Powell’s Latest Pivot Won’t Be His Last

It was an unambiguously dovish Fed Chair Powell who described the Fed’s intentions for US monetary policy at the Jackson Hole gathering of global central bankers on Friday. In our opinion, he was too dovish for this point in the economic cycle. After all, successful execution of the Fed’s dual mandate basically has been achieved: Inflation is headed on autopilot down to the 2.0% target (thanks to solid productivity gains) and unemployment remains low. Why tamper with success? Powell’s pivot to dovishness assured the financial markets that they were right to expect more easing after the widely anticipated September rate cut. But if the labor market remains resilient or inflation reheats, Powell likely will have to pivot again. … And Dr. Ed favorably reviews “Young Woman And The Sea” (+++).