Blame the Federal Reserve for the tanking stock market
Ok, soš§ what in the 21st century could lead a stocšk market to the worst December since the Great Depression year of 1931?
Letās start by saying I have always liked Fed Cšhair Jay Powellās pragmatic image. I only hope I wasnāt fooled.
He has the ideal experience miāx of Washington finance and private sector, so he ought to be able to tešll the forest from the trees.
But last weekās Fed meeting was eš§ven more disastrous than the one in September.
Since the September meeting ā when the Fed hiked rates because the economy was displaying āstrong labor market conditions and a sustaiāned return š“to 2 percent inflationā ā stocks have sold off.
Then came Wednesdayās šmeeting, when the Fed hiked again despite š·all being well in the economy.
With good growth, good employment and no inflation to speak of, this hike sent the market spinning into a state of disbelief. The marketš closed down 352 points, and Thursday subtracted 464 more.
This correction is now all on thš»e Fed. It over-reached just like virtually every other academic Fed, combating Ghosts of Inflation Past that havenāt appeared in decades.
Powell needs to expand his Rolodex to include more than just policy types and start speakiā±ng with some realšø-world practitioners.
For example: FedEx CEO Fred Smith. If thereās anyone who would have a read on the pulse of the economy, heād be it. FedExās stoź§ck is down 40 percent since Septāember.
Or chat with ExxonMobil CEO Darren Woods. His shares are down 22 percent since the end of September. Oil itself is down from $76.41 a barrel on Oct. 3 to $45.88 on Dec. 20. Thatās a 40
percent drop.
I think itās time to ask what Powell is thinking.
If and when inflation rears its ugly head ā which it hasnāt done in 20-some yeaš rs ā ź¦¬a rate raise or two would eradicate it quickly.
Itās time for Powell to stop chasing ghosts.