This week, we get to listen to from Federal Reserve Chairman Jerome Powell twice – tomorrow within the Semiannual Financial Coverage Report back to Congress earlier than the Senate Banking Committee and the subsequent day within the Home Monetary Companies Committee. We will count on a collection of ineffective questions, posturing for sound bites, and self-aggrandizing speeches that fake to be questions.
That’s a disgrace as a result of proper now can be a good time to attempt to pin down Jerome Powell to reply some actual questions. A considering member of Congress ought to pose particular queries about broad topics, one thing alongside the road of those ten subjects:
12 Questions for Jerome Powell
1. No two inflationary cycles are ever precisely alike, however the 2020-2023 model appears to be particularly uncommon. How does this inflationary cycle examine to earlier value instability in america? The place is it totally different? What are the similarities?
2. We had very low rates of interest for greater than a decade – 2010 to 2020 – and inflation remained subdued. Why did costs all of a sudden enhance post-pandemic?
3. Is the FOMC making an attempt to trigger a recession?
4. If low charges didn’t trigger inflation, why do you have to count on excessive charges to carry inflation down?
5. Egg costs have skyrocketed primarily on account of avian flu; vitality costs are means up, pushed largely by the Russian invasion of Ukraine. Semiconductor shortages despatched automobile costs up; meat processing labor shortages raised beef costs. How will elevating charges assist to carry these costs down?
5. The Fed units a 2% inflation goal, and CPI rose by that in March 2021. Why did the Fed wait a full 12 months to begin elevating charges till March 2022? Shouldn’t you could have begun elevating charges sooner and extra step by step?
6. There’s a scarcity of staff throughout many industries and positions. What affect will greater charges have on corporations making an attempt to fill these positions?
7. Wages lagged inflation for a lot of the previous 4 a long time; actually, they had been DEFLATIONARY. Why are rising wages now so problematic? If that’s the solely means these corporations can appeal to new staff, what’s going to the affect of rising charges be on employment?
8. House costs have skyrocketed, however we nonetheless appear to have an inadequate provide of single-family properties on the market, which some estimate at 2-3 million properties. Given this stock difficulty, what’s going to the impact of ongoing FOMC price will increase be on the true property market? Would possibly greater charges slowdown the constructing of extra homes?
9. Within the Shopper value index, the Bureau of Labor Statistics makes use of “Homeowners Equivalency Hire” to measure housing costs. Isn’t rising FOMC charges chasing extra can be some patrons into the rental market? Isn’t the FOMC inflicting CPI inflation?
10. Why do you focus a lot on surveys of inflation expectations? Do you really consider surveys reveal something greater than what simply occurred to the surveyed?
11. Wanting on the knowledge on costs like delivery containers, oil, residence leases, and so forth. it appears to be like like inflation peaked final Summer time. How far behind actual world costs are the fashions that the Fed depends upon?
12. Why does the Fed care about inventory market costs a lot? 10% of the nation owns ~90% of shares and bonds – doesn’t that reveal the so-called wealth impact is simply correlation-based nonsense? FOLLOW UP: Why did the Fed ignore the market indicators of that the 68% rally off from the Covid lows in March 2020 by the top of that 12 months?
That’s 12+, however these reveal the sorts of questions that may really generate attention-grabbing solutions…?
