Fed Chr Promises More ‘Resolve’ & ‘Pain’

Fed Chrm Powell gave sobering message on economy & to Wall Street optimists thinking inflation was going to be licked by early 2023. He says expect more “resolve” in upping interest rates & “pain” for households & business.

As Powell warned a gaggle of central bankers at Jackson Hole on Friday, “We must keep at it until the job is done.” And, by saying he has to keep raising interest rates & hold them at a higher level until he’s “confident inflation is under control,” he means inflation is NOT under control, nor will it be any time soon. That is NOT what some of them and their allies in financial circles had hoped to hear. “Those are the unfortunate costs of reducing inflation,” he concluded, “But a failure to restore price stability would mean far greater pain.”

Still left unsaid, however, was whether the Fed’s interest rate, upped by 75 base points two times this summer in what is the fastest pace of hikes since the early 1990s, will be raised yet another 75 points when it’s September meeting convenes. Hold on to your hats, folks.

Davd Soul