will not have any influence on price bumps that are largely found within the next couple of months - or already in place, as cuts take at least a few months to work their way into the economy.

 

[Charles West]

Powell is an economist and he has his view of inflation. He's second most powerful person on earth so live with it. Stop whining.

He is a Keynesian, as are most of the economists at the Fed.