Lofty federal reserve chairs don’t normally get out and about among the working class stiffs whose lives they so influence. So it came as something of a surprise yesterday to see the current seat occupant – Fed Chair Jerome Powell – trucking down a street in York, Pennsylvania with his jacket slung over his shoulder, head of the Reserve Bank of Philadelphia at his side, and acting like he had somewhere to go.

Now, a Fed Chair sighting on any town’s Main Street isn’t quite as out of character as it once might have been. However ham-fisted and wrong Powell has been grappling with the economy, you can’t crack on him for being a stuck in the mud as far as being willing to chance a modern, more social media oriented approach. I mean, check this video out – DANG.

LOOK MA – NO TIE!

LOOKS LIKE JEROME POWELL IS GETTING READY TO BE A SOCIAL MEDIA INFLUENCER AFTER HE LEAVES THE FED pic.twitter.com/gzQo7KuPz2

— GURGAVIN (@gurgavin) October 2, 2023

Maybe Powell’s trying to find that’ “disconnect” everyone’s talking about and Dem strategists are puzzling over. You know – the one where #Bidenomics is verifiably wonderful but everyone who has to live with it says things suck eggs?

Christiane Amanpour
So why do polls show most Americans don’t think the economy is doing well? “There’s a really profound and peculiar disconnect going on.”“The economic data have been just surreally good. Even optimists are just stunned,” says economist@paulkrugman https://t.co/o5pYMLmjRc

— Cincigal #1 (@na52g) September 27, 2023

Powell’s at least willing to climb down in the ditches with the working slobs for an hour or two.

He was in York, where once upon a gentler time those York peppermint patties really were made, to talk to small business and manufacturing folks face to face. After a local economic council round table, they went walkabout.

On visit to York, Pa., @federalreserve Chair Jerome Powell gets earful from small-business people grappling with inflation, high interest rates, labor shortages and other challenges of post-pandemic economy. https://t.co/lPRL7LnfZ1

— 69News Business (@69NewsBusiness) October 2, 2023

The vendors and business owners still busy at the closed Central Market were expressing guarded optimism when the Fed Chair tour stopped by, but you kind of have to be that sort of person to begin with, don’t you? Or business would eat you alive by its nature.

Anyway, they were polite but firm, and I sure hope he got a clear picture of what the “disconnect” feels like from the other side of the fence.

…On a visit Monday to York, Pennsylvania, Chair Jerome Powell got an earful from a group with a decidedly different perspective: Small-business people who are grappling personally with inflation, high interest rates, labor shortages and other challenges of the post-pandemic economy.

…The businesspeople they spoke with were generally optimistic but expressed a range of concerns: They are still having trouble finding all the workers they need. Higher interest rates have discouraged some of them from expanding. And higher costs and a chronic difficulty in acquiring enough supplies have persisted.

“We were a little blind-sided by inflation,” said Julie Flinchbaugh Keene, co-owner of Flinchbaugh’s Orchard & Farm Market, who spoke to Powell and Harker at the Gather 256 coffee shop while the two Fed officials conducted a walking tour. Since the pandemic struck more than three years ago, she said, “predictability is just gone. It’s very hard to operate a business without predictability.”

Keene noted that her parents had experienced high inflation when they ran the business back in the 1980s. But the company was much smaller then and had no employees. As a result, her father said, “I don’t have any wisdom to give you.”

…During his tour of downtown York, Powell also met Jennifer Heasley, owner of Sweet Mama’s Mambo Sauce, who makes a barbecue-style sauce and owns a food stall in the York Central Market.

When asked before his visit what she would most want to tell Powell, Heasley said, “Lower interest rates.”

Heasley said she is paying a much higher rate now on her credit cards, which she sometimes uses to fund her business.

Having worked in retail, and small business at that, for over half of my working life, I know what those credit cards mean as a lifeline. If times hit a burp and you can’t pay the whole balance off every month, but you still need to put orders in or a buying office has a deal that could save your bacon in a couple months, you need to be able to jump. They give you that flexibility you need to take advantage immediately.

The problem is balances start eating you alive at 20+%.

It’s all part of that real-life “disconnect” business owners and consumers are feeling.

…But Monday offered a more intimate, face-to-face discussion between Powell and the people who have lived with rising prices and have navigated the fallout from the Fed’s rate-hiking response.

A Gallup poll last spring found that confidence in Powell, after rising alongside the Fed’s support for the economy in 2020 to a level not seen since the tenure of former Fed chief Alan Greenspan, had fallen to a record low as inflation spiked and the central bank began raising interest rates at a historic pace.

Inflation has slowed since peaking in June 2022, but that hasn’t improved a public mood that Powell said last month showed “dissatisfaction” with an economy judged to be “terrible” – in spite of rising wages, a low unemployment rate and a continuing propensity by consumers to keep spending.

Another problem Powell and Patrick heard about was getting help. Now, that might change some with people actually having to start repaying student loans, but the job numbers that hit this morning certainly don’t reflect a tight job market, and these were stunning.

U.S. job openings unexpectedly rose in August, another sign the U.S. labor market remains strong despite higher interest rates — perhaps too strong for the inflation fighters at the Federal Reserve.

American employers posted 9.6 million job openings in August, up from 8.9 million in July and the first uptick in three months, the Labor Department said Tuesday. Economists had expected only another 8.9 million vacancies. The number of layoffs and of people quitting their jobs — a sign of confidence in their prospects — were both essentially unchanged from July.

And depressing, because Powell’s answer to depressing the job openings has been repeated rate hikes, and this monster number already has them rumbling about another.

…The Fed chose not to raise rates at its last meeting Sept. 19-20. But Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said the unexpected increase in openings may keep the Fed “open to another rate hike this year.”

Loretta Mester, president of the Federal Reserve Bank of Cleveland, late Monday said that rising gas prices could thwart further progress on inflation by pushing up related costs, such as shipping and airfares, and underscored that the Fed may still hike its key rate later this year. The rate is already at a 22-year high of about 5.4%.

This is a perfect summation of #bidenomics in action.
It's also what jerome heard yesterday.
If an economy is truly strong, the last thing you want is the Federal Government competing with you for employees.
What joe is doing is not capitalism. https://t.co/HR3QNHVGje

— Frog Capital (@FrogNews) October 3, 2023

Mortgage and credit cards rates will be through the roof, and those UAW workers might as well stay on strike, because no one will be able to afford a car loan for those vehicles are going to cost.

Stocks tanked on the news – officially into the red for the year – anticipating the chaos and dampening effect of yet another rate hike, coupled with the real possibility of a recession. Even if it’s felt like we were already in one.

Stocks tumbled on Tuesday as Treasury yields hit their highest levels since 2007, raising concern higher interest rates would freeze the housing market and tip the economy into a recession.

The Dow Jones Industrial Average lost 503 points, or 1.5%, in its biggest decline since March. The S&P 500 slid 1.6% to its lowest level since June. The tech-heavy Nasdaq Composite dropped 2.1% as growth stocks saw some of the biggest losses because of the rise in rates.

With Tuesday’s losses, the Dow went into the red for the year. The broader S&P 500 is still up 9%.

I don’t know about you, but it all sounds pretty connected to me.

#Bidenomics – the gift that just keeps on taking.