Fed’s Jerry Shoots Foot Ala Don & Joe

After raising interest rate by 75 base pts, Fed Chm Powell sent market plunging by contradicting earlier signals lower increases might be in near future. Still, we feel his pain as “Hold Your Horses Jerry’s” Fed is taking $ hit too.

That is, as the WSJ noted recently, Mr. Powell’s “Higher Rates [to fight escalating inflation] Fuel Losses at the Fed” since the central bank, like all of us, are now having to “pay out more in interest than it earns in interest income.” But, let’s go back to start at the beginning …

Mr. Powell couldn’t stand prosperity when the market actually ROSE after the Fed’s latest 75-point rate hike was announced in mid-week and the staff’s explanatory memo was widely read as suggesting future increases could be less draconian or even “paused.” Then, however, Mr. Powell held a presser & the market tanked badly. The WSJ put it this way: “The cliche’ is that a central bank’s job is to take away the punch bowl, though not usually in 30 minutes. Yet that’s what happened Wednesday when Federal Reserve Chairman Jerome Powell explained in his press conference that he really is staying the anti-inflation course, half an hour after a Fed statement had seemed to hint to the contrary.” Q: Is Jerry taking communications lessens from Don and Joe?

Davd Soul