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Clarida Hell or High Water
Credibility Problem and Disconnect
Richard Clarida on Squawk Box
Q: Is the fed data dependent or are they going to 4% come hell or high water.
Clarida Response
- I think they are going to 4% hell or high water if I had to out it into two boxes.
- Inflation is way too high. Inflation was way too high last year.
- Until, inflation comes down, the Fed is really a single mandate central bank.
- They are data dependent but the inflation data is too high. So I think they are going to at least 4%.
- I agree it’s not a great place to be in. If it was just Putin, you are right. But unfortunately the economy is out of balance now.
Clarida ducked hard questions on the Fed’s role in this mess while admitting he got the inflation picture wrong.
Clarida also supported fiscal stimulus, the last round of which was the big problem.
No one at the Fed saw this coming and they ridiculously kept kept QE going all the way to March of 2022.
So yes, the Fed has an enormous credibility problem and Powell understands that.
As a direct consequence, the Fed is highly likely to make a mistake in the opposite direction.
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Meanwhile, the big spotlight appears to be on jobs and the unemployment rate.
Strong Job Gains? Don’t Count On It!
It’s Increasingly Likely That Alleged Job Strength is a Mirage of Part Time Second Jobs
If Unemployment Levels Remain Low, How Far Can the Stock Market Decline?
Here’s the question of the day: If Unemployment Levels Remain Low, How Far Can the Stock Market Decline?
The answer isn’t pretty given The Fed is Openly Cheering the Stock Market Plunge Following Jackson Hole
This post originated at MishTalk.Com.
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Image and article originally from mishtalk.com. Read the original article here.