Powell’s Renewal
Jerome Powell is the Chair of the Board of Governors of the Federal Reserve System. Over the past few years, he’s steered the US economy through monetary policy decisions in hopes to keep the economy in check, chiefly, unemployment low and economic growth high. Most recently, Powell was voted to serve a second term as Federal Reserve Chairperson. He was elected by an overwhelming majority with an 80-19 vote. This comes as no surprise as Powell lead the economic fight against COVID’s ramifications as well as the current inflation crisis.
More importantly, Powell has said that getting inflation under control won’t be easy, but that there are still pathways for us to get there. Powell’s current plan seems to be to raise rates further in order to achieve minimum damage to the economy. There really is no soft landing here, with Powell himself explaining: “So a soft landing is, is really just getting back to 2% inflation while keeping the labor market strong. And it’s quite challenging to accomplish that right now, for a couple of reasons.” One of these issues is a tight labor market pushing up wages, making avoiding a recession that often follows aggressive policy tightening a challenge. Powell also said: “Our goal, of course, is to get inflation back down to 2% without having the economy go into recession, or, to put it this way, with the labor market remaining fairly strong”. Moreover, he said: “That’s what we’re trying to achieve. I think the one thing we really cannot do is fail to restore price stability, though. Nothing in the economy works, the economy doesn’t work for anybody without price stability.” What do you think of Powell’s re-election and his perspective on what to do regarding the current inflation dilemma?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
