Jerome Powell Is Criticized For His Reaction To The Recession, Here's Why - SIMPLYSHAN.COM

Jerome Powell Is Criticized For His Reaction To The Recession, Here’s Why

The cryptocurrency market saw a major selloff due to the hawkish stance of the Federal Reserve. Several key central bank officials gave speeches, speaking on a wide range of issues. However, the more important theme was the Fed’s response to the skyrocketing level of inflation.

Susan Collins of the Boston Fed, Loretta Mester of the Cleveland Fed and Raphael Bostic of Atlanta all gave keynote speeches. Other key officials, including Fed Chairman Jerome Powell, are due to weigh in on the macro picture.

Almost all officials maintain their hawkish stance on inflation. However, many market participants are extremely unhappy with their responses. Experts believe the Fed is ignoring recession the same way it ignored early inflation.

What the Fed says about the recession

Fed officials continue to be adamant about their stance against inflation. Boston’s Susan Collins believes the Fed will need to take more drastic measures to rein in stubbornly high inflation rates. She also believes that this process will lead to job losses. Susan Collins also points out that a major economic or geopolitical event can lead to a recession.

Raphael Bostic’s reasoning is that price stability is the prerequisite for maximum long-term employment. She hopes the accompanying downturn will be modest.

Neel Kashkari of the Minnesota Federal Reserve also takes a restrictive stance. He is traditionally a figure dovish within the Fed. However, Neel Kashkari explains that the Fed will not make the mistake of cutting taxes when the economy weakens.

Raphael Bostic of Atlanta says the central bank still has a long way to go to curb inflation, which is confirmed by Lorretta Mester of Cleveland.

The Fed is being scolded

Market participants are unhappy with the Fed’s response. They think the central bank is underestimating a recession, like when it claimed that inflation was transitory.

Wharton’s Professor Jeremy Siegel gave a speech inflamed on CNBC where he said the Fed has no idea what it is doing.

To display Hide the table of contents

Leave a Comment