Central bankers gathered in Jackson Hole, Wyoming, this week for an annual Federal Reserve symposium and to hear a highly anticipated Friday speech by Chairman Jerome Powell as the Fed plans for how it will continue to grapple with inflation at 40-year highs and a recession kicking in ahead of the midterms.
"Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance," Powell said, actions that will "bring some pain to households and businesses." No kidding.
Powell reiterated the Fed's aim, saying "we are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2%." That means stomping on the current 8.5 percent inflation shown in July's Consumer Price Index with more interest hikes that are more aggressive in the months ahead. "We will keep at it until we are confident the job is done," Powell pledged.
Notably, Powell's awaited declarations on the state of the U.S. economy and what the Fed would be doing in response ran less than 10 minutes, far less than the half-hour speech that was expected.
Fed Chair Jerome Powell was expected to speak for 30 minutes at Jackson Hole, but ended up speaking for only a third of that time.
— Bloomberg (@business) August 26, 2022
Watch his full speech: https://t.co/zBg8H0mk6M pic.twitter.com/80ImcoAEgJ
The shortness of the Fed chair's remarks did not, however, limit their impact on American markets. Powell's words saying previous interest rate hikes are "not a place to stop or pause" shook markets and sent the Dow, Nasdaq, and S&P 500 tumbling more than two percent on Friday.
Stocks hit fresh session lows, Nasdaq slides 3% https://t.co/36hRTKpuDd pic.twitter.com/BLWkOrR9Ve
— CNBC Now (@CNBCnow) August 26, 2022
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So the Fed is going to keep hiking rates in order to further tighten the grip around the U.S. economy's windpipe as a result of the inflation that's raging under President Biden's "Build Back Better" agenda — action that has already sent the U.S. into a recession. Markets are reacting as one would expect by shedding multiple percentage points in response.
So what does Joe Biden have to say?
"The economy's looking good." That's was the president's take as he was departing the White House on Friday afternoon — before he spends another weekend at home in Delaware. "I feel good about it," Biden added of the economy his tax-and-spend policies have ruined.
Biden says "the economy's looking good" as the Dow drops 750+ points and Americans grapple with the highest inflation since the 1980s in a recession that was confirmed (again) by this week's read on Q2 GDP. pic.twitter.com/Wy4MVJSVf0
— Spencer Brown (@itsSpencerBrown) August 26, 2022
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