Larry Kudlo: Federal Reserve Chairman Jay Powell gets it properly, once in a row

With all the obligatory respect for the President of the Federal Reserve, Jay Powell, I was among the most difficult critics over the past four years – as the Federal Reserve made the story of inflation completely wrongly, when they were flowing into the money and buying mainly an increase in Joe Biden with a value of $ 5 trillion in Federal spending, impotence and religion.

The Federal Reserve first denied a problem with inflation. Then, they argued that it was temporary. By the time they reached their foot on the brakes, the cat was outside the bag to 9 % of inflation.

Over the duration of Biden, prices rose by more than 20 % while wages increased much less. Thus, the rebellion of the working layer of all colors and stripes. Rebellion elected President Donald Trump.

All that was said, Jay Powell at the press conference today He was talking very reasonably, and the story appears to be correct on definitions and inflation.

As I mentioned, it may be appropriate at times to look through inflation if it will disappear quickly without a procedure by us, if it is temporary. This could be the case in the case of customs tariffs.

– Federal Reserve Chairman Jerome Powell

The most careful topic in Wall Street today is that Trump’s tariff will be inflated. They will not do that.

Powell right: any The increases in prices will be temporary.

Think about it this way. If the price of the washing machine rises due to the customs tariff, the family comes out and the device is bought anyway at a higher price, then this means that they have less money to spend on other elements.

The price of the washing machine will rise, but some prices or other prices will decrease. This may mean that the family will not buy a TV, computer, or anything else.

Therefore, one price rises, and families have less to spend on another commodity, and this other price decreases. But the total consumer price index of 80,000 elements is not changing.

This makes it temporary.

The only way that the individual price can lead to a high high inflation is if the Federal Reserve operates a printing press, or if the federal government continues in a state of spending. If this is the case, the inflation will generally rise, whether it is a tariff or not, because inflation mainly represents a critical problem.

By the way, if the Federal Reserve has managed the publications again, it will disrupt the dollar. This would raise the entire inflation index.

Now, at this stage, although the Federal Reserve does not target exchange rates or foreign exchange rates, it should be noted that the price of gold today is $ 3,050. This is a warning to the Federal Reserve – to maintain dry cash powder.

It appears that Jay Powell will actually keep the cash powder dry. As he said today, “We do not need to be in a hurry to control our position on politics.”

This feeds on: the central bank does not reduce interest rates, or increases money supply.

The Federal Reserve also announced that it will continue to reduce its detention of securities, treasury and bonds supported by mortgage, although it will soon slow down the pace of decline. But this is a good thing, because it will keep the cash width under selection, which means that the inflation rate should remain under examination.

All this indicates that the Wall Street hysteria and the liberal media on inflationary definitions are a lot of HO-HA.

So, I will revive Jay Powell – because he got it correctly. Once in a row.