Powell Throws in the Towel on Transitory

                                                           

Sic transit gloria mundi. Those words were spoken three times at every papal coronation for around five and a half centuries. The idea was to remind the newly selected Supreme Pontiff...      November 30, 2021   Today's Top Stories From the Breitbart News Desk Sic transit gloria mundi. Those words were spoken three times at every papal coronation for around five and a half centuries. The idea was to remind the newly selected Supreme Pontiff and those in attendance of the transitory nature of life and honors in this world. Thus passes worldly glory. This now-forgotten ceremony, dropped from the official proceedings back in the 1960s, was brought to mind in the unlikely venue of a Senate Banking Committee hearing. Sen. Pat Toomey (R-PA), the ranking member on the panel, began his questioning of Fed Chairman Jerome Powell by pointing out that inflation had been running above the Fed's target for quite some time now and was accelerating rather than slowing down. "I know you believe this is transitory. But everything is transitory. Life is transitory. How long does inflation have to run above your target before the Fed decides maybe it's not so transitory?" Toomey asked, perhaps recalling something from his Catholic upbringing. Much to everyone's surprise, Powell agreed. The Fed's new test for hitting its inflation target on average over time has "absolutely been met now," Powell said. Even more surprising: Powell agreed that it was time for transitory to be dropped from the lexicon. "So I think the word 'transitory' has different meanings to different people. To many it carries a sense of 'short-lived.' We tend to use it to mean that it won't leave a permanent mark in the form of higher inflation," Powell said. "I think it's probably a good time to retire and try to explain more clearly what we mean." And so transitory itself has turned out to be transitory. Powell went on to indicate that the Fed would likely be considering a faster pace to the wind-down of its asset purchases announced earlier this month. Under the original pace, the Fed would have wrapped up its balance sheet expansion in June 2022, which would have set the stage for the first Fed rate hike sometime that summer. Now it appears that it could come earlier. This should be a humbling experience for Powell, who was telling us as recently as August that inflation would be temporary because it was narrow, the extreme price moves in some items were moderating, wages weren't going up by much, inflation expectations were well anchored, and global deflationary forces would soon tamp down pricing pressures. Of course, we all know what happened next. Narrow inflation became widespread; instead of extreme price moves fading, they shifted from product to product; wages are rising; inflation expectations are at the highest levels in decades; and inflation has spread around the globe. It turns out that it was the supposedly transitory factors that were themselves transitory. Before anyone convinces you that none of this was foreseeable, we'll remind you of our July 15th newsletter. "The combination of increased demand, constrained supply, and an equity-oriented central bank could push inflation higher for quite some time," we explained. Nothing is guaranteed, of course. But we warned that there was a significant chance that "a high rate of inflation will stick around longer than the chorus of Yellen-Powell would lead you to expect." So long, transitory. We wish we could say it was fun while it lasted; but, frankly, your presence proved too expensive to be fully enjoyable. – Alex Marlow & John Carney Breitbart News Network     TOP STORY   Powell Says It's Time to Retire The Word 'Transitory' for Inflation Federal Reserve Chair Jerome Powell said that it is time to stop using the word 'transitory' to describe the high and rising inflation that has beset the U.S. economy in the first year of the Biden presidency. Powell made the comment Tuesday in response to questions during a Senate Banking Committee hearing in Washington. Powell first used the word transitory to describe inflation this spring, when prices began to rise more than expected. At the time, Fed officials believed inflation would stay confined to a few goods that were experiencing supply chain constraints and fade over the coming months. Since then, supply chain problems have worsened and inflation has accelerated. Fed officials and most economists now see high inflation and supply chain problems lasting well into 2022. At Tuesday's hearing, Powell said that high and persistent inflation may mean it is appropriate for the Fed to speed up the tapering of its asset purchases. [Click here for more]   IN OTHER STORIES... Fed Chair Jerome Powell Pivots to Inflation Fighting Federal Reserve Chairman Jerome Powell said Tuesday that the Fed's target for inflation had been reached and that the Fed would consider accelerating the wind-down of its easy-money policies in light of persistently high inflation. The announcement marks a major pivot for Powell into an inflation-fighting mode. Until Tuesday's testimony before the Senate Banking Committee, the Fed chair had emphasized the need for the Fed to proceed slowly and cautiously to avoid hurting... [Click here for more]   Bidenflation Sends Consumer Confidence Stumbling to 9-Month Low Consumer confidence was tripped up by inflation in November and tumbled to the worst level in nine months, data released Tuesday show. The index of consumer confidence dropped to 109.5 from 111.6 in October, when confidence had risen, the Conference Board said Tuesday. This is the fourth decline in the past [Click here for more]   Report: Christmas Trees Will Cost Up to 30 Percent More this Year Americans gearing up for the holidays will face inflation at a new level when buying decorations, as inflation and the supply chain crisis are causing Christmas trees prices to skyrocket. Christmas tree prices are expected to be between ten and 30 percent more this year, for both live trees and artificial trees, in addition to having a smaller selection to choose from, according to... [Click here for more] FOLLOW

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