The Most Annoying Fed Chair Ever

Yesterday’s minutes of the December FOMC offer an alternative history designed to make up for Powell’s grievous communications mis-steps. The broken covenant with markets for new statement language indicating strong data-dependency is rationalized away with arguments about the precise meaning of “expects,” “judges” and “some.” The cavalier characterization of balance sheet normalization being “on auto-pilot” is cleansed with a robust discussion about potentially maintaining higher than usual reserves, and non-reserve assets. In remarks today, he repeated his new buzz-words “patient” and “flexible,” and tried to show some humility in certain ways. He remains arrogant and tone deaf, bragging that he has “had lots of time to learn monetary economics.” He muffed a critical question about balance sheet normalization, mouthing easy platitudes and showing utter ignorance of the innovative policy discussions about it that occurred just three weeks ago at the FOMC. He’s on a leash now – but he’s still an incompetent.