Armstrong Economics Blog/Inflation Re-Posted Jun 23, 2022 by Martin Armstrong
Powell addressed Congress on Wednesday to curb inflation fears. The Fed is stuck between a rock and hard place right now as some must lose in order for the situation to improve. Not one to mince words, Sen. John Kennedy said, “We got a hell of a mess right now. You’re the most powerful man in the United States, maybe in the world.”
As I have mentioned, the Federal Reserve cannot combat inflation on its own. During his testimony, outspoken Elizabeth “Pocahontas” Warren indicated that she is utterly clueless about how government policy is damaging the economy. “Rate hikes won’t make Vladimir Putin turn his tanks around and leave Ukraine,” Warren uttered. Rate hikes also won’t prevent the US government from spending billions of dollars on a proxy war in Ukraine. “You know what’s worse than high inflation and low unemployment? It’s high inflation with a recession and millions of people out of work,” Warren stated. “I hope you consider that before you drive this economy off a cliff.”
The Biden Administration has already driven the economy off a cliff. The central bank is merely trying to heal an already injured economy with a limited medical kit. Elizabeth Warren and other “progressives” touted lockdowns and cheered as the unemployment rate rose to historical highs. They forced businesses to close, many permanently, but now suddenly seem concerned that unemployment will rise once again.
Powell admitted that rate hikes will not combat the soaring costs of groceries and gas. The Biden Administration reversed all measures that made America energy independent, and the supply chain problem is also completely out of the hands of the Fed. The situation will not improve until the US government aligns its objectives to support domestic policy, and that is something I do not foresee happening under a Democratic leader.