MUST READ / MUST Watch: JPow's Comments At The Economic Club Of Washington, DC -- July 15, 2024

Locator: 48140JPOW.

Wow, wow, wow -- JPow at The Economic Club of Washington, DC --interview incredibly good. Anyone that missed this interview missed one of the best interviews I've ever heard on economics.

JPow was very, very freewheeling -- the interviewer was incredible. The interviewer was a doppelgänger for Leo G Carroll and was just as pithy and astute as the latter was in his Hitchcock movies. I'm thinking North By Northwest. 

JPow's  explanation of "transitory" was great. Great, great explanation.  Agree 1000%.

Just an incredible interview.

I'm sure the whole interview will be available later on CNBC or YouTube. Hopefully. A must watch. CNBC has a short clip.

Early on, JPow made it clear he was not going to talk about the market, future meetings, future changes in the "Fed rate," etc.

And then, less than a minute later he sent a very, very strong signal about the likelihood of a rate cut in September, if not July, 2024. Huge, huge signal. The "market" didn't catch the signal! Wow! Movers and shakers asleep at the wheel. It will be interesting if the CNBC panelists / anchors caught the signal. My hunch: unless JPow says something even more newsworthy, his comments / signaling will be the headline story.

Inflation target: 2%. That's the global-agreed-upon number set some years ago. He very clearly said that 2% is the "goal" set by the global community, but, he said very clearly, that a previous Fed chairman said if one waits until "we" get to 2% to cut rates that will be too late.

Employment target: not as amenable to a single number. Completely avoided the question.

Does JPow think we should eventually get back to "free money?" He said that was a very, very unusual period. Today, 5.3% is restrictive, but not particularly restrictive. The neutral rate is probably higher than the "free money" era. JPow suggests the Fed rate won't (ever) get back to "free money." 

That last statement / answer will provide huge information for those interested in "my favorite chart."

JPow suggests he's looking for a Goldilocks environment for both equity investors and those interested in bonds and Treasuries. That will make my wife happy.

An absolute pleasure to hear.