The wheels are coming off the economy and the stock market has suffered one of its worst two month sell offs in American history, but that’s not the way our esteemed Fed Chairman Jerome Powell sees things. Here are his comments from last week:
“The underlying strength of the U.S. economy is really good right now. The U.S. economy is strong, the labor market is extremely strong. It is still at very healthy levels. Retail sales numbers, the economy is strong. Consumer balance sheets are healthy. Businesses are healthy. The banks are well-capitalized. This is a strong economy.”
Now isn’t that reassuring? Never mind that the growth rate of this “strong economy” so far this year is less than one percent.
But he wasn’t done with his happy talk. When the Fed chief was asked about whether he is behind the curve on raising rates (which he clearly is), Powell had this to say:
“By the standards of central bank practices in recent years, we’ve moved about as fast as we have in several decades.”
This is a non sequitur because the reason the Fed hasn’t had big rate hikes “for several decades,” Jay, is because we haven’t had to combat eight percent inflation for three decades.
Powell’s lame steps to bring down inflation reminds us of one of our favorite old jokes. What did the snail say when he climbed on the back of the tortoise?