What If Powell Flips? - mytrbroadcast.com

The signalling event for Fed insights known as “Jackson Hole” has ended with Fed Chair Jerome Powell implying to all that listen, as vociferously as one can within decorum, that cuts are not only on the table but – everyone has now inferred it’s a definite. Everyone from Wall Street to the mainstream business/financial media are singing the praises of “Happy Days Are Here Again!”

But here’s the question no one’s asking or thinking that you should, ready?

What if Mr. Powell is imitating Mohammad Ali’s great trick known as “Rope a dope?”

Everyone forgets that the FOMC vote to raise, lower, or hold interest rates is just that – a vote of voting authorized members. Mr. Powell’s vote as being both, Chair of the Federal Reserve, as well as the FOMC, doesn’t supersede the others. He is only one vote on the panel.

So, it is entirely possible he himself could vote in the affirmative to lower rates (which would be a dissenting vote in actuality) while the majority of others vote to hold the interest rate at current levels. Do you see the picture here?

Now let me add that this is extremely rare, so rare in fact, it makes hen’s teeth plentiful in comparison. I believe only the namesake of the Fed building itself, Mr. Eccles, has ever done so. But that doesn’t mean it’s not possible. Maybe not probable, sure, but we’re talking politics here for this conversation. Why?

Because the President could gnash his teeth, pound the Resolute desk, belittle him (Mr. Powell) even more intensely across the media – and Mr. Powell and his compatriots would just laugh and laugh and…. Because that’s how politics works.

As always we shall see.

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