April Fool: New Republic, Same Mandate, New Definition.
“Fascism is Capitalism in decay.” (Vladimir Ilyich Ulyanov)
Summary:
· The US Labour market has, structurally, changed since the advent of COVID.
· The US polity and social contract have, structurally, changed since the advent of COVID.
· US economic perceptions and agency have become politically, and cognitively biased, since the advent of COVID.
· Political and cognitive biases in the US economy have corrupted, the objectivity of, the Fed’s policymaking dashboard.
· The Fed’s mission has, hence, structurally, changed, since the advent of COVID, thereby, implying Political and Fiscal capture of the central bank.
· The Fed is deploying a de facto new definition of full employment, to conceal the fact that it has been de jure Politically, and Fiscally captured and dominated, by the elected branch of the Tree of Liberty.
· Fed Governor Cook’s balance of risks disclaimer ticks the box for an, intended, policy pivot that is, allegedly, dual mandate consistent.
· If “Dictatorship” was to win the US Presidential Election de jure political and fiscal dictatorship of the Fed would logically follow.
· Chairman Powell’s Good Friday sermon-zag, evades political capture (for now) and restores a few hundred basis points of independence, and credible commitment.
Extracts
· The Boston Fed has raised a glass, half-full, to toast the new definition of (half-)full employment, by facilitating thought leadership.
· The Fed’s new definition of full employment will be “Endogenous”.
· The Fed’s new definition of financial stability risk is “Exogenous”.
(Source: the Author)
· At this point, the Fed is unlikely to ease, before a new Presidential Cycle has begun unless it is rooting for the incumbent.
(Source: the Author)