The biggest threat to the economy right now: Jerome Powell's ego

1.30.23 - 

Gold last traded at $1,922 an ounce. Silver at $23.58 an ounce.

How one man's ego could plunge America into a recession -Business Insider

Jerome Powell was trying to save face. In November 2021, the Federal Reserve chairman was scrambling to redefine his public messaging on inflation, which had turned from a short-term pain, or in his words "transitory," into a much bigger crisis.

"I think the word 'transitory' has different meanings to different people," he said. "We tend to use it to mean that it won't leave a permanent mark in the form of higher inflation. I think it's probably a good time to retire that word."

In the 14 months since that testimony, Powell and the Fed have been on an aggressive mission to rein in prices - and reestablish their credibility as managers of the US economy. But just as their efforts have begun to produce signs of progress, Powell and the Fed face a new risk: going too far.

The Fed's ideal scenario in the months ahead is to orchestrate a so-called "soft landing," where inflation comes back down to their target level without causing a corresponding surge in unemployment or even a recession. But in order to achieve this outcome, many experts believe Powell and the Fed need to pause their aggressive interest-rate hikes.