Powell Goes on the Record
This week, Jerome Powell was grilled on Capitol Hill. As Fed Chair, his job is to run ongoing systems checks on the economy and perform live maintenance and repairs by adjusting the cost of borrowing. Here’s everything he had to say!
From the outset of his testimony, Congressmen and women were on a friendly offense. No sooner than Powell had adjusted his chair, his glasses, and interest rates, was he being interrogated about a stock market bubble. The S&P 500 is hitting new highs in the longest bull run in recorded history (11 years), but the “expert” had an explanation.
Expansions are supposed to last longer than they did in the past, he said, “because we are no longer facing high and volatile inflation.” If we were, investors would be in a hurry to find higher-risk investments that offered hope of keeping up with the rising price of a loaf of bread. A little bit of inflation is a good incentive to invest, but it’s got to be kept in check. Jerome Powell assured Congress that it’s all under control. In fact, he was so confident this bull market is “sustainable” that he’s said as much on the record!
“We are the strongest country. The day of reckoning could be quite far off.” The US dollar is the world’s go-to currency during panics, so he’s right in saying that only a very big gust of wind would uproot the American economy. See any gusts out there?
You may be feeling chipper about markets now, and that’s exactly what JayPow wants. His market rallying is a brilliantly sneaky way to let markets down easy, and tell us we may not be getting any more stock-boosting interest rate cuts. However, if his testimony is the truth, the whole truth, and nothing but the truth, then will we even need any?
