Morning Report: Awaiting Jerome Powell

Posted on August 25, 2023 by Brent Nyitray

Vital Statistics:

Stocks are higher this morning as we await Jerome Powell’s Jackson Hole speech. Bonds and MBS are down.

I haven’t seen the prepared remarks for Powell’s speech at 10:00 am. The Washington Post thinks “Powell may stop short of declaring mission accomplished. Fed officials have long said that they will not let up prematurely, and they could push even harder to snuff the remaining inflation out of the economy.”

The Boston Fed President Susan Collins said “We may need additional increments, and we may be very near a place where we can hold for a substantial amount of time,” she said in an interview with Yahoo! Finance from Jackson Hole. I do think it’s extremely likely that we will need to hold for a substantial amount of time but exactly where the peak is, I would not signal right at this point,” she said. “We may be near but we made we may need to increase a little bit further,” said Collins, who doesn’t vote on policy this year.

Former Treasury Secretary Larry Summers urged continued hawkishness in an editorial in the Washington Post. He talks about how the current path of inflation mirrors the the inflation of the 1970s.

Of course a big reason why we saw massive inflation in the 1970s was because oil went from $27 a barrel to $150 a barrel, which isn’t similar to today, at all.

We got a new Atlanta Fed GDP Now estimate yesterday, with its model seeing 5.9% GDP growth in Q3. FWIW, this number simply seems wrong considering the other economic data we are seeing. Aside from the jump associated with re-opening the economy after COVID, the last time we saw that high of a jump was in the early 80s, coming out of the severe 81-82 recession. Even during the Roaring 90s, GDP growth topped out around 5%.

Don’t forget student loan repayments start in October, and many haven’t paid a cent for 3 years. That will be a big contractionary pulse in the economy.

Filed under: Economy |

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12 Responses

  1. Brent Nyitray's avatar
    Brent Nyitray, on August 25, 2023 at 10:37 am said:

    Jonah Goldberg is maddening.

    https://thedispatch.com/podcast/remnant/he-aint-heavy-hes-brother-george/?fbclid=IwAR37PNxNFp5J_d-b67Bln5PxBOeJS1dmEbDqKfmJFx4bSydNZcM4rTpph10

    The left doesn’t believe in anything but winning, while Jonah kvetches at the right for not being gentlemanly enough.

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  2. jnc4p's avatar
    jnc4p, on August 25, 2023 at 10:46 am said:

    Effective way to return to Twitter:

    The man does know how to drive a news cycle.

    “Trump’s photo offers a rough visage, formidable and extremely serious—which is what I assume he was going for. He made an effort here. It paid off. He gave his haters nothing in the ballpark of vulnerability. At 9:38 p.m., he tweeted out the image with a link to his campaign website and a message: “NEVER SURRENDER!””

    https://www.theatlantic.com/politics/archive/2023/08/donald-trump-georgia-mug-shot-debate/675133/

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  4. ScottC's avatar
    ScottC, on August 28, 2023 at 9:16 am said:

    This doesn’t sound illegal at all!

    https://careers.nascar.com/nascar-diversity-internship/

    PROGRAM REQUIREMENTS

    Be a member of one or more of the following races/ethnic minority classifications: Black or African American, American Indian or Alaska Native, Asian, Latino or Hispanic, Native Hawaiian or Other Pacific Islander 

    Wouldn’t it have been easier and more efficient to say simply “No white people allowed”?

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