Posted on 03/09/2023 2:54:25 AM PST by EBH
If there was one piece of advice the boss of hedge fund Citadel LLC would give to the Federal Reserve, it would be to stop talking so much.
Every time Fed chair Jay Powell opens his mouth to discuss all the progress the central bank has achieved cooling off last year’s red-hot inflation, he may actually just be making his own job harder by confusing investors with different messages.
Citadel founder Ken Griffin, the most successful hedge fund manager on Wall Street last year, urged Powell to stick to just one key talking point so as to anchor inflation expectations best and therefore minimize the collateral damage he is visiting upon the economy.
“If I could tell one thing to the chairman I would tell him to say less,” Griffin told Bloomberg on Tuesday. “The variance of the message over the last couple of weeks has been incredibly counterproductive.”
Ever since the S&P bottomed in October at 3,583 points, the stock market has rallied more than 10% on the belief an all-powerful Fed can claim victory over inflation and pivot to an easing bias that would put a floor beneath equity valuations.
This fear that investors have got ahead of fundamentals has already prompted luminaries like J.P. Morgan CEO Jamie Dimon into warning gains have been premature.
Griffin said the problem Powell faces is that interest rates are simply too blunt an instrument to surgically target bouts of inflationary in parts of the U.S. economy.
Some sectors including the real estate market—responsible for roughly a sixth of overall GDP—react with extreme sensitivity to higher borrowing costs, he explained, while others remain largely unaffected.
Unless the Fed can get ahead of inflation expectations in a meaningful way, he fears Powell will be stuck in a damaging game of catch-up...
(Excerpt) Read more at msn.com ...
Interest rates seem to be the only club Powell has left. If the government won't stop spending, the Fed cannot get things under control. In many ways, the Fed is not the problem at this juncture.
Watching several iterations and anyone notice all those empty cargo ships parked off China's coast? Anyone notice the sub-hunters off the east and Florida coast running man in the middle over those Russian nuke subs? Anyone notice those government drones tracing rail lines around Ohio, Pa, and WV? Yeah, where all these 'accidents' are happening?
Naw...didn't think so.
It helps when one finally realizes Powell’s actions are intentional, his design is anything but a healthy US economy or a secure investing environment.
A week ago, I might have agreed with you.
Now? Watching the Geo-political landscape making significant moves over the last week...? My feeling is Powell does not actually know what to do.
China is having real economic problems again. The empty cargo ships moored off their coast is as bad as it was during the height of covid. That warns badly for the global economy and inflation here in the US. It also signals that we, the US consumer, has pulled back on spending. We are not seeing it though in our western world?
Powell does need to quiet down, but investors need to get their faces out of the US economy and start looking around globally.
I have said this several times already, but the only way out of this is war. This is the reset. I am more convinced than ever the WEF was carving up their perceived winnings. Problem is though, it just might not turn out the way they expected.
What exactly is the “this” you are describing?
These hedge fund guys aren’t being dishonest, but they should come right out and explain what their vested interests are. I think they rely heavily on an investing environment with artificially low interest rates — because a lot of money that is desperate for higher returns ends up being invested in highly speculative crap that is the bread and butter of these hedge funds.
If I had my way there would be no Federal Reserve. Option #2 for me would be that the Fed wouldn't have done so much QE and low interest rates for so long. But that's for another discussion.
From a standpoint of the Fed is what it is and we have to live with it, then I'm pleased with how Powell communicates ahead of time what they're thinking. Before Powell the stock market had ginormous swings when the Fed would make official announcements. With Powell, on the official Fed announcement days the market has relatively mild swings because investors mainly know what the announcement will be.
Well, They always have the good faith and trust in the US government to fall back on. 🤑
What is Powell supposed to do? The high inflation we have is caused intentionally by government policies that the government refuses to change. Restricting energy supply and increasing energy prices, and deficit spending.
Having highly negative real interests is wrong and bad policy. But, that policy has been in place for 15 years and the markets have inflated as a result benefiting the elites. Powell has raised interest rates to be less negative, but negative they still are. He probably does not want to crush the economy, but also doesn’t want high inflation to continue or even get worse. However, interest rates don’t solve the root inflation problem: government policy.
He has raised rates the fastest in history. He’s in a tough spot, once you bring on higher unemployment, the siren call of more help from the government gets chanted.
Griffin (the billionair rich “F”) can go pound sand!>
Inflation is caused by too many dollars chasing goods & services. Cheap money creates inflation. Cheap money is money borrowed at low interest. Raise interest and you reduce money chasing goods. Mr. Griffin, what are these surgical methods you suggest for reducing inflation? I think what you're really saying is do anything but keep money cheap to keep the market propped up. Sorry! That may help you but it won't reduce inflation!
ping
“He has raised rates the fastest in history. He’s in a tough spot, once you bring on higher unemployment, the siren call of more help from the government gets chanted.”
There is v low unemployment due to millions with physical and mental disabilities from vaxxxx / boosters shots. Ed Dowd talks about this all the time. Check him out on Twitter often. I sure do! He has many video interviews out on rumble and y-Tube.
Ed Dowd spent decades on Wall Street, so also talks about economics. His disability numbers come from the insurance companies who keep these stats in general. And also because they are v concerned about paying out more and more every quarter for the disabled who are covered by them
At the end of the day, it doesn’t matter what Powell says. He can’t stop Congress from printing money.
“If the government won’t stop spending, the Fed cannot get things under control. In many ways, the Fed is not the problem at this juncture.”
Well said.
Not only messed up, but the thousands and thousands who left work because of forced vaxx protocols, never to work for a company like that ever. Lots of people are simply working under the table, gone gault, etc.
“..Well, They always have the good faith and trust in the US government to fall back on. 🤑...”
Yeah. The track record goes back a long, long way and is so exemplary; the Lakota Sioux, the Chiricahua Apache, the Bonus Army, Waco, J6 protestors and a long list of others would wholeheartedly agree. /s
And given today’s political climate, well...it’s probably best to just not go there right now.
“QUIT (STOP, REFRAIN FROM, CEASE) SPENDING MONEY UNNECESSARILY!!”
But EVERY politician NEEDS to spend money. There is no option called ‘Unnecessary’
Never has been, in my lifetime.
Unemployment rates are also low because we are in a demographic spiral where retirees aren’t being replaced with younger talent.
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