STORY: :: Lisa Bernhard, Reuters
:: Brian Krawez, President, Scharf Investments
Calling Powell’s much-anticipated speech “a mix of humor and humility”, Krawez noted how Powell did not shy away from acknowledging the Fed’s “past mistakes” – namely, when the central bank called inflation “transitory” back in 2021.
“I thought it was pretty funny when he made a joke about the ‘Good Ship Transitory.’ And he pointed out what he called ‘fellow crew members’ in the room. In other words, I think he was saying, ‘Look, I and my other fellow Fed members are not the only ones that made a mistake here. But ultimately, we should get credit, because we course corrected and now we’re on a very good path towards 2% inflation.'”
Speaking with Reuters’ Lisa Bernhard, Krawez did say he disagrees with Powell’s assessment that the economy will likely achieve a so-called soft landing and avoid a recession.
“I appreciate his optimism and obviously I hope he’s right,” Krawez said. “But the fact is, the history has shown it’s very, very difficult for the Fed to stick a soft landing. It very rarely happens.”
