Why Are More Fed Hikes Less Believable?

Could Fed Chairman Powell have been any more candid in warning the surge in hiring at year’s end, despite breakneck raises in interest rates, means MORE hikes to fight a stubborn inflation are in foreseeable future?

Mr. Powell’s words when talking Tuesday before the Economic Club of Washington, DC and explaining his plans for lowering the nation’s 6-7% inflation rate to a more normal 2%: It is “likely to take quite a bit of time. It’s not going to be, we don’t think, smooth. It’s probably going to be bumpy … [The widely held expectation that this debilitating inflation] will go away quickly and painlessly … is not the base case … we’ll have to do more rate increases, and then we’ll have to look around & see whether we’ve done enough.” Doesn’t sound like the Fed guy is going to “pause” the Fed’s own relentless interest rate hikes that ripple throughout the economy as many optimists on Wall Street & Capitol Hill had hoped when the latest inflation numbers edged a tad downward. Or, many insisted to the MSM in the days immediately following, despite increasingly depressing housing reports & big corporate lay-offs being announced.

But, then, the DOL released stats saying employers added 517K jobs in January suggesting little was really cooling off when the experts had predicted under 200K. Think Mr. Powell will get any help from the Swamp as it considers raising the nation’s $31.7 trillion dollar deficit to avoid insolvency soon or think the just-released US trade deficit hitting a record high in 2022 are cause to pause anything? Doesn’t this all seem hauntingly similar to the Fed-speak we heard under Obama’s Fed guy Ben Shalom Bernanke after the 2008 global financial meltdown that led to 10 years of stagnation in the US?

Davd Soul