Biden Shops For Oil, Pay-Back Time For The Saudis, Powell Launches Tighter Policy

The “strong economy”, as Jay Powell, chairman of the Federal Reserve board, describes it, can “flourish in the face of a less accommodative monetary policy.” True, but only if that policy, already too late, is not also too little to rein in inflation. And if it is accompanied by an energy policy that does not […]

Biden Wants More Oil, Fed Wants Higher Rates, Consumers Want Relief, Economy Hums

The oil market may be a consumer’s nightmare, but it is a green’s dream come true – prices so high that consumers are forced to reduce their use of gasoline and heating oil, while the government seeks to prevent those high prices from providing oil companies with an incentive to increase supply and bring prices […]

The Fed Prepares To Play Catch-Up

When asked whether he was concerned that Billy Conn, a faster, shiftier opponent might relieve him of his heavyweight crown, the great Joe Louis is said to have responded, “He can run, but he can’t hide.” Louis knocked Conn out in the 12th round of their 15 round title fight. Inflation Will Hit You, One […]

A New Fed Tackles A New Kind Of Inflation, Hopes To Avoid New Mistakes

“Transitory” is out, “elevated” is in. QE (Quantitative Easing) is out, QT (Quantitative Tightening) is in. Negative interest rates are out. We now know what medicine the Fed has in mind for the US economy. But we can’t be certain of the efficacy of the planned doses. Cooling a red-hot economy is no walk in […]

Up, Up, and Away: Prices, Labor Costs, Interest Rates

A spectre stalks the land – inflation. Prices are rising at an annual rate of about 7 percent, the fastest in four decades. The Fed’s preferred measure clocks in at 5.8 percent in December, also the fastest since 1982. Recently reappointed Federal Reserve Board chairman Jay Powell, the adjective “transient” deleted from his vocabulary, unembarrassed […]

Salesman Joe Takes To The Road; A New Look Fed; Nixonomics Redux

Roughly two out of three Americans polled by CBS News and YouGov say the Biden administration is not doing enough about inflation. Almost as large a portion of those disapproving of the President’s performance say their opinion of him would improve if he “gets inflation down”, whereas only 24 per cent say they would think […]

Worried Titans, Stressed Workers, Happy Bankers

The world is going to heck in a handbasket, and workers are overwhelmed. But equity investors will pop the champers come year-end, and the US economy is headed for its best year in decades. That’s the news we are asked to digest this week. Here goes. Davos Titans Worry Start with the worries of the […]

Jobs, Quits, Omicron, New Normal

Making sense of the new reports released by the Bureau of Labor statistics is not easy. The BLS says employers report they created 199,000 new jobs in December, while households report that 483,000 unemployed persons found jobs. The disappointing employer report suggests a weak labor market, while the fall in the unemployment rate from 4.2% […]

Prices, Wages, Omicron: Up, Up but Not Away

Herewith a few thoughts as to what might be in store for the political economy of a beleaguered America in the coming year. Mud Still To Be Slung It is more rather than less likely that no matter which party survives the mud-slinging of the November 2022 mid-term congressional elections, the nastiness that has been […]

Powell Speaks and the Voice of the Dove is Heard in our Land

It is the best of times, it is the worst of times in the American economy, to open on an original note. The economy is booming in this best of times. The unemployment rate is low and falling, some ten million jobs await workers, wages are rising, manufacturing production is now 2 percent above pre-Covid […]