This guy is really a piece of work. Fed Chairman Jerome Powell delivers remarks to the pontificating pustules at the DC Economic Club. Within his remarks, notice how Powell used the word “disinflation” to describe how prices are starting to drop in the “goods sector.”
Of course, durable goods are dropping in price, fewer consumers have any money to buy them. Yes, excess manufactured goods created by the disappearance of buyers will naturally lead to lowered prices by those who need to sell them. Our economic problem is not, and was not, ever an outcome of excessive demand for durable goods.
Our economic problem is the scale of energy price increases that are chewing through paychecks and driving up the costs of high-turn consumables like food.
Massive price increases for food, fuel, energy, electricity, home heating and natural gas eating up paychecks. There is no room for discussion about the next phone, refrigerator, or new car that might be needed. Simultaneous to ignoring this issue, Chairman Powell is giddy that wages are not rising. WATCH:
The process of bringing inflation down to the Fed’s goal of 2% over time “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,” Mr. Powell said Tuesday. “So we think we’re going to have to do further [rate] increases, and we think we’ll have to hold policy at a restrictive level for some time.” (WSJ Article)
Never has this cartoon been more apropos.
