Bravo Kevin Warsh! He Actually Sounds Like He Means Business
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Boy, did he get that right. In his semi-annual monetary policy testimony on Capitol Hill, new Fed Chairman Kevin Warsh didn’t pull any punches. Indeed, an anti-inflation message this resolute has not been delivered by a Fed Chairman since, well, Paul Volcker 39-years ago.
“The members of our committee have no tolerance for persistently elevated inflation,” Warsh said Tuesday in testimony he’s scheduled to deliver before lawmakers at 10 a.m. “And we share a resolute commitment to restoring price stability.”
“ …….If we get policy right — and we will — the inflation surge of the last five years will be a thing of the past,”
He was dead right about the last several years. In fact, the Fed has not hit its easy-peazy 2.00% inflation target since 2017, meaning that on a cumulative basis the general price level is now far higher than the Fed’s target would indicate: Instead of being up by +17% per it target since 2017, the inflation index is actually up by nearly +32%.
Stated differently, the actual CPI (16% trimmed mean version) has risen at a 3.50% annualized rate since 2017. Accordingly, after 10 years at that rate the purchasing power of a dollar earned or saved this year would be worth just 70 cents. And that surely is not “price stability” by any plausible meaning of the word.
