Inflation Huge: Jay Powell Did Blink, But It Had Nothing To Do With ‘Taper’

As usual, the focus went to the exact wrong place. In most people’s minds, the idea hammered home by the uniformly compliant financial press, it’s all about inflation and accommodative Federal Reserve policy. According to the current popular breeze, this along with Uncle Sam’s uncontrollable check-writing vigor has put the economy on course to overheating if not drastically so.

Didn’t you see last month’s gargantuan CPI?

Thus, what’s in demand is simply confirmation that the so-far reluctant monetary accommodators see the same thing. Up to this point, Jay Powell and gang have been steadfast. Whatever is happening in the CPI like the PCE Deflator, it won’t last very long (just like it didn’t last time we did this which just so happened to be last year).

This is not what the inflation narrative needs to hear. With so many real questions swirling around when true inflation would contrarily arise unambiguously, those inconsistencies becoming harder to ignore by the day, the conventional case absolutely demands Powell’s policymakers come back over to the inflation side where they both belong and had (mistakenly) been for so many years before COVID.

In strict monetary policy terms, the media went hunting for anything resembling the possibility of “taper” in the latest FOMC minutes released today (pertaining to the prior meeting held last month). This sanitized summation is hardly the place, if for no other reason than its very purpose; to make it seem like these presumably objective monetary scientists are carefully considering all available data, information, and every plausible interpretation drawn therefrom.

Given this, of course, “taper” showed up in the April minutes because the world (read: just the media) went nuts for that month’s inflation figures. Even though those latter weren’t released until this month, they were bound to be big regardless. Anticipating it, the FOMC minutes include the obligatory inflationary red meat:

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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