Home › 6a) Gold & Monetary Metals › 6a.) GoldCore › A muddled message from The Fed
Permanent link to this article: https://snbchf.com/2022/07/flood-message-the-fed/
Donate to SNBCHF.com
Donate to SNBCHF.com Via Paypal or Bitcoin To Help Keep the Site Running
Please consider making a small donation to Snbchf.com. Thanks
Bitcoin wallet: bc1qa2h6hgd0xkuh7xh02jm5x25k6x8g7548ffaj3j
Receive a Daily Mail from this Blog
Live Currency Cross Rates
On Swiss National Bank
-
USD/CHF stays above 0.9100 nearing the highs since October
3 days ago -
SNB Sight Deposits: increased by 17.0 billion francs compared to the previous week
3 days ago -
Pound Sterling falls back as upbeat US Retail Sales strengthen US Dollar
4 days ago -
Canadian Dollar remains vulnerable after strong US Retail Sales
4 days ago -
2024-04-09 – Martin Schlegel: Interest rates and foreign exchange interventions: Achieving price stability in challenging times
10 days ago
Main SNB Background Info
-
SNB Sight Deposits: increased by 17.0 billion francs compared to the previous week
3 days ago -
The Secret History Of The Banking Crisis
2017-08-14 -
SNB Balance Sheet Now Over 100 percent GDP
2016-08-29 -
The relationship between CHF and gold
2016-07-23 -
CHF Price Movements: Correlations between CHF and the German Economy
2016-07-22
Featured and recent
-
Navigating Market Bubbles and Lessons on Shorts – Andy Tanner
-
Is The Gold Price Too High To Buy? The Train Hasn’t Left The Station!
-
Understanding the Recent Inflation Spike and the Federal Reserve’s Reaction
-
Mit dem Flugzeug pendeln, um Miete zu sparen? ️ #pendeln
-
Mein YouTube Einnahmen: Totale Transparenz
-
Renato Moicano Cares About His Country More Than Sohrab Ahmari
-
4-18-24 Are We On Japan’s Path to Stagnation?
-
The Tiny Island That Serves As a Tripwire for War between the US and China
-
Eilt: dramatische Wende im Ukraine-Konflikt!
-
Widerstand zwecklos (?): DJE-plusNews April 2024 mit Mario Künzel und Moritz Rehmann
More from this category
- Renato Moicano Cares About His Country More Than Sohrab Ahmari
18 Apr 2024
- The Tiny Island That Serves As a Tripwire for War between the US and China
18 Apr 2024
- Freedom Fest 2024
18 Apr 2024
- Murphy’s Exposé on Money and Banking
18 Apr 2024
- For a New Liberty: Discussion Questions
17 Apr 2024
- Can John C. Calhoun Save America?
17 Apr 2024
- 100-Percent Reserves banking in Argentina and the Real Bills Doctrine
17 Apr 2024
- Social Security and the Decline of the Employer Pension System
17 Apr 2024
- Speaker Mike Johnson Continues the GOP’s War against Freedom
17 Apr 2024
- Classical Liberal Roots of the Marxist Doctrine of Classes
17 Apr 2024
- Murray Rothbard Understood the Importance of Self-Ownership
17 Apr 2024
- A Message from the Great Dr. Ron Paul
17 Apr 2024
- How Court Historians Turn Political Villains into Heroes
17 Apr 2024
- A Day in the Life of a “Foreign Adversary Controlled” Application
17 Apr 2024
- Is Anyone Smart Enough to use Inflation & the Public Debt to Manage the Economy?
17 Apr 2024
- What are Mises’s Six Lessons?
17 Apr 2024
- Iran’s Attack on Israel Provides an Opportunity to De-escalate
17 Apr 2024
- Navigating the Slippery Slope: How Hoover’s Interventions Paved the Way for the Great Depression
16 Apr 2024
- Frédéric Bastiat Was a Radical Opponent of War and Militarism
16 Apr 2024
- Millennials: In Costco We Trust
16 Apr 2024
A muddled message from The Fed
Published on July 29, 2022
Stephen Flood
My articles My videosMy books
Follow on:
A Conference full of Flaws
Asking about the negative GDP data in Q1 and that data and models (including the Atlanta Fed’s GDP model) are suggesting Q2 could also be negative, Chair Powell said that GDP data can’t be trusted! If the data from other U.S. government statistical agencies can’t be trusted, then what is the Fed basing its forecasts and policy decisions on? Maybe he decided to follow President Biden’s declaration. Which is there is no recession happening now and there won’t be one in the U.S. If GDP data calculated and released by the U.S. Bureau of Economic Analysis (BEA) can’t be trusted, then how can the Fed’s preferred measure of inflation? The PCE Index (Personal Consumption Expenditures), which is calculated by the same agency be trusted? This press conference had so many flaws of logic that maybe, just maybe, the mainstream media will begin to doubt the Fed and its central banking friends are infallible! Chair Powell stated several times that the Fed focuses on bringing inflation down to 2% measured by the PCE index. The Fed has little control over the supply side of the equation. Also, the shortages are caused by supply problems from China, the Russia/Ukraine war, etc. The Fed aims to achieve lower inflation by stifling demand through tighter monetary policy. Did he really mean to say that Russia’s war affected supply chains therefore interest rates must go up to shrink the economy? Even if he did not mean it, that is what he said. Did Russia just become the de facto controller of the US economy? (side-note: Check out episode two of The M3 Report for more on this) It seems that the Fed has lost its ability to focus on more than one specific indicator at a time. Remember last year when inflation was rising quickly, they stuck to the stance that inflation was “transitory”, and they didn’t need to react? Yet now they are raising rates at a quick clip to try and combat that inflation. Even though other indicators are already showing an economic slowdown. Furthermore, inflation data is a lagging indicator. The latest PCE index numbers are for May and the latest CPI data is from June. The decline in commodity prices and the already indicated slowdown in economic activity (which leads to less spending) will filter through the economy and compound the Fed’s tightening.The Fed to Tackle Inflation with Rate Increase?
Last summer the message from the Fed was that inflation was transitory, and they did not react to any of the indicators that showed otherwise. Now the Fed is frantically trying to catch up on that error. This summer the message from the Fed is that the U.S. is not in a recession. Also, its focus is solely on bringing inflation down to its 2% goal. (We remind readers a 2% goal was set on a fluke. See Did Central Banks Arrive at their Target Inflation Rate by Mere Fluke? The one glimpse of forward guidance that Chair Powell did provide was: Now that we’re at neutral, as the process goes on, at some point, it will be appropriate to slow down. And we haven’t made a decision when that point is, but intuitively that makes sense. We’ve been front-end loading these very large rate increases. Now we’re getting closer to where we need to be. Chair Powell was very ambiguous on the question of whether the risk of raising rates too much was the bigger risk for the economy at the current time. Our view is that the giant risk is that the Fed will do too much tightening. This means next summer the Fed will cut rates because the economy is too weak. The rally in gold and silver prices during the press conference, along with the declining longer-term bond yields tell us that those markets agree! Full story here Are you the author?Follow on:
No related photos.
Tags: Central Bank,Commentary,Economics,Featured,Federal Reserve,federal-reserve,FOMC,Gold,gold price,gold price prediction,gold price today,inflation,Interest rates,Jerome Powell,News,newsletter,Precious Metals,silver price,stock market,stocks,the fed