Pusillanimous Powell: Pivoting Toward Subzero Junk

Pusillanimous Powell was at it again today on Capitol Hill, pivoting wildly as he took care to signal that a rate cut is still on track for the July meeting—even though by his lights the economy is in a “good place”, the unemployment rate is “close to it’s lowest level in 50 years” and “job openings are plentiful”.

Given all those good things on the Economy front and also that the Fed held the money market rate below the inflation rate for 10 years running—between April 2008 and October 2019—you’d think that prehaps finally the US economy could shed its Fed-supplied training wheels and get along without monetary “stimulus” for at least a few quarters.

But, no, the nation’s monetary central planner-in-chief espied some “risks” and “cross-currents” that warrant vigilance and that have strengthened the case for a “somewhat more accommodative monetary policy”. The latter phrase, of course, is code for a rate cut.

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