JPow Speaks — Fire up the BBQ because JPow is once again getting grilled. Powell, as part of the confirmation process for his pending second term as Fed Chair, walked into the belly of the beast at around 10am yesterday armed and ready to answer all of our questions on inflation, rate hikes, balance sheet policy, labor markets, and seemingly everything that’s cause for concern with the U.S. right now. This is the financial world equivalent of Oprah interviewing Prince Harry and Meghan, so get excited.

After roughly a 2.5hr combination of praise, attacks, and questions, Powell did answer some of our most pressing questions. Let’s check the tape.

Inflation: JPow reiterated the Fed’s hard pivot from maybe transitory to maybe persistent. Powell explained that if inflation does prove persistent through 2022, “that will lead to much higher monetary policy from this.” Speaking further on this possibility for persistent inflation, Powell remarked  “That could lead to a recession and that will be bad for workers.”

Monetary Policy: What’s old is new again. JPow confirmed the Fed’s plan to continue the current pace of the tapering process with an end in March. Uncertainty remains as little on specifics of timing and number of rate hikes was discussed. What JPow did say on the subject was spoken in classically ambiguous Fed Chair speak, explaining “If we see inflation persisting at high levels, longer than expected, if we have to raise interest rates more over time, then we will.”

Balance Sheet: Like that one time you actually profited from a wildly OTM options play, the Fed doesn’t know what do do with all this money. Sure you didn’t make $9tn, but that’s what the Fed’s looking at. JPow hinted at the desire / need for reductions, but had no solid plan on how to go about that.

Labor Market: A “soft landing”, as opposed to a recession, was the phrase used to describe how the Central Bank Chair sees monetary policy impacting the labor market. Economists are particularly worried that these ensuing rate hikes will have negative effects on the labor market. In response, Powell stated that current policy plans “should not have negative effects on the labor market.” Nice and simple.

So there you go. Not a lot of questions answered, but also not a lot of questioned answers. It seems Congress is largely behind the idea of JPow getting another 4 years in office. Remember, this was a confirmation hearing at the end of the day, not a state of the economy chat. Powell’s term expires next month, but it looks like we’re just getting started. 

WTF IRS — The Internal Revenue Service, aka the IRS, aka the worst thing on Earth, has announced that this coming tax season, the world’s worst agency plans to be even less attentive and helpful than it historically has been. I didn’t even realize this was possible, but nonetheless, a release earlier in the week confirmed this fact. Get excited!

Like most workplaces across the U.S. right now, the IRS is struggling with office closures and staffing issues. But specific to the nation’s tax collector, the problem is even more magnified by added complexities to the nation’s tax code implemented over the past few years. So the work is more complicated and there are less workers to actually do said work, this is gonna work out great.

Anyway, it’s already clear the issue is taking its toll. Usually, the IRS enters a new year with about 1 million pieces of backlogged work, but this year, the agency has pegged that figure at the precise and on brand figure of “several million.” Moreover, the agency made clear it will be even harder to reach IRS employees by phone during tax season, meaning you’ll get to wait even longer for that torturous phone call no one wants to have but you may be legally required to make.

If tax season wasn’t fun enough last year, just wait, I’m sure this year won’t disappoint. Expect delays in your tax returns and basically everything else, but please don’t accidentally end up in jail.

ManBearPig, Minus the Bear — The South Park created monster is about 2/3 of the way to becoming reality. This past Friday, a 57 year old Maryland man with a life-threatening heart condition received a brand new heart that just so happened to be created in a genetically modified pig.

You read that right. David Bennet Sr. has inside of his body a heart from a pig, and it’s working. The procedure and positive outcome was a first of its kind that provides groundbreaking evidence of the potential to dramatically improve the world of organ transplants. Having the ability to grow organs in animals and laboratories would be a game changer to the waitlists and other troubles that face the over 40,000 Americans per year that receive organ transplants.

Saying that gene editing and modification is going to cause massive shake ups in the medical industry would be the understatement of the century. Believe it or not, receiving a heart from a pig is just the beginning. Sh*ts about to get weird.