Chairman Powell is Changing His “Tune”

Last week Fed Chairman Powell spoke to the Senate on Wednesday and said the Fed needs to get inflation back down to 2%. He stressed that our economy is well positioned to withstand rate hikes, although he acknowledged that the war in Ukraine and supply-chain issues increase the risk of an economic slowdown. He also argued that predicting recessions is difficult but that he doesn’t see the risk as particularly high.

Then, the very next day he spoke to the House and he seemed to change his “tune” as he a recession is “certainly a possibility.” He also said a soft landing would be “very challenging”. Can we trust what he tells us?