{"id":442622,"date":"2022-05-06T00:40:27","date_gmt":"2022-05-05T21:40:27","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/market-panic-because-of-biden-and-powells-inflation-incoherence\/"},"modified":"2022-05-06T00:40:27","modified_gmt":"2022-05-05T21:40:27","slug":"market-panic-because-of-biden-and-powells-inflation-incoherence","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/market-panic-because-of-biden-and-powells-inflation-incoherence\/","title":{"rendered":"#Market panic because of Biden and Powell&#8217;s inflation incoherence"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a40dd1eed87f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a40dd1eed87f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/market-panic-because-of-biden-and-powells-inflation-incoherence\/#%E2%80%9CMarket_panic_because_of_Biden_and_Powells_inflation_incoherence%E2%80%9D\" >&#8220;Market panic because of Biden and Powell&#8217;s inflation incoherence&#8221;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CMarket_panic_because_of_Biden_and_Powells_inflation_incoherence%E2%80%9D\"><\/span>&#8220;Market panic because of Biden and Powell&#8217;s inflation incoherence&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<aside class=\"single__inline-module alignleft\">\n<div class=\"inline-module inline-module--columnist inline-module--author\">\n<div class=\"inline-module--author__img\">\n            <img decoding=\"async\" width=\"76\" height=\"69\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76&amp;h=69&amp;crop=1\" class=\"attachment-nyp_columnist size-nyp_columnist\" alt=\"Charles Gasparino\" loading=\"lazy\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=152 152w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=114 114w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76 76w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=38 38w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png 706w\" sizes=\"auto, (max-width: 76px) 100vw, 76px\"\/>      <\/div>\n<\/div>\n<\/aside>\n<p>Fed chairs have historically been inscrutable when talking in public, leaning on something called \u201cFedspeak.\u201d By talking in riddles, financial markets don\u2019t overreact to your every word.<\/p>\n<p>But speaking in riddles is different than <em>acting <\/em>in riddles. And that\u2019s exactly what the Biden administration and Fed chair Jerome Powell are doing.<\/p>\n<p>That\u2019s why we had wild, nearly 2,000-point swing in the Dow in two days. Up 932 on Wednesday, it closed 1,063 down on Thursday \u2014 because Powell conducts a monetary policy that <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears to have no firm mission.<\/p>\n<p>Does Powell really want to clamp down on inflation that is raging toward double digits and eating away at the incomes of working-class Americans? A couple of weeks ago he said he did, with a vengeance. Inflation is after all the most important part of the Fed\u2019s dual mandate (price stability traditionally comes before promoting economic growth). Stocks began to sell off; bond yields rose.<\/p>\n<p>Then Wednesday he revealed that it really wasn\u2019t top of mind and that he doesn\u2019t want to be too hawkish. He favors 50 basis point increases to interest rates rather than, say, 75 basis points.<\/p>\n<p>There will also be no massive unwinding of the Fed\u2019s balance sheet, which further reduces the money supply and squeezes excesses out of an inflated economy and speculative markets.<\/p>\n<p>That\u2019s because Powell now claims the inflationary threat is being overblown; the economy and the markets can remain in overdrive with just a few tweaks. Markets rallied on the \u201crelief\u201d that Powell had become a more dovish chief, who was willing to accept inflation and not do anything to disrupt asset prices.<\/p>\n<p>Something changed Thursday again, and that something is the realization among many investors that Powell doesn\u2019t have a clue. Was he downplaying inflation for financial reasons or as a political calculation for President Biden? Powell has a lousy track record in this regard. He got bullied by then-President Trump to back off interest rate increases when the economy was roaring a few years ago and the Fed had a shot at finally normalizing rates that have been kept absurdly low since the financial crisis.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/05\/dow-jones.jpg?w=1024\" alt=\"The Dow Jones has swung wildly due to Powell.\" class=\"wp-image-22159123\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/05\/dow-jones.jpg?quality=75&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/05\/dow-jones.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/05\/dow-jones.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>The Dow Jones has swung wildly due to Powell.<\/figcaption><figcaption><span class=\"credit\">REUTERS\/Andrew Kelly<\/span><\/figcaption><\/figure>\n<p>By not raising rates, he left the central bank with few monetary tools other than the sledgehammer of out-right printing of money (known as quantitive easing) when he needed it during the early days of the COVID shutdowns.<\/p>\n<p>More recently, he went all in on Biden\u2019s pandemic relief spending sprees, the trillions of fiscal stimulus Sleepy Joe tried to push through when the pandemic was largely over, and the economy was humming again.<\/p>\n<p>Some of Biden\u2019s fiscal waste got passed by Congress and thankfully some didn\u2019t, but Powell supported it nonetheless and kept the money-printing machine going full blast.<\/p>\n<p>His claim at the time: The initial spike in prices was merely transitory, he told us, and the markets could use some more juicing so people can keep buying all those meme stocks and crypto.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/05\/joe-biden-4.jpg?w=1024\" alt=\"Powell has contributed to inflation by supporting President Biden's spending.\" class=\"wp-image-22159087\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/05\/joe-biden-4.jpg?quality=75&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/05\/joe-biden-4.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/05\/joe-biden-4.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Powell has contributed to inflation by supporting President Biden\u2019s spending.<\/figcaption><figcaption><span class=\"credit\">EPA\/TING SHEN \/ POOL<\/span><\/figcaption><\/figure>\n<p>Powell, in other words, is a two-time (and possibly three-time) loser on the interest rates and gauging inflation, investors signaled Thursday, which is why they took profits on their Wednesday gains.<\/p>\n<p>Maybe the Fed will have to raise rates 75 basis points because inflation isn\u2019t abating no matter what Powell now says. After all he\u2019s been wrong before.<\/p>\n<p>Powell on Wednesday said he sees a soft landing for the economy with no stiff recession. Then he said there could be a \u201csoftish\u201d landing, whatever that means.<\/p>\n<p>The uncertainty and whipsawing markets will likely continue for some time because no one knows what to expect: The second coming of the legendary inflation hawk Paul Volcker or Powell contorting himself into the free-spending Janet Yellen<\/p>\n<p>It would be nice if he picked one or the other so investors know what to expect.\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/nypost.com\/2022\/05\/05\/market-panic-because-of-biden-and-powells-inflation-incoherence\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Market panic because of Biden and Powell&#8217;s inflation incoherence&#8221; Fed chairs have historically been inscrutable when talking in public, leaning on something called \u201cFedspeak.\u201d By talking in riddles, financial markets don\u2019t overreact to your every word. But speaking in riddles is different than acting in riddles. And that\u2019s exactly what the Biden administration and Fed&#8230;<\/p>\n","protected":false},"author":1,"featured_media":442623,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/05\/newspress-collage-22158595-1651785415973.jpg?quality=75&strip=all&1651771142&w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[128859,73977,70550,70551,78738,991,72388,70359],"class_list":["post-442622","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-5-5-22","tag-dow-jones-industrial-average","tag-federal-reserve","tag-inflation","tag-jerome-powell","tag-joe-biden","tag-stock-market","tag-stocks"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/442622","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=442622"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/442622\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/442623"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=442622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=442622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=442622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}