Jerome Powell is prolonging our economic agony

cointelegraph.com:

Can we all agree that the Federal Reserve has a plan to combat runaway inflation? They do. Chair Jerome Powell has all but admitted it. After tempering his comments before previous rate hikes, allowing wiggle room which gave way to market rebounds, Powell has left no bones about this one. It is necessary to wreak some havoc on the economy and put downward pressure on the labor markets and wage increases to stop the creep of inflation. Whether you buy into that logic or if you believe — like Elon Musk — that such movements could result in deflation — doesn’t matter.

All that matters is what those voting on the rate hikes believe, and there’s plenty of evidence that they won’t stop until the rate is over 4%. Wednesday’s rate increase of 75 basis points only moves us in that direction. This is the third such adjustment of 75 basis points, and we’ve been all but told that it wouldn’t be the last. While these rate hikes have been historical, they prolong the economic pain associated with them. It's time for the Fed to be brutally honest about where the economy is and where it is heading.

Jerome Powell has said that he aims to give the economy a soft landing. However, he’s also said, “Our responsibility to deliver price stability is unconditional.”

Except that the soft landing he’d like to attain is something from a science fiction novel. It is something that those following the situation don’t believe. Former Federal Reserve Bank of New York President William Dudley admitted as much, saying, “They’re going to try to avoid recession. They’re going to try to achieve a soft landing. The problem is that the room to do that is virtually non-existent at this point.”

Related: The market isn’t surging anytime soon — so get used to dark