The Federal Reserve Bank is a terminally stupid institution. It has been caught in all manner of evil practices but it is just plain stupid as well. Jeffrey Snider has called the boys and girls at the Fed clowns. The operative word for the Fed now is "clothing". More on that down the page.

So, now Chairman Powell is saying low prices for shoes and clothing is the cause of low inflation. The frightening thing about this is that the Fed has its own charts that are clearly showing disposable income and labor share of GDP is weakening. Low real wages (adjusted for inflation) or the high cost of living through higher rents and or investments going south are all a cause of low inflation. 

Real Disposable Personal Income

Real disposable income is not doing so well. It has hit a major plateau and is declining. This is a FRED chart that Chairman Powell can look at anytime, as it is from the St Louis Fed Bank! 

House prices aren't doing so well lately. How about that as a reason clothing costs cannot be raised, Chairman Powell? 

Median House Prices

And while we know wages are going up, they are not if you count for inflation. Therefore, rents are too high. House prices are declining, but rents are at best flattening, and even the FRED Blog says there is a case to be made that rents are too high:

Rents Too High

 Allen Iverson said "Practice"! Jerome Powell says "Clothing".  I have a lot more respect for Alan Iverson than I do for Jerome Powell. Iverson was a proven pro. Powell is a part time clown. 

That doesn't mean everything he thinks is wrong. It just means that he is blaming clothing for his team's inability to perform. And that is like coach Brown blaming Iverson, the reigning MVP, for not showing up for practice when his best friend died. Powell is blaming clothing for his failures as Fed chairman. 

Well, Powell's team is losing faith in the coach:

The Federal Reserve’s influential staff seems to have lost confidence that its bosses will achieve the central bank’s 2% target, if the minutes of the Fed’s April 30-May 1 meeting are anything to go by.

And he says it is all transitory. Inflation will bounce back to 2 percent. But the charts show otherwise. I am not sure what Powell has in his bag of tricks to reverse the slowing economy. Maybe like Carrot Top, he will become the financial "King of Props".