Member Newsletter
It’s not easy running the Fed. For years Jerome Powell got a lot of credit for navigating the U.S. economy with an unexpectedly loose monetary policy, through the COVID crisis and with a lot of “soft landing” credit during the Biden years. But through 2024 there’s been a backdraft of criticism that, having waited a bit too long to react to the inflation surge, he’s now holding the brakes too long, even after inflation has fallen pretty close to the central bank’s target rate. Last Friday’s jobs report was interpreted as providing key evidence that the Fed had in fact waited too long and that the U.S. economy now faced a real risk of recession. Today there’s a big market sell-off apparently kicked off by fears of slowing U.S. growth.
A couple quick thoughts on this.