Tensions escalate as Federal Reserve Chair Powell and Treasury Secretary Yellen offer conflicting narratives amidst economic turbulence, exacerbating concerns over stagflation. Powell’s dismissal of stagflation contradicts recent economic indicators, including a sharp GDP growth downgrade to 1.6% and consecutive months of surging PCE inflation.
In a puzzling turn, Yellen asserts consumer prosperity despite rising prices, a sentiment at odds with public sentiment. This discord underscores the deepening divide between policymakers and the reality faced by many.
Core PCE inflation, stagnant or rising, presents a conundrum for the Fed, potentially hindering rate cut justifications. Powell’s cautious stance reflects the uncertain path ahead, emphasizing the need for “greater confidence” before considering rate adjustments.
Meanwhile, gold’s resurgence signals growing apprehension and prompts questions about central banks’ gold reserves and currency preferences. This enigma adds another layer to the complex economic landscape, highlighting the challenges ahead for policymakers grappling with stagflation fears.
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Powell just said "I don't see the stag or the flation" in regards to stagflation.
Yesterday, Treasury Secretary Yellen said consumers are now better off despite recent price increases.
Most people disagree.
Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) May 1, 2024
warned you all
few t.co/j1PVLHZ7WH
— 🅰🅻🅴🆂🆂🅸🅾 (@AlessioUrban) May 1, 2024
SUMMARY OF FED CHAIR POWELL'S STATEMENT (5/1/24):
1. Inflation has eased but remains too high
2. Further progress on inflation is not assured and path is uncertain
3. Inflation data this year has been higher than expected
4. Rate cuts not appropriate until "greater…
— The Kobeissi Letter (@KobeissiLetter) May 1, 2024
We can end the Chair Powell press conference now.
Powell says that it is unlikely that the next move will be a hike.
The market loves that.
Also, the slower pace of balance sheet shrinking from June supporting financial system liquidity is another HUGE positive. pic.twitter.com/vSdYABQvOn
— Global Markets Investor (@GlobalMktObserv) May 1, 2024
Gold is starting to rock again.
Up $40.00
Somebody should ask Jerome Powell for his interpretation of why central banks worldwide are stockpiling gold and conducting more trade in local currencies…
That is a real question.
I should of stayed in DC for an extra day.
— Gold Telegraph ⚡ (@GoldTelegraph_) May 1, 2024
For the first time in almost a decade, McDonalds pops are no longer $1.
Joe Biden’s admin is waging war on the poor t.co/PkPhIrN8p3
— 🇺🇸Travis Media Group🇺🇸 (@TM1Politics) May 1, 2024
The changes to the Fed Minutes take an emphatically hawkish tone from the start, acknowledging the recent increase in inflation. Even the changes to the 2nd paragraph hint that in the last few months things haven't gone well for the inflation fight.
Then they go ahead and do a… pic.twitter.com/xqfme2tJwI
— Nobody Special (@JG_Nuke) May 1, 2024