Danielle DiMartino Booth on Fed's Bombshells: Inflation vs. Employment

Inflation's Freefall

• 📉 True inflation, as measured by QI Research, has fallen to 1.15%, indicating a significant deflationary trend.
• ⚠️ Despite recent increases in oil prices, which will impact gas pump prices, the overall inflation picture is one of freefall.

Fed Chair Candidate Controversy

• 🗳️ The FOMC members voted not to select Christopher Waller as the chair for the January meeting, which explains his dissent.
• 🏦 This decision keeps Waller in contention against Rick Reer, suggesting a potential shift in leadership at the Federal Reserve.
• 🤝 The vote implies a potential conflict between the Fed and Treasury Secretary Scott Besson and President Trump.

Candidate Philosophies: Waller vs. Reer

• 🏦 Christopher Waller is characterized as a true Federal Reserve independent central banker who has never made political donations.
• 💰 Rick Reer has a history of making donations to individuals considered political adversaries of the current administration.
• 💸 Reer's past avoidance of significant taxes, like Hank Paulson, raises questions about his financial dealings and potential conflicts of interest.

Shifting Fed Priorities

• 🧐 The Federal Reserve appears to be shifting its concern from employment back to inflation, despite evidence of falling inflation.
• 🛒 Consumer spending is down, with people cutting back on essentials like dog food, indicating the consumer is financially stretched.
• 📉 Private employment peaked in April, and Powell acknowledged the likelihood of lower revisions, yet the Fed is now focusing on inflation again.