The ECB held a forum on inflation earlier today. The attendee list, quotes, and a video follow.
ECB Forum Attendees
Notable Quotes
Powell statements translate to damn the recession full speed ahead with hikes.
In contrast, Lagarde wants to move slowly despite the fact that inflation in Spain hit a record high 10 percent since being on the Euro.
YouTube Video
Real GDP in Billions of Dollars
Real GDP fell 1.6 percent in the first quarter.
More importantly, real final sales, the true bottom line measure of the economy fell 1.2 percent.
That downgrade came from the BEA today.
The Odds of Recession Starting in the "First" Quarter of 2022 Just Leaped
My comment on the downgrade was The Odds of Recession Starting in the "First" Quarter of 2022 Just Leaped
Allegedly consumers are in good shape. So why the massive inventory overhang?
"Our aim is to have growth moderate. It needs to happen," says Powell.
Let's translate that accurately: We Need a Recession.
Shocking Admission
"We understand better how little we understand about inflation,” said Powell.
For years it's been obvious the Fed does not understand inflation. The only thing shocking is Powell's admission of the obvious.
Will the Fed Overshoot?
That has been my stated position for a long time.
Today, Powell practically admitted that will happen.
Powell: “Is there a risk we would go too far? Certainly there’s a risk. The bigger mistake to make, let’s put it that way, would be to fail to restore price stability.”
Given that Fed policy works with a lag, another three-quarter point hike alone might cause an overshoot. But the Fed has penciled in many additional hikes through the end of the year.
I've Seen Enough, the US is in Recession Now, Q&A on Why
On June 22, I commented I've Seen Enough, the US is in Recession Now, Q&A on Why
Today's GDP revision adds more evidence to the recession has already started thesis. It makes a mockery of Fed talk that the "consumer is strong".
With the Q2 GDPNow estimate of RFS still at +1.7% I will stick with my estimate of a recession that started in May.
But we are one retail sales revision away from a recession that may be two-quarters deep right now (with much data for the quarter still on the way).
For a look at how the current quarter is tracking, please see GDPNow Forecast Inches Up to 0.3 Percent, But What's On the Way?
This post originated at MishTalk.Com.
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