Weekly Economic Update 04-03-26: Case-Shiller Home Price Index; ISM Manufacturing Index; Consumer Confidence; JOLTS Report; and the March Employment Report
Fed Chair Jerome Powell's term can't end quickly enough.
The views and opinions expressed in this post are solely those of the author and do not necessarily reflect the views of the Georgia Institute of Technology or the Georgia Board of Regents.
It has been a while since I offered an edition of “stupid economic statement of the week.” Long-time readers will know that honor usually, but not always, goes to that icon of economic buffoonery, Paul Krugman. (I realize that Mr. Krugman has a Nobel Prize in economics, but that says more about the Nobel Prize committee than it does Mr. Krugman.) In any event, this week’s honor falls to Fed Chair Jerome Powell, whose mediocre term as Fed Chair is thankfully coming to an ignominious end.
Earlier this week, Chair Powell spoke to a principles of economics class at Harvard. I find that somewhat ironic because it is highly unlikely that he himself ever took a principles of economics class. In fact, all available evidence suggests he did not, and if he did, he slept through it. Remember that Powell is the first Fed Chair in 40 years without a Ph.D. in economics. Instead, he has an A.B. degree in Politics and a law degree, both of which were awarded in the 1970s. Rather than any formal economic training, he has relied on his extensive experience as a lawyer and investment banker to steer the U.S. economy. Is it any wonder that we find ourselves where we are today? Not that having a Ph.D. in economics is all that special (I speak from experience), but having some economic background should be a requirement for Fed Chair.
But I digress. In his talk this week, Powell claimed that “Quantitative Easing” (or “QE”, which was an explosion of the money supply) did not cause inflation. Specifically, he said, referring to QE, “at the very beginning, there was a thought that it would be inflationary. We have not seen that.” DO WHAT?