Fed Chair Powell Says ‘Long Way to Go’ in Inflation Fight, Calls US Debt ‘Unsustainable’ (Connecting the Dots: The Federal Reserve, The Economic Club of Washington, The Carlyle Group, David Rubenstein, The UK & Soros Funding, All Networking)
The Epoch Times
By Andrew Moran
February 7, 2023Updated: February 7, 2023
The United States is watching disinflation travel through
the national economy, but “it has a long way to go” before price stability is
achieved, says Federal Reserve Chair
Jerome Powell.
Speaking at the Economic Club of Washington on Tuesday, the Fed chair acknowledged that
the country is in the “very early stages of disinflation.” However, many parts
of the marketplace are still experiencing elevated inflation, he said, alluding
to the services sector.
In December, services inflation climbed to
7.5 percent year-over-year, according to the Bureau of Labor Statistics. That
is the highest level since August 1982.
According to Powell, it is going to take time to return
inflation to the central bank’s 2 percent target, and the road to this aim is
“probably going to be bumpy.” As a result, he believes that the Fed will need
to hold the policy rate at a restrictive level for an extended period.
“We expect 2023 to be a year of significant declines in
inflation. It’s actually our job to make sure that that’s the case,” Powell
told Carlyle
Group co-founder David
Rubenstein at the event. “My
guess is it will take certainly into not just this year, but next year to get
down close to 2 percent.”
Today, the personal consumption expenditure (PCE) price
index—the Fed’s preferred inflation measurement—is running at an annualized
rate of 5 percent. The core PCE, which strips the volatile food and energy
sectors, is running at 4.4 percent.
Asked if there are any threats to the Fed’s
inflation-busting quantitative tightening (QT) campaign, Powell stated there
are elements that are out of the central bank’s control—such as the war in
Ukraine and the reopening of China’s economy.
Market Reaction
The Fed Chair assured markets that it is not the
institution’s goal to surprise investors.
Before Powell’s remarks on Tuesday, the financial markets
were treading water. Then, during his speech, the leading benchmark indexes rallied
as the Fed chief noted that inflation was declining.
However, stocks turned negative again when investors
heard Powell confirm that more rate hikes would likely happen, iterating what
was noted in last week’s Federal
Open Market Committee (FOMC) policy
statement.
“If we continue to get, for example, strong labor market
reports or higher inflation reports, it may well be the case that we have to do
more and raise rates more than is priced in,” he explained.
“I think there’s been an expectation that it’ll go away
quickly and painlessly, and I don’t think that’s at all guaranteed. That’s not
the base case,” Powell added. “The base case is … that it will take some time.
And we’ll have to do more rate increases, and then we’ll have to look around to
see whether we’ve done enough.”
The U.S. economy added 517,000 new jobs in January,
topping market estimates. The unemployment rate also fell to 3.4 percent.
The Dow Jones Industrial Average tumbled around 0.6
percent, the S&P 500 dropped roughly 0.4 percent, and the Nasdaq Composite
Index slipped 0.25 percent.
Treasurys were mixed, with the benchmark 10-year yield up
more than 3 basis points to 3.66 percent.
The U.S. Dollar Index (DXY), which measures the greenback
against a basket of currencies, erased its losses and traded flat, hovering at
103.60.
The next FOMC policy meeting will take place on March 21
and 22. It is widely expected that officials will raise the benchmark fed funds
rate by 25 basis points to a range of 4.75 percent and 5.00 percent, according
to the CME
Group FedWatch Tool.
Debt Ceiling
When asked about the U.S. debt ceiling, Powell asserted
that this is a fiscal issue that is the responsibility of Congress and the
Treasury Department.
Powell hoped that Congress would vote to raise the debt
ceiling so the federal government could pay all of its bills. But he noted that
the central bank does not possess the “ability to shield the financial markets
or the economy from the consequences” of raising the debt limit.
Last month, the U.S. government hit its debt ceiling of
$31.4 trillion. Since then, Democrats and Republicans have been at a
standstill. The White House stated that there would be no negotiations to
increase the debt limit, but GOP lawmakers argue that it is irresponsible to
refrain from addressing Washington’s immense spending and debt levels.
Powell purported that the federal government is on an
“unsustainable fiscal path.”
“That has been the case for some time, and it’s something
we will have to deal with; it is better to deal with it sooner rather than
later,” Powell added.
Connecting the Dots:
David M. Rubenstein is
the president of the Economic Club of Washington, Joe Biden
spent Thanksgiving with him and the co-chairman for the Brookings
Institution (think tank).
Vernon E. Jordan
Jr. was president of the Economic Club of Washington and is
an honorary trustee at the Brookings Institution (think tank).
Foundation to Promote Open Society was a funder for the Brookings
Institution (think tank).
George Soros was
the chairman for the Foundation to Promote Open Society,
Donald L. Kohn is
a senior fellow at the Brookings Institution (think tank), was the
vice chairman for the Federal Reserve Board and a member of
the Federal Open Market Committee (FOMC).
Alice M. Rivlin is
a senior fellow at the Brookings Institution (think tank) and was
the vice chair for the Federal Reserve Board.
Richard C. Blum is
an honorary trustee at the Brookings Institution (think tank),
married to Senator Dianne Feinstein and an Economic Advisory
Council member for the Federal Reserve Bank of San Francisco.
Louis W. Cabot is
an honorary trustee at the Brookings Institution (think tank) and
was a director at the Federal Reserve Bank of Boston.
Susan M. Collins is
a nonresident senior fellow at the Brookings Institution (think tank)
and a director, Detroit branch for the Federal Reserve Bank of Chicago.
Glenn H. Hutchins is
a trustee at the Brookings Institution (think tank) and a director
at the Federal Reserve Bank of New York.
John C. Whitehead is
an honorary trustee at the Brookings Institution (think tank) and
was the chairman for the Federal Reserve Bank of New York.
David M. Rubenstein is co-chairman for the Brookings Institution (think tank), the president of the Economic Club of Washington, Joe Biden spent Thanksgiving with him and a co-founder & co-CEO for the Carlyle Group.
George H.W. Bush was
an adviser for the Carlyle Group.
Jerome H. Powell (Jay) was
a partner at the Carlyle Group.
John
Major was the chairman of Carlisle Europe for the Carlyle Group,
his private secretary & foreign affairs adviser was Charles D.
Powell, the prime minister for the United Kingdom and is a
co-president for the Chatham House.
Royal
Institute of International Affairs is the former name of the Chatham
House.
Queen Elizabeth
II is a patron for the Chatham House, and the queen for
the United Kingdom.
Edward J. Mathias is a managing director at the Carlyle Group, a director at the Economic Club of Washington and was a trustee at the University of Pennsylvania (DOJ Reviewing Potentially Classified Docs at Biden Center at the University of Pennsylvania).
David M.
Rubenstein is a co-founder & co-CEO for the Carlyle Group,
the president of the Economic Club of Washington, a co-chairman for
the Brookings Institution (think tank) and was a benefactor for
the Aspen Institute (think tank).
Foundation to Promote Open Society was a funder for the Brookings
Institution (think tank) and the Aspen Institute (think tank).
George Soros was the chairman for the Foundation to Promote
Open Society.
Charles D. Powell is
a trustee at the Aspen Institute (think tank), a member of
the House of Lords, Margaret Thatcher’s private
secretary & foreign affairs adviser and John Major’s private
secretary & foreign affairs adviser.
Margaret Thatcher’s
private secretary & foreign affairs adviser was Charles D. Powell,
a member of the House of Commons and the prime minister for
the United Kingdom.
Resources: Past
Research
100 Years of Government
Theft (Past Research on the Federal Reserve)
MONDAY, DECEMBER 23, 2013
https://thesteadydrip.blogspot.com/2013/12/100-years-of-government-theft.html
Bidens back at private
equity billionaire’s $20M Nantucket pad for Thanksgiving (Past Research on David Rubenstein)
https://thesteadydrip.blogspot.com/2022/11/smaller-bites-david-rubenstein.html
Bloomberg: The 5 Most
Likely Candidates to Replace Janet Yellen to Lead the Fed (Past Research on the Carlyle Group)
SUNDAY, JULY 16, 2017
https://thesteadydrip.blogspot.com/2017/07/bloomberg-5-most-likely-candidates-to.html
‘We Shall Fight on the
Beaches’: Winston Churchill Rallies the British Lion to Fight against Nazi
Tyranny (Past Research on the Carlyle Group)
SATURDAY, JUNE 6, 2015
https://thesteadydrip.blogspot.com/2015/06/we-shall-fight-on-beaches-winston.html
DOJ
Reviewing Potentially Classified Docs at Biden
Center (Connecting the
Dots: Joe Biden, Smithsonian Institution, The
University of Pennsylvania (Penn) & Soros Funding, All Networking)
MONDAY, JANUARY 9, 2023
https://thesteadydrip.blogspot.com/2023/01/doj-reviewing-potentially-classified.html
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