In reply to: They were 1.4% off that 2% in 2023 posted by sprack
Biden could have dumped Powell, and Biden should have dumped Powell after Powell let Trump bully him around.
Don't worry, when Powell was renominated Biden had full confidence that Powell would keep inflation under control. Ya know, until Powell lost control of inflation and CPI exploded.
“I’m confident that Chair Powell and Dr. Brainard’s focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before. Together, they also share my deep belief that urgent action is needed to address the economic risks posed by climate change, and stay ahead of emerging risks in our financial system,” Biden said.
In July of 2020 Powell famously said "We’re Not Even Thinking About Thinking About Raising Rates" last year, Powell said that the Fed is "not thinking about rate cuts right now at all". Powell has been behind the curve at every step of his tenure. He deserves to get the boot, and should have gotten the boot in 2021.
How people think a depression could have been avoided without stimulating the economy during Covid is beyond rational comprehension.
And I was just stating a fact that Trump nominated Powell, because, well, he did, and unlike many of his appointments, he actually appointed a guy well-qualified for the job.
and right in the middle of covid. Did he say that in July, 2021? I dont remember timeline
The Fed is almost always is behind the curve a little bit, they are never going to try to front run economic data. That is for the market.
The Fed unleashed trillions in liquidity, PPP was pushed out, and the vaccine was on the horizon. Did we need bravado from the Fed Chair? What was the point of declaring an absolute position? Then, he did it again just a few months ago.
The transitory timeline also really annoys me. Powell was slow to acknowledge reality, and extremely slow to start QT.
I'm failing to see the justification for giving him another term. He's not Burns bad, and he isn't Volcker great. He is also below Greenspan and Bernanke (who I also have issues with).
I'm starting to believe that we need to overhaul monetary policy. We place too much emphasis on the Fed's every move and statement. It reeks of central planning, and we need to devise a better system. Maybe embrace AI and let an algorithm set interest rates. Friedman proposed it decades ago, so the idea was been around for a long time (under less advanced technology).
No one was going to raise rates as fast as we probably needed right away and if we did that might have forced a recession. And once Powell got going he raised them quite quickly. We got to 4.5% by end of 2022 and after onyl starting in March of that year, and once the markets saw the Fed meant business you started to see inflation come down (obviously the supply chain issues slowly getting fixed and fear of Russia vs Ukraine waning helped too). If we started a few months earlier, say in the summer of 2021, I doubt it would have mattered that much in the grand scheme of things. No one would have raised rates 300 bps in 6 months with CPI in the 4s and 5s. They would have started slowly and that never would have been enough to restrict the oncoming inflation surge. Plenty of people were predicting future inflation, but no one was suggesting 7-9%. I agree Powell was slow to raise and stupidly wanted to wait until the bond purchasing was over before raising, but going from 0- to say 1% rate by March of 2022 would not have done much, IMO. It probably would only had meant that they would not raise 75bps 3 times in a row.
I think Powell has done a pretty good job if he is able to soft land this thing and possibly avoid a recession. At the very least he certainly pushed it down the road months to even years past when every economist on the planet predicted it was going to happen.