Sometimes you need to call out rank stupidity, and yesterday was a red letter opportunity for exactly that. Just as the market was beginning to come off its rate-cut inebriation, one of the most dangerous of all the Fed Fools, New York Fed President John Williams, let loose the insanity quoted below, and the robo-machines were off to the races. Again.
At an alleged academic conference Williams broke into a chorus of “Lower, Sooner And Longer” that was interpreted by the headline-scanning algos as code for a 50 basis point cut next week.
“First, take swift action when faced with adverse economic conditions.
Second, keep interest rates lower for longer.
And third, adapt monetary policy strategies to succeed in the context of low r-star and the ZLB.”
Well, what a farce. The Chairman of the Fed himself still claims the US economy is in a very “good place”, the Donald says it’s the Best Economy Ever, the unemployment rate is 3.7%, real GDP growth stood at 3.1% in Q1, consumer confidence is at a 10-year high and the stock indices are in the nose-bleed section of history.
So where in the world are the purported “adverse economic conditions”?