Fed Chair Powell: We need to Update Our Thinking on Liquidity Regulation

Fed Chair Jerome Powell testified in Congress today and was peppered with questions on inflation, liquidity, and bank failures.

CNBC reports Powell expects more Fed rate hikes ahead as inflation fight ‘has a long way to go’

• Federal Reserve Chairman Jerome Powell on Wednesday affirmed that more interest rate increases are likely ahead as inflation is “well above” where it should be.
• “Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” he said.
• Powell said the labor market is still tight though there are signs that conditions are loosening.

Prepared Remarks

Here are Powell’s Prepared Remarks for the Fed’s Semiannual Monetary Policy Report to the Congress

In answer to one question, Powell stated “We need to update our thinking on liquidity regulation.”

More accurately, the Fed needs to update its its thinking across the board. The Fed consists of a pack of groupthink participants who believe in an array of economic models that do not work and never did.

To get into the club, you have to think act and believe like the rest of them on inflation expectations, on the Phillips curve, and regulation.

Dear FDIC and Fed, We Need a Genuine Safekeeping Bank, Not Band-Aids

Regarding regulation, Dear FDIC and Fed, We Need a Genuine Safekeeping Bank, Not Band-Aids

Yesterday, I wrote about groupthink bias in Artificial Intelligence Is Beating the Professional Stock Pickers

Eurointelligence commented “Our hypothesis is that modern machine learning methods would outperform them [economists], and do so by a wide margin. This is quite astonishing because there is absolutely no economics input in those new forecasting methods. The winner of the stock market competition was totally ignorant of financial economics. The main reason for the relative success of the new generation of forecasting models is lack of bias.”