What Jay Powell said (in my words)…
You nincompoops. Y’all have gotten r(3) wrong. One month of data? Nah, insufficient. Pivot to lowering interest rates? Don’t make me laugh.
I sent all of my troops out to the podium to tell you this for the past 2 weeks. The most dovish of interest rate governors recently voted for 100 bps increase in interest rates. No one listened (well, actually the bond market did listen, ahem) but now I am telling you again, in a shortened period of time because your attention spam has declined, thanks TikTok.
Is there going to be pain for households and businesses? Yes, but it could be worse, which is that inflation rages out of control. And as long as the hardship doesn’t also create social revolt, we’ll need to live this some this. No, I am not telling you how much “some” is.