Jerome Powell has recently held a press conference following the Fed's annual Jackson Hole meeting, and his comments were interesting, not to mention immediately impactful, as they eviscerated approximately $70 billion in value from the market the following day.
In today's episode of The Higher Standard, Chris and Saied share their thoughts on Powell's remarks and the effects they may have in the days to come.
They discuss why Powell believes that, as the Fed tightens and fights to bring down inflation, higher interest rates likely will persist "for some time," and why the historical record cautions strongly against prematurely loosening policy.
Chris explains why people did not know they were in a recession in 2008, until NBER, the National Bureau of Economic Research, declared a recession almost a year later. We can look back and identify the factors that led to the Great Recession, but we're not in a position to identify those factors at the moment.
They also discuss the interesting correlations between the current housing market (with a 10.9 month supply of new houses - a healthy market sits around 4-6 months) and the time during the Great Recession, when the monthly supply of new houses was sitting around 12.
This is a show you do not want to miss! Join Chris and Saied for this fascinating conversation.
What You’ll Learn in this Show:
Powell's belief that higher interest rates likely will persist "for some time."
Why it's easy to look back and identify the factors that led to the Great Recession in 2008, but not so easy to identify them in today's market.
Interesting - and possibly worrying - correlations between the current monthly supply of new homes and that which existed during the Great Recession.