Powell dances around border politics
Chairman of the Federal Reserve System Jerome Powell He will return to Parliament House on Wednesday to make his submission to Parliament’s biannual inquiry into the central bank, which asks many questions and answers few.
The conflation of the relevant and the marginal is neither better nor worse than typical, and reflects the broader cacophony that characterizes our public discourse. Mr. Powell convincingly executed the requisite evasive pirouette in pursuit of policymakers who meandered far away from concerns about monetary policy and into areas more suited to public debate than economic conferences.
In an interesting interlude from the expected script, Mr. Powell flatly refused to defend the establishment’s view that immigration is a boon to the economy and that more immigration is even better. The Fed chairman asked: Congresswoman Sylvia Garcia (D-TX) to explain her point of view Immigration has “fueled our country’s growth.” He pointed to a Congressional Budget Office (CBO) report that claims a surge in immigration to the United States will boost the economy by $7 trillion over the next decade.
It would have been easy enough for Powell Support the CBO report. Instead, he made more measured statements. Although he accepted the arithmetical truism that more workers means more growth, he cleverly avoided making any normative judgments about such outcomes.
“It’s just arithmetic. “As we add millions more people to the economy and get a percentage of them working, output will increase even more,” Powell said, adding that the Fed will not be able to comment or make decisions on immigration policy. He added that he had not.
Rep. Garcia pursued further questions. “I’m simply asking whether you agree that the surge in immigration contributes to our strong workforce and that we need it,” she said.
Mr. Powell replied that it had happened last year. increase in labor force This is due to both labor force participation and increased immigration. But was it necessary? “I’m not saying, directly or indirectly, that anything needs to happen in the future of policy,” Powell said.
In other words, far from praising the surge in immigration as necessary or desirable, Mr. Powell kept his comments squarely within the realm of economic observation rather than policy prescriptions.
Fed still needs more confidence
If we look at the core of the problem, Interest levelAlthough nothing appears to have changed since Chairman Powell’s last press conference in January, this in itself was a message: The Fed is requesting a more robust data table before considering changes to its current interest rate scheme. There is.
For those speculating about interest rate adjustments, the resulting inference was obvious. This means that changes are not going to happen right away and you will have to readjust your expectations further into the future.Latest Recruitment/turnover rate survey (JOLTS) did nothing to shake this outlook and portrayed the labor market as balanced.
federal reserve Governor Chris Waller He recently claimed there was no urgency to adjust interest rates. On Wednesday, we were able to see a common ethos in Mr. Powell’s demeanor. Powell may be a fan of jam bands, but he’s not one to be fooled by the siren song that drives them.
