by David Haggith
GoldSeek
In this weekend’s Deeper Dive, I dug into the many ways in which Powell’s words show a strong bias toward rate cuts that is likely to cause him to treat rising inflation like it is only transitory. That means the Fed may be as likely to let the growth in inflation go until it, again, becomes so hot it is hard to take back down. Because we never learn!
One example I gave was how Powell acknowledged January’s inflation was a lot hotter than the Fed would like to see and that February’s was climbing, though not as intensely, yet said both were likely to be “seasonal problems.” I gave a number of other examples where he was leaning too hard toward the returning rise of inflation being something that will, in his view, likely take care of itself. He admitted the Fed needs to be vigilant for the opposite prospect, as it waits to see if inflation takes care of itself … just in case the Fed is wrong.