It seems that Powell wants to atone for his mistake of repeatedly calling inflation “transitory” for much of last year. And the chances of a fifth straight hike of that magnitude at the Fed’s December 14 meeting are also on the rise. Investors are pricing in the strong probability of a fourth consecutive three-quarters of a percentage point hike at the Fed’s next meeting on November 2.
Fed vice chair Lael Brainard admitted as much in a speech Monday, saying that “policy actions to date will have their full effect on activity in coming quarters.”
What’s more, many market experts and economists note that the rate of inflation, while still uncomfortably high, is falling and should continue to decline – but there is a noted lag effect. That could be bad news for consumers, investors and Corporate America. Jerome Powell and other members of the Federal Reserve are obsessed with choking off inflation once and for all, even if the Fed’s series of aggressive rate hikes slow the economy to a crawl.
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