Let’s face it. Jay Powell is a knucklehead who apparently can’t see the financial market’s nose right squarely in the front of his face.
Thus, yesterday he more or less embraced the latest Fed rationalization for bending over to Wall Street’s demands—the “insurance cut” theory. Noting that the Fed’s view of the economic outlook had suddenly turned darker, Powell averred that:
“Since then (May), the picture has changed. The cross-currents have re-emerged, with apparent progress on trade turning to greater uncertainty and with incoming data raising renewed concerns about the strength of the global economy.”
……Powell repeated that “an ounce of prevention is worth more than a pound of cure” — a hint that the Fed is moving towards embracing the argument for precautionary “insurance” cuts to interest rates.
Au Contraire!
The “cure” that Powell is talking about will do nothing for the main street economy–nor will it prolong the current wobbly 119 month old so-called recovery.
Instead, it will actually precipitate the very recession it’s ostensibly insuring against. That’s because rate cuts after 10-years of ultra easy policy do just one thing alone: The merely turbo-charge and slightly prolong the massive asset inflation on Wall Street.