• Re: Fed chief Powell 'did what he needed to do' in Jackson Hole, Larry

    From Putin Owns Biden@21:1/5 to governor.swill@gmail.com on Sun Aug 28 06:49:33 2022
    XPost: talk.politics.guns, alt.politics.economics, or.politics

    In article <t1cde1$2uq3r$119@news.freedyn.de>
    <governor.swill@gmail.com> wrote:

    Obama and Biden are both idiots. They flunked math.

    ‘The Fed is positioned as well as it can be — given the
    credibility losses and mistakes that there have been — with
    these remarks to manage things going forward.’— Larry Summers
    Former U.S. Treasury Secretary Lawrence Summers handed out some
    rare praise for the Federal Reserve on Friday, saying Fed chief
    Jerome Powell’s latest pledge to restrain inflation was a
    “statement of being resolute.”

    See: Fed’s Powell says bringing down inflation will cause pain
    to households and businesses in Jackson Hole speech

    Shortly after Powell spoke at the annual central-bank symposium
    in Jackson Hole, Wyo., Summers told Bloomberg that the Fed
    chairman had done “what he needed to do” and that it was clear
    the Fed’s “overwhelming priority” is pulling back inflation from
    the fastest pace in four decades.

    In a brief six-page speech, Powell signaled the Fed is likely to
    keep raising interest rates and leave them elevated for a while
    to stamp out inflation. He said restoring the annual inflation
    rate to the 2% target is the central bank’s “overarching focus
    right now” even though consumers and businesses will feel
    economic pain.

    Summers, a former chief economist at the World Bank, former
    director of the National Economics Council, and former U.S.
    Treasury secretary, as well as a former Harvard University
    president, has repeatedly criticized the Fed for failing to spot
    the recent surge in inflation and then acting too slowly to
    tackle it.

    For example, earlier this week Summers said that the Federal
    Reserve is causing “confusion” among investors by avoiding a
    clear declaration that unemployment is likely to rise during its
    fight against inflation, according to the New York Post.

    From the archives (June 2022): Here’s why Larry Summers wants 10
    million people to lose their jobs

    “The reality is that it’s probably not so realistic to think”
    the Fed can “get inflation all the way down without unemployment
    up — and they don’t want to acknowledge that,” Summers said a
    week ago. “That forces a certain confusion into all of their

    The U.S. unemployment rate was just 3.5% through July, according
    to the most recent jobs report. At present, the Fed projects
    unemployment will reach just 4.1% by 2024, even as it implements
    a series of sharp interest-rate hikes that will weigh on the
    finances of U.S. firms.

    Summers has argued that unemployment will have to rise to at
    least 5% to successfully tackle inflation and has pointed out
    that the U.S. stock and bond markets have rallied in recent
    weeks in a sign that investors were not yet seeing the Fed’s
    effort to cool the economy through tighter monetary policy as
    restricting economic growth.

    U.S. markets got the message Friday when stocks tumbled, with
    the Dow Jones Industrial Average DJIA, -3.03% closing down more
    than 1,000 points for its worst daily percentage drop since May,
    with focus on the Powell vow that the central bank would
    continue its battle against inflation until the job — of getting
    the annual rise in the U.S.’s cost of living back to its 2%
    target — “is done.”

    See: ‘There’s no Fed pivot’: Wall Street finally gets the
    message as stocks swoon after Powell speech

    After Powell’s speech at Jackson Hole, Summers praised Powell’s
    acknowledgment that there will be a price to pay for cooling
    inflation, noting short-term hits to employment and wages were
    acceptable for ensuring long-term prosperity.

    Powell had “prioritized inflation, making clear that he
    recognized that that prioritization would have short-term
    adverse consequences that wouldn’t be easy,” Summers said,
    adding that the central bank was now as well-positioned as it
    could be given the errors committed, in his view, in the recent

    See also: Inflation falls for first time in more than two years,
    key U.S. gauge shows, due to sinking gas prices

    The former Treasury chief said European Central Bank President
    Christine Lagarde has “a much harder job” than Powell given the
    euro area’s inflation, energy-price shocks and regional
    political problems.

    “It’s going to be a very difficult road for them to walk in
    Europe,” Summers said. “My suspicion would be that they’re going
    to have to raise rates more than is currently priced in, but
    that’s going to come at a time when there’s very substantial
    recessionary forces.”

    Like now?

    https://www.marketwatch.com/story/powell-did-what-he-needed-to- do-in-jackson-hole-larry-summers-says-11661602682

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