Sticky Inflation Reports Suggests the Federal Reserve Is Playing Politics With the Economy

The Fed is playing politics. Almost every new economic number coming out of Washington shows just how political the Fed decision was to launch their 50 basis point jumbo-sized rate reduction in mid-September. First came the embarrassingly outsized jobs report — no matter that its principal contributor was government linked jobs. Still, it was a big number. And big job numbers are not usually consistent with jumbo interest rate cuts from the central bank. Then, there’s today’s CPI report, which shows sticky inflation. Over the past 12 months, the topline CPI is up 2.4 percent which is 20 percent higher than the Fed’s 2 percent target. Under the hood, so-called core inflation was 3.3 percent which is 65 percent above the Fed’s 2 percent target. And, while the Harris campaign blasted Senator Vance for suggesting a dozen eggs costs $4 now — because they were really only $3.20 in August — that was still more than double from the Trump years. And, meanwhile, Breitbart’s John Carney reports that Mr. Vance was actually closer to the target than his critics, because inside the CPI report, eggs jumped 10 percent, are up 39.6 percent over the past year, and the average price of eggs is $3.82 right now. Mr. Carney calls this “Hillbilly Egg-igy.” Ha. Ha. Ha. Mr Carney: very good play on words. All this invites the question: Why did the Fed launch its uber rate cute a little over 6 weeks before the election? That’s unheard of during a presidential cycle. The Fed was being political. No matter what side of the aisle you’re on, an objective look at the numbers shows the Fed was being political. That Fed head Jay Powell went out of his way at his last press conference to deny that the central bank would ever play politics — was, in fact, another clear proof point that the Fed was indeed playing politics. There are big soft spots in the economy, particularly manufacturing and housing, which are both in recession. Consumer spending, aided by big-government stimulus, is holding up the economy.The Fed’s stated reason for their mega rate cut was supposedly a collapsing jobs market and a sure bet that the inflation rate would hit their target. Inflation is stickier, though, the Fed has not hit its 2 percent target, and the labor market is holding up very well — for whatever reason. So, Mr. Powell, in all of his wisdom, has done what the Fed is not supposed to do: interfere with the election. Trying to give the Kamala economy some last-minute juice. Literally, just before Election Day.In the world of monetary politics, Mr. Powell has just dragged the central bank to a new low.From Mr. Kudlow’s broadcast on Fox Business Network.

Sticky Inflation Reports Suggests the Federal Reserve Is Playing Politics With the Economy

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