Courtesy of Pam Martens
Fed Chair Jerome Powell Testifying Before Senate Banking Committee, November 30, 2021
Fed Chair Jerome Powell along with Treasury Secretary Janet Yellen appeared before the Senate Banking Committee yesterday to deliver their semi-annual reports.
Approximately 34 minutes into the hearing, in response to a question from Senator Pat Toomey, Republican from Pennsylvania, Powell announced that he was retiring the word “transitory” to describe the inflationary forces that have a grip on prices in the U.S.
The stock market interpreted this to mean that Powell, who just eight days prior had become Democrat President Joe Biden’s nominee for another four years at the helm of the Fed, was now pivoting to cater to Republican inflation hawks in order to win their votes at his upcoming confirmation hearing. The Dow Jones Industrial Average quickly did a bungee dive of 402 points.
About 90 minutes into the hearing, the stock market went into a new wave of selling following Powell’s answer to an insult and question from Republican Senator John Kennedy of Louisiana. Kennedy said this:
“I realize that no one is clairvoyant but I think it’s fair to say that the experts who have been advising you about the future rate of inflation have pretty much the same credibility as those late-night psychic hotlines that you see on TV. Is the Fed considering increasing the pace of its tapering? We’ve got to get control of inflation. It’s ravaging our people.”
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