Powell Says Fed Doesn’t Have a Credibility Problem with the American People – Despite Gallup Poll Showing Lowest Confidence Since 2008 Financial Crisis

[Gunnar Larson]

Powell Says Fed Doesn’t Have a Credibility Problem with the American People
– Despite Gallup Poll Showing Lowest Confidence Since 2008 Financial Crisis
<https://wallstreetonparade.com/2022/05/powell-says-fed-doesnt-have-a-credibility-problem-with-the-american-people-despite-gallup-poll-showing-lowest-confidence-since-2008-financial-crisis/>

By Pam Martens <https://wallstreetonparade.com/about-3/about/>: May 5, 2022
~
[image: Federal Reserve Chair Jerome Powell]
<https://wallstreetonparade.com/wp-content/uploads/2020/03/Federal-Reserve-Chair-Jerome-Powell-ii.jpg>

Federal Reserve Chair Pro Tempore Jerome Powell

At the Fed’s press conference yesterday, Federal Reserve Chair Pro Tempore
<https://www.federalreserve.gov/newsevents/pressreleases/other20220204a.htm>
Jerome
Powell was asked by Mike McKee of Bloomberg Television a series of
questions on monetary policy which ended with this: “Are you concerned
about Fed credibility with the American people?” Powell answered the
monetary policy questions but did not directly address the credibility
issue. McKee then repeated the question, phrased as follows: “Do you think
the Fed has a credibility problem?”

Powell’s answer provides an alarming insight into with whom the Fed seeks
to maintain confidence. Powell said this:

*Powell*: No. I don’t. A good example of why would be that—so in the fourth
quarter of last year, as we started talking about tapering sooner and then
raising rates this year, you saw financial markets reacting, you know, very
appropriately. Not to bless any particular day’s measure, but the way
financial markets—you know, the forward rate curve has tightened in
response to our guidance and our actions really amplifies our policy. I
mean, it’s—monetary policy is working through expectations now to a very
large extent. We’ve only done two rate increases, but if you look at—if you
look at financial conditions, the two year [U.S. Treasury note] has—the two
year is at 280 now [2.80 percent]. In September, I think it was at 20 basis
points. And that’s all through the economy. People are feeling those higher
rates already. And so that is—that shows that the markets think that our
forward guidance is credible. And I think that’s—we want to keep it that
way.”

Instead of talking about credibility with the American people, Powell spoke
solely of “*financial markets* reacting” and how “the *markets* think that
our forward guidance is credible.”

In effect, Powell blurted out the internal mindset of the Fed: As long as
it pleases the markets and Wall Street, it has all the credibility it
thinks it needs. For how the disfigured structure of the Fed has led to its
unprecedented cronyism and a Wall Street-centric focus, see our report: These
Are the Banks that Own the New York Fed and Its Money Button
<https://wallstreetonparade.com/2019/11/these-are-the-banks-that-own-the-new-york-fed-and-its-money-button/>
.

Unfortunately, only the wealthiest 10 percent of Americans own the vast
majority of the stock market and the reality that this is really whom the
Fed is serving has made its way into the collective thinking of Americans.
The Fed’s trillions of dollars in bailouts to the miscreant megabanks on
Wall Street during and after the financial crisis of 2008, followed by its
court battles
<https://wallstreetonparade.com/2022/01/mainstream-media-has-morphed-from-battling-the-fed-in-court-in-2008-to-groveling-at-its-feet-today/>
to
keep that information a secret from the American people, did permanent
damage to the Fed’s credibility. Its 2019-2020 bailouts of the same
miscreant banks have simply cemented more bricks in the wall between the
Fed and the American people. (See here
<https://wallstreetonparade.com/2022/01/nomura-jpmorgan-and-goldman-sachs-received-a-cumulative-8-trillion-from-the-feds-emergency-repo-loans-in-fourth-quarter-of-2019/>
 and here
<https://wallstreetonparade.com/2022/03/the-feds-secret-repo-loans-another-news-blackout-and-a-french-bank-scandal/>
.)

Gallup released a survey this past Monday which showed that confidence in
the Fed’s Powell among the American people is lower than it was in Fed
Chair Ben Bernanke during the 2008 financial crisis – the worst economic
crisis since the Great Depression. In April 2008, Bernanke had a 47 percent
confidence ranking among the American people. In Gallup’s latest poll,
which was conducted April 1 through April 19 among a random sample of 1,018
American adults, Powell had only a 43 percent confidence ranking.

Before the 2008 financial crisis, the Fed had used only one method of
bailing out banks – its Discount Window – which had to be used as a
lender-of-last-resort for commercial banks, on a short-term basis and
against safe collateral. For how lawyer Rodge Cohen of Sullivan & Cromwell
changed all that, see our report: Sullivan & Cromwell’s Rodge Cohen: The
Untold Story of the Fed’s $29 Trillion Bailout
<https://wallstreetonparade.com/2019/05/sullivan-cromwells-rodge-cohen-the-untold-story-of-the-feds-29-trillion-bailout/>
.

The Fed’s trading scandal that made headlines for months last year has also
done permanent damage to the Fed’s reputation and to Powell. Numerous Fed
officials have been implicated, including Powell himself
<https://prospect.org/economy/powell-sold-more-than-million-dollars-of-stock-as-market-was-tanking/>.
But the most egregious trading conduct, that of Robert Kaplan, the former
President of the Dallas Fed, appears to be undergoing a coverup by the Fed.
The Fed will not release the dates of Kaplan’s “over $1 million” in stock
trades and S&P 500 futures, despite the fact that Kaplan was legally
required to provide those dates for the five years he served as President
of the Dallas Fed. See our report: Robert Kaplan Was Trading Like a Hedge
Fund Kingpin for Five Years while President of the Dallas Fed; a Dozen
Legal Safeguards Failed to Stop Him
<https://wallstreetonparade.com/2021/09/robert-kaplan-was-trading-like-a-hedge-fund-kingpin-for-five-years-while-president-of-the-boston-fed-a-dozen-legal-safeguards-failed-to-stop-him/>
.

The Federal Reserve is the central bank of the United States whose primary
mission is to set monetary policy. The Fed can’t fulfill that mission if it
is simultaneously attempting to placate Wall Street. There is an urgent
need for Congress to strip the Fed of its supervisory role over the Wall
Street megabanks as well as its ability to bail out the trading units
(casinos) of those same banks. No less than the national security and
economic future of the United States hangs in the balance.
-- 
*Gunnar Larson - xNY.io <http://www.xNY.io> | Bank.org <http://Bank.org>*
MSc
<https://www.unic.ac.cy/blockchain/msc-digital-currency/?utm_source=Google&utm_medium=Search&utm_campaign=MSc-Digital-Currency-North-America&utm_term=blockchain%20unic&gclid=Cj0KCQiAyJOBBhDCARIsAJG2h5ctwwMz0MRbVSk-LaYD-GMU5UgDSw7ynxbGr_a7SkaFAZzJc1-pzxEaAi4NEALw_wcB>
- Digital Currency
MBA
<https://www.unic.ac.cy/business-administration-entrepreneurship-and-innovation-mba-1-5-years-or-3-semesters/>
- Entrepreneurship and Innovation (ip)

G at xNY.io
+1-646-454-9107
New York, New York 10001
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: text/html
Size: 14934 bytes
Desc: not available
URL: <https://lists.cpunks.org/pipermail/cypherpunks/attachments/20220505/d60e0ae0/attachment.txt>