Yesterday at the Economic Club of Chicago, Jerome Powell doubled down on his tariff-pocalypse fetish, warning that Trump’s trade levies could spark “higher inflation and slower growth.”
Sound familiar?
In 2021, he called 9.1% inflation “transitory” while M2 money supply exploded 42%.
That delusion triggered a market rout and crushed Main Street.
Now, Powell’s playing Nostradamus again, fixating on hypothetical tariff shocks while ignoring deflationary red flags like $60/barrel oil prices.
The Fed’s job isn’t to predict trade wars – it’s to react to data. Powell’s flunking that test, again.
Powell’s April 16 speech hyped Trump’s 10-25% tariff proposals as a looming inflation bomb, claiming they’re “larger than anticipated” and could derail the Fed’s 2% target.
Sure, tariffs might bump some prices, but Powell’s acting like they’re the whole story.
Meanwhile, West Texas Intermediate crude is at $60 – multi-year lows – slashing transport and production costs.
That’s a deflationary sledgehammer, yet Powell barely nods at it.
The data screams caution, not panic.
Consumer confidence cratered to January 2021 lows in March 2025. Small-business uncertainty spiked to near-record highs in February.
First-quarter GDP growth is slowing, with consumer spending “modest” despite car sales.
These are signs of an economy wheezing, not overheating.
Yet Powell’s 4.3% interest rates, frozen since mid-2024, are squeezing harder than a bear market vise.
Trump’s Truth Social rants for rate cuts might be brash, but they’re not wrong.
Powell’s tariff obsession mirrors his 2021 blunder: betting on guesses over facts.
Back then, he ignored money supply and CPI spikes.
Now, he’s blind to oil prices and softening demand, chasing trade-war ghosts.
The Fed has tools—producer price indices, commodity trackers—to spot real inflation.
If tariffs bite, hike rates then.
Preemptively choking growth on “what-ifs” is malpractice.
History honors Fed chairs who act, not prophesize.
Volcker smashed 1980s inflation by reading the data, not tea leaves.
Powell’s stuck in model-land, leaving markets jittery—S&P 500 dropped 2% post- speech—and Main Street exposed.
Oil’s at $60, confidence is tanking, and Powell’s still dreaming of tariff-driven doom.
Ditch the guesses and drive the damn car.
Tyler Durden
Thu, 04/17/2025 – 13:20
