Backstory

As I watch the market today, and think about what has changed, I am drawn back to October 21, 2021, kind of the date when the Jerome Powell probably started to realize he had screwed up on by providing way too much stimulus, and had continued it for way too long, maybe 14 months too long.

But that is only half of the story. Jerome now has to figure out how to bring this inflation surge to a halt. That is a tough call, the last thing he wants is to have his portrait moved from the Board Room wall to over the urinals in the Fed men’s room, next to Herbert Hoovers. So, this is an ego story, Jerome is no Paul Volker, Jerome sees himself as a prestigious banker, even above the studious Ben Bernanke. We have to let this play out, but hardball is not his first choice.