Powell dodging a taper tantrum may have been the easy part

Bloomberg/John Authers

Repost from 9-3-2021

graphic image of walking a tightrope between night and day

“Stock and bond markets endorsed the Fed chairman’s approach to tapering asset purchases. Inflation may still prove a real test of resolve.”

USAGOLD note: As is often the case in a John Authers’ essay, the evidence and arguments are presented and the reader is left to draw his or her own conclusions. In “Fixing a (Jackson) hole,” he centers his analysis around Powell’s speech, concludes that he “cheered the markets,” but suggests that, in reality, what the Fed is really worried about remains open to interpretation. He offers much for the thinking investor to contemplate, but ends ultimately by rekindling the inflation-deflation debate. Inflation, he says, is what preoccupies Wall Street, but “there is continuing real risk of the opposite.” He then quotes Mizuho Securities’ Steven Ricchiuto who resurrects some troubling longer-term trends that have been pushed to the back burner by recent economic data.

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