I am calling it. Harris will win the election if this trend holds.
That's a...phenomenally bad reading of the tea leaves, I'll leave it at that.
First and foremost, remember Powell is a diehard Republican and has been since his Carlyle Group (yeah,
that Carlyle Group)/Treasury undersecretary days. More than that, his tenure as Fed chair was initiated by
Trump. He knows on what side his bread's buttered, his interest is in putting Republicans back in power because they're more profitable to him and his investment banker buddies than Democrats, and he's absolutely abusing his position as Fed chair to influence the election outcome.
Second, never lose sight on the fact post-Covid inflation has been largely artificial, and driven not by any excuse proffered by for-profit media but rather corporate greed, institutional investor insistence on quarterly profit growth, and to wage economic warfare against the working class in retaliation for the great resignation. Take Powell on his word when he's said consistently over the past three years the unemployment rate is the key performance indicator for when to cut rates, and the primary goal of interest rate hikes is to increase unemployment. He's saying what he means, the motive behind high interest rates is to shift the job market from the
sellers' market it has been since Covid, back to a
buyers' market (i.e. shift the balance of power from employee to employer).
With both of those things in mind, remember interest rate cuts accompany recession. The time to cut rates and hopefully achieve that "soft landing" was three months ago, when economic KPI's showed first evidence of a slowing economy. When the BLS published its jobs report revisions two weeks ago, right after the Yen-carry and OPEC unwind started, it was time to start considering
emergency rate cuts to keep the bottom from falling out of the economy. Bear in mind when that was going on, the DJIA dropped 7% from its ATH in the span of two weeks before dead cat bouncing.
The currently-speculated three quarter-point cuts over the span of six months is going to be way too little, way too late. Market volatility is already trending strongly upwards, and the underlying causes of that volatility haven't changed (and won't).
We're still on track for a serious financial crisis -- 2008 level or worse -- in late September or October. Which is perfect time for blame to fall on Biden, and by extension, Harris and the Democrats. Yes, even though the groundwork for it was laid during the Trump years, and executed by Trump appointees -- never underestimate the stupidity, myopia, and short memory span of the American voter. Jerome Powell is in a position to wield more influence over the 2024 election's outcome than any man on Earth, he has every reason to do everything in his power to ensure Republicans win, and he's already wielded that influence by simply playing coy about rate cuts and allowing rampart market speculation for three economically-critical months.
And frankly, it
will be the Biden admin's fault for not demanding Powell's head on a silver platter the nanosecond he started saying the quiet part out loud...in 2021, when this entire fucking fiasco started.
