Yellen says the US economy is strong, with no layoffs. So explain to me again why the Fed tripled rates if home inflation wasn’t licked?

Photo above - Treasury Secretary Jane Yellen gets another honorary degree. The American people get unstoppable home inflation, and we are turning into a nation of renters and cellar dwellers

Janet Yellen – secretary of the Treasury – announces that we have arrived. At the soft landing. Without any job losses. Yeehaw! See link below.

This soft landing took place without curing inflation, apparently. Home prices continue to skyrocket. Auto insurance and home insurance rates are also going up by double digits too. Practically the only good news is gasoline prices. And the US government can’t claim any responsibility for that . There’s a worldwide glut of oil. Even the Saudi’s have thrown in the towel and are no longer trying to cut production. My guess is that energy sanctions on Russia are being ignored too.

So if tripling the Fed Funds rate DIDN’T lick inflation, and had zero impact on employment, exactly why were we subjected to it? Is this just a 2-year mistake?

In any case, the Fed is poised to cut rates. By at least 25 bp. The markets are expecting 50. But the DJIA just had its worst week of the 2024. Is Wall Street demanding a bigger rate cut? Doubting that the rate cut promise – made 3 times already in 2024 – will be kept this time? Fearing the election results? In any case, the next Fed Meeting is exactly 7 days after the Kamala v. Trump Tuesday TV show. Are there any cynics like me out there who see cause and effect links between the election and rate cuts? I've been predicting all year that rates wouldn't be cut until we were on the verge of the election.

Irrespective of last week's DJIA result, September and October are notoriously bad months for stock market returns. Especially in an election year. So you can’t blame Kamala, or Trump, or even Janet Yellen, the 78-year-old dowager-empress of the Treasury. Fed Chairman Jerome Powell owns interest rates. Janet’s only notable task over the past 2 years was to call a bunch of corporate execs and urge THEM to call their senators and have them vote for the national debt ceiling increase. As if the national debt wasn’t a principal cause of inflation. Too many dollars sloshing around in the economy. Treasury Bill money, borrowed from China, Saudi Arabia, and US Banks which are legally required to hold Trillions of treasuries on their balance sheets.

No problem though. We’re going to have a soft landing. Probably. If Janet is right, then inflation doesn’t matter, the national debt doesn’t matter, and Kamala sending taxes and spending to the moon won’t matter. Or Trump cutting taxes, if HE gets to the White House. Nothing matters. There is no cause and effect. John Maynard Keynes, Milton Friedman, and Adam Smith – you are hereby consigned to the dustbin of history. Everything these guys ever wrote is evidently completely wrong. Colleges should just fire all their economics professors, and in fact stop even offering this as a course major. Because there is no cause and effect.

I’m just sayin’ . . .

Yellen says U.S. economy remains solid, on path to 'soft landing' with no meaningful layoffs (msn.com)