“Jay Powell really believes he can engineer a soft landing. The first thing I took away from it, the first thing that started to move the needle with the market, it dropped immediately after the first syllables dripped off his lips was acknowledging that something is working, that their handiwork is starting to have an impact. Used the word disinflation 13 times. At December meeting he used it zero.
“They’re acknowledging the all the rate hikes, unprecedented start of rate hike cycle is having an impact but then later on this not being a typical business cycle, getting around 2% without any significant, underscoring the word significant economic damage, that to me said this guy believes he can do the old triple Lindy. He can do a cartwheel, backflip, and land, he believes he will pull it off. I don’t think he said anything like that out loud. By the way, would sort of distinguished him from a Paul Volcker who gave, listen he gave us the August 26th speech at Jackson hole where he said I will be like Volcker, it means a lot of pain. For his mind, at least the way I interpreted it, maybe I can do it with minimal pain and pull off something here that is rarely done.”
[In case you don’t get the Triple Lindy reference, here it is. Pretty awesome call-out to Back to School, too. And at least the big question didn’t come in 27 parts. — Ed]
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