Rock and a Hard Place - Can't imagine what's running through JPow's head when it hits the pillow these days.
Inflation is a 4-alarm fire. Groceries and other essentials are eating further and further into household budgets, which will dent discretionary consumption that the rest of the economy depends on.
At the same time, the economy is undoubtedly slowing. Tech layoffs have become a contagion, and warnings from the likes of FedEx point to languishing demand going into the all-important holiday season.
Job openings continue to outnumber the amount of available working people, which gives JPow fodder for continuing to tighten the screws. Technically, he's only responsible for price stability and maximum employment, so his bases are covered.
Stock prices and profits plummeting? Not his problem.
It's kinda like when a deer jumps in front of you on the highway. You don't want to hit the deer, but slamming on the brakes and swerving could be much worse.
It feels like a good metric for determining the best path forward is looking at what will cause the least amount of pain for the average household on Main Street. Inflation blows, but if the cost of bringing grocery bills down is a breadwinner getting laid off-not sure that's the best course of action.
A goldilocks scenario of lowered inflation along with steady growth increasingly seems like a fantasy. That's just how this sh*t works; purposely slowing an economy causes pain.
How much pain and how fast it's administered is the big question. If we get a full point rate increase at one of these upcoming meetings, look out below.