Politics Is Jerome Powell doomed to repeat the Fed's past mistakes?
Chandler Powell Says Being Dad to Baby Grace Is the 'Greatest Gift' on Australian Father's Day
Bindi Irwin also reveals the sweet daily ritual Chandler Powell does with their 5-month-old daughter Grace Warrior "I wish with all my heart that Dad could hug my beautiful girl," Bindi continued. "It's been 15 years since he passed away. I hold on to the thought that he's her guardian angel now, watching over the most special part of my life, Grace Warrior. ❤️." Steve (aka the Crocodile Hunter) died on Sept. 4, 2006, after his heart was pierced by the barb of a stingray while filming at the Great Barrier Reef in Australia. He was 44.
It isthat those who cannot learn from history are doomed to repeat it. Jerome Powell's Federal Reserve Board would do well to heed that adage. By seeming to have learned little from both the 2008 housing and credit market bust and our painful inflationary experience in the 1970s, it risks repeating those two sorry economic episodes.
In 2009, in the aftermath of the bursting of the housing price bubble, Federal Reserve Chairman Alan Greenspan quickly went from hero to zero. He did so as the bubble's burst ushered in the Great Recession. Hauled before a congressional committee, Greenspan wasthat he should have paid more attention to the housing price bubble that formed under his watch and relied less than he did on the ability of markets to correct their excesses.
Biden facing pressure from Democrats to replace Fed chief
President Joe Biden is facing growing pressure within his Democratic party to remove Jerome Powell from the helm of the American central bank at a key moment for the US economy. Powell repeatedly stresses the need to sustain growth to ensure the economy benefits marginalized Americans, and supports a cautious approach to removing the Fed's pandemic stimulus.With the Federal Reserve trying to orchestrate a sustained recovery that will restore jobs lost during the Covid-19 pandemic without igniting inflation, Biden's decision could have lasting consequences.
Fast forward to 2021, Powell, today's Fed chairman, seems to be paying little attention to the global "everything" asset price and credit market bubble that has formed as a result of the Fed's massive bond-buying program in response to the COVID-19 pandemic. Instead, it continues to add froth to the "everything" bubble by buying $120 billion a month in U.S. Treasury bonds and in mortgage-backed securities.
Never mind that U.S. equity prices have now reached lofty levels experienced only once before in the last 100 years or that U.S. housing prices are now increasing at an 18 percent annual rate and. Never mind too that interest rate spreads on the riskiest loans, including those in the emerging markets, have dropped to close to their all-time lows, while the prices of exotic assets have reached the stratosphere.
GOP senator urges Biden to renominate Jerome Powell
Sen. Steve Daines (R-Mont.) asked President Biden to renominate Federal Reserve Chairman Jerome Powell in a Thursday letter as the White House mulls an opportunity to reshape the central bank.Daines urged Biden to renominate Powell, a Republican who former President Trump elevated to chairman and whose term leading the Fed expires in February, "[i]n order to promote continued economic stability" with the U.S still recovering from the COVID-19 pandemic.
By turning a blind eye to the bubbles that it has created, the Fed is now running the real risk of a hard economic landing next year when the current music of ultra-easy money eventually stops. This is particularly so considering that the "everything" bubble has been premised on the assumption that today's ultra-low interest rates will last forever.
In the 1970s, the U.S. experienced its worst inflation in the post-war period. It did so as the Fed kept monetary policy excessively loose and allowed the money supply to balloon in its effort to return the economy to full employment in the wake of two international oil price shocks. Soaring inflation battered the U.S. economy, and it only ended when Paul Volcker's Fed slammed the monetary policy brakes on hard through a large interest rate hike.
Fast forward to 2021, and now we have a Fed continuing to maintain ultra-low interest rates and allow the money supply to balloon in its effort to return the economy to full employment following the COVID economic and health shock. It is doing so even as globalare making a return to full employment improbable even with the easiest of monetary and fiscal policies. It is also doing so even as inflation and inflation expectations increase to their highest levels in more than a decade and as job openings skyrocket to record levels now .
On The Money: Fed officials signal move toward tapering bond purchases | New home construction falls 7 percent in July | Top Democrat unveils bill aimed at making housing more affordable
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As it did in the 1970s, the Fed keeps dismissing the supply-side problems plaguing the U.S. economy as but a transitory phenomenon. It does so even as inflation took it by surprise and as evidence keeps mounting that the global supply chain will take longer than previously anticipated to mend. Worse yet, the Fed discounts out of hand any notion that the economy could soon overheat as a result of its extraordinarily easy money policy being combined with the country's largest peace-time budget stimulus on record.
By now it is too late for the Fed to prevent a dangerous asset price and credit market bubble from forming or to spare us from an unpleasant inflationary episode. But what the Fed can and should do is dial back its excessively easy monetary policy stance with a view to preventing these problems from getting more serious. Judging by the Fed's past performance, I'm not holding my breath waiting for that to happen.
Desmond Lachman is a resident fellow at the American Enterprise Institute. He was formerly a deputy director in the International Monetary Fund's Policy Development and Review Department and the chief emerging market economic strategist at Salomon Smith Barney.
Trump pushed vote-rigging claims for weeks after his campaign found that they were nonsense, report says .
A filing in a lawsuit from a former Dominion employee showed the Trump campaign had debunked conspiracy theories about the machines in mid-November.Lawyers Sidney Powell and Lin Wood spread baseless claims that not only were Dominion's voting machines rigged and changing votes from Trump to President Joe Biden, but that the entire company was part of a vast global conspiracy involving Venezuela, China, Cuba, billionaire financier George Soros, and the late Hugo Chavez, to rig elections for left-leaning politicians.