Thursday, August 25, 2022

Jackson Hole, More, "We Intend To Be Fair But Firm."

Expect more of that same old speech, "We Intend To Be Fair But Firm." These words used to explain policies are used to create an impression of stability and strength rather than detail the way forward. Many variations of this well-worn line exist. examples are, "we will move cautiously in a prudent manner" or "our actions will be data dependent." 

The real question is, where's the beef? Those expecting clarity and transparency to flow out of Jackson Hole, Wyoming will most likely be disappointed. It is likely Powell will use this closely-watched Jackson Hole speech to stress that the central bank is going to bring down the high U.S. inflation rate even if it means a recession. The crux of his message being they will do this even it if means weaker short-term growth. After parsing every word coming out of his mouth do not expect to find any answer for fixing the mess they have created.

Expect No Beef
Staying on message, central banks continue to say the return of inflation to 2% is critical to achieving maximum employment and growth on a sustained basis. The recent minutes of the Fed’s July meeting confirmed this point, but Markets have failed to take to heart what it really means if the Fed embarks on such a course. In truth, more attention will be focused on how he says this and his posturing than anything else, and expect the media to spin his words in a way that reassures us all. 

Yes, they will tell us the Fed will move forward in a "fair but firm" way. Still, as of late, more attention has been focused on the idea when things get tough the Fed will panic and quickly "pivot" and return to quantitative easing. Do not expect Powell to talk about that possibility it simply won't be discussed or confirmed. When all is said and done this will most likely be a nothing burger to which markets may or may not overreact and the world will go on while our public servants suck down their catered dinners and fine wine.  


(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)


  1. Well, the Fed chair was as usual a bit vague but he did say that they will continue to raise rates even if it causes some economic pain. As we saw yesterday, the Dow dropped 3% and the Nasdaq 4% as the overly optimistic traders who believed the Fed would "pivot" soon were scared off.
    The fact is that high inflation is here to stay for quite some time no matter what the Fed does. It will very gradually go down over time due to higher interest rates and high prices(the cure for high inflation is high inflation), but with all the trillions these fools in the Fed and Big Govt. printed up and spent, it will be years before we get back to 2% inflation. Of course they'll massage the numbers and claim it is back to 2% probably in 2024(for the presidential election), but it will actually still be around 5%. I see food prices going up 50% or more over the 2020-2025 period, along with other staples and necessities. Thanks big bankers and big govt. for once again screwing the middle class. At least a lot of white collar yuppies with high student debt will get some relief, and don't forget the Inflation Reduction Act which will surely make things better, LOL. It's all so bad that it's almost comical.

    1. Dave, I tend to agree with most of what you say but your prediction of future inflation is most likely based on past events. Sadly it may not allow enough for future stupidity on the part of the government.
      I'm really pissed off about the student debt loan forgiveness, partly because much of the money was spent on living costs such as cars, apartments, and vacations. The cost fore forgiveness is huge. One estimate of the cost to every man, woman, and child in America is $2,000 each.

  2. I tend to agree with Martin Armstrong who's been saying that inflation is not a result of Fed policy nor will raising rates make the problem go away like in the early 80's during Paul Volcker days when he wiped out inflation by tightening the credit supply.

    Our inflation appears to be a direct result of the Covid1984 lockdowns which have permanently damaged the global supply chains. Government leaders from around the world and the World Economic Forum are directly responsible for the shortages which in turn are causing prices to rise. The WEF is now convincing their young leaders to destroy farming which thankfully the Dutch have figured it out and have given their government along with the WEF, the giant middle finger.

    Here's an interview Chris Martenson did with a Dutch Opposition Group who are opposing the Gov't quest to bankrupt their farmers which will cause more food shortages and cause inflation to spiral out of control. This is why our inflation problems are being caused by Globalists who want to blowup the system, to "Build Back Better" or maybe Build Back Broken.

    1. Rod, I'm afraid you are right on many points. This time the Fed acted as 'the great enabler" which allowed the inflation problem to go global. When you add to this the stupid policies flowing from climate change activists we are screwed.

    2. No doubt the Covid policies and resulting supply chain breakdowns and shortages have contributed to price inflation. However, inflation is a result of a combination of supply *and* demand. All the money printing and low interest rates have created excessive demand which otherwise would not have been there. It's a perfect storm created by foolish govt. bureaucrats and politicians, as well as by some more nefarious folks who are carrying out the plans of the WEF.

    3. But the supply and demand issues is primarily the result of broken supply chains and shortages due to the Covid1984 lockdowns. That is what has caused this inflation and not Fed Policy. I have been seeing for quite sometime at my local supermarkets where one day there's no milk. I go back 2-3 days later and it's back on the shelf. The same with bread and other basic necessities.

      We already know that cargo ships have trouble unloading their freight in California ports.

      Then we farmers who have destroyed their crops because they couldn't get them to market. We've had food processing plants destroyed. Now the WEF wants to pretty much eliminate the farmers just so they can blowup the global system.

      The Fed isn't blameless but they are not the primary culprit of rising inflation. It is supply chain disruptions and shortages. I find myself contributing to the problem because instead of buying just one item, I now buy two or three of the same because it maybe gone the next time I go to the store.