Powell, Yellen deliver obviously orchestrated inflation mantra

photo of Powell and Yellen shaking hands

Powell says inflation risks rising, but Fed can be ‘patient’/Christopher

Yahoo!News/Christopher Rubager/10-22-2021

“Federal Reserve Chair Jerome Powell said Friday that the tangled supply chains and shortages that have bedeviled the U.S. economy since this summer have gotten worse and will likely keep inflation elevated well into next year.”

Yellen says U.S. is not losing control of inflation
Reuters/Doina Chiacu and Michael Martina/10-24-2021

“U.S. Treasury Secretary Janet Yellen said on Sunday that the United States was not losing control of inflation, and that she expected inflation levels to return to normal by the second half of next year.”

\USAGOLD note: Although Powell and Yellen admit that inflation might be more of a problem than they’ve been letting on, they still think it will dissipate before the end of next year. As such they are likely to allow yields to remain in negative territory for some time to come – a policy Mohamed El-Erain calls the biggest monetary policy blunder in forty years. (Please see “Mystical hold of transitory tempts huge Fed error” below.) We will add that the Fed and Treasury Department have underestimated inflation from the start of this paradigm change – a position that undermines their contention now that inflation will be back to normal levels before the end of 2022. The obviously orchestrated mantra on inflation will also call to question the Fed’s supposed independence from direct political influence.

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