A preview of tomorrow’s Fed Chairman Powell House testimony
Addendum: The written testimony released at 8:30 EST this morning, while not a commitment to a change in the policy rate at the July 31st meeting, is a clear indication that the bias is to cut rates 25bp. This testimony marks an a subtle though important change in communication. Chair Yellen met only reluctantly with members of Congress and preferred to use speeches to economists to communicate policy inflection points. Chairman Powell reportedly is setting records for trips to Capitol Hill. We don’t believe any federal government agency should have complete discretion, particularly not one with the powers of the Federal Reserve. So, from a political theory perspective Chairman Powell’s process is preferable. The practical near term implications of the Powell process, is to make these testimonies more important than was the case during the prior Fed regime.
Barry C. Knapp
Managing Partner
Ironsides Macroeconomics LLC
908-821-7584
https://www.linkedin.com/in/barry-c-knapp/
@barryknapp