Why do we care so much about inflation targeting in any form? Ask that question of a central banker and they will merely state the answer is self-evident before calling the police to have you arrested and thrown in jail for daring to query. Inflation targeting is central to this version of the central bank, so much so it has tossed the very idea of “full employment” into the garbage just so it can continue on with the program.
For everyone else, the issue is more practical. Think about Jay Powell’s task as he sees it: the economy is a huge mess and in order to get out of it the Federal Reserve can only offer a highly glossed, refined vision of a very hopeful and fruitful future. Fret not about today, dear laborer (and tens of millions of former laborers), there’s so much better to come – you just can’t see it now.
Take Jay’s word for it. Not only better to come, he’s saying he’s going to allow it to be downright overheated on the other side of things. Read more…..
Chart of the Day
CNBC’s “Halftime Report” team discusses what they’re investing in amid the market action as Treasury Secretary Steven Mnuchin says Nancy Pelosi refused to pass an “airlines only” stimulus package.