Democrats Prepare To Unleash Hell On Fed Chair Powell For The Coming Recession
https://www.zerohedge.com/markets/democr...oming-recession
by Tyler Durden
Monday, Jul 25, 2022 - 07:15 AM

Something curious took place a month ago during Powell's semi-annual testimony before a (still-Democrat controlled) Congress: whereas it was quite clear that Biden was calling Powell and demanding an end to inflation (which the White House had unleashed with its trillions in stimmies), most other vocal Democrats, and especially the progressives, were warning the Fed Chair that there is hell to pay if the Fed's hikes push the economy into recession.

“What’s worse than high inflation and low unemployment?” asked Senator Elizabeth Warren as the Fed chief gave congressional testimony last month. “It’s high inflation and a recession with millions of people out of work.... I hope you’ll reconsider that,” she added, “before you drive this economy off a cliff.”

Which is funny, because in recent days Biden - who was adamant in "explaining" that the soaring inflation of 2022 was out of his control and was solely "Putin's price hikes" - has been taking credit for the modest dip in gasoline prices thanks to the most grotesque abuse of a Y-axis in history...

... even though as we have repeatedly made it clear the only reason any commodity prices are low, and that includes oil and gas, is because most now see a recession as inevitable...

... and yes, while gasoline prices will certainly drop during the coming recession (however briefly), it is absolutely certain that millions of people will also lose their jobs thanks to the Powell-induced recession.

Which takes us to the main event this week, when still scorching price pressures will push the Fed to raise interest rates 75 basis points on Wednesday for the second straight month at which point the economy is expected to finally crack, and as even as Bloomberg now admits catching up to what we said months ago, "the tougher it acts, the harder it gets to avoid a sharp increase in unemployment and the subsequent political fallout."

“There has been more than enough blame for inflation to go around,” said Mark Spindel, chief investment officer for MBB Capital Partners LLC. If unemployment rises, “constituents will scream and senators and House members will have to deflect blame, and that will find its way to Jay Powell.”

Powell, of course, has a dual mandate from Congress for maximum employment and price stability, and has already repeatedly admitted he got the inflation call wrong last year and were slow to react, making him a willing scapegoat for what comes next.

And what comes next is simple: with Democrats facing catastrophic losses in the November midterm elections from voters furious over Biden's (not Putin's) inflation, some are starting to warn Powell to expect consequences if rising joblessness is the cost of a Fed error. Which it already is as we recently reported and as even Goldman has admitted.-- excerpt, rest at link above --

I saw a tweet from Elizabeth Warren blaming Powell this morning.