Federal Reserve chairman Jerome Powell did a lot of tap dancing today, not easy for man standing at a lectern.
It brought to mind the best efforts of Gene Kelly (who once taught dance at a Main Street studio right here in Johnstown) and Bill “Bojangles” Robinson.
While Kelly and Robinson were tap dancers in a literal sense, Powell’s terpsichore was of the metaphorical variety, a verbal refusal to be pinned down, particularly on the topic of recessions.
What we henceforth will refer to as the R-word, because Democrats and their useful idiots insist the word cannot be uttered where voters might hear it, is a hot topic.
Janet Yellen, current Treasury Secretary and the woman who formerly had Powell’s job and helped get us into this inflationary mess with her loose-money policies, was on a Sunday talk show trying to change the definition of the R-word.
Generally speaking, and you can confirm this with a quick internet search, the technical definition of a recession is a decline in Gross Domestic Product (GDP) in two consecutive quarters.
We had a decline in Quarter 1 this year and the reports are due out for Quarter 2, which ended with the final day of June.
The Atlanta Fed’s GDP Now model, as of the time Powell was hemming and hawing, was predicting that Quarter 2 saw a GDP decline of 1.2 percent.
Acknowledging the oft-cited two-quarter decline definition for the R-word, Yellen argued that it wouldn’t be accurate in this case.
What Yellen meant is not really clear. What is clear in hindsight is that Yellen was preparing the field, so to speak, for Powell to ramble and contradict himself today during his press conference that follows Fed interest rate pronouncements, in this case yet another rise of three-quarters of a percentage point.
Many a questioner tried to get a straight comment on the R-word from Powell. They only succeeded in having him play both sides against the middle.
At one point, Powell indicated he did not think we currently are in an R-word. But not much later he said it was not the Fed’s job either to define an R-word, or to determine if we were currently suffering one.
Huh?
If it’s not your job, why feel the need to share an opinion on the R-word? A positive spin opinion it was, too.
This all falls under the category of narrative. Massage reality until it fits your message and refuse to change no matter the facts.
Markets interpreted Powell’s word salad as meaning perhaps he really does believe we’re in an R-word, or at least a rapidly slowing economy, and so the pace of further interest rate increases will slow. This caused major rises in the broad stock market averages, as well as with precious metals.
Powell also noted – correctly – that initial economic figures such as GDP reports are merely guesses and subject to re-stating down the line. So, he said, they are to be taken “with a grain of salt.”
Keep that grain-of-salt line in mind if the official government report Thursday morning shows no decline in GDP for Quarter 2 and the Biden regime rushes to every available microphone and social media site to trumpet that modest success.
I’m surprised no government flack has trotted out the old R-word definitional bromide: A recession is when your neighbor loses his job. A depression is when you lose your job.
It’s better than the nonsensical pap being spewed by the likes of Yellen or Powell.
Sam Ross Jr's site 