Wall Street vs. Main Street
Earlier today, Federal Reserve Chair Jerome Powell was on the camera and though he appeared quite calm, a few of the undertones in what he was saying were quite worrisome indeed. The entire message seemed to be focused on the growing divide between Wall Street and Main Street.
Before diving into this too deep, I'd just like to say that Powell has done a great job managing expectations and keeping the markets afloat. However, the Fed's actions so far seem to have had very little affect on the broader economy. His opening sentence today was a reiteration of this fact, that the virus has had the worst impact on the poor, those that the Fed has less influence to assist.
If I interpreted his statements correctly, the message here was not to his usual audience of bankers and finance geeks but to the president and Congress, those who actually have the power to help main street. And the message was loud and clear... keep the money flowing!
This is not the time for austerity, we can think about how to pay back the money in good times. This is a fairly funny statement coming from the man who failed miserably to pay back the money last time the times were good.
One good thing, and this is not at all trivial, is that Powell pushed back hard against negative interest rates. Not extremely hard, but just the statement that the Fed is not thinking about using them is a much needed sign of sanity in these trying times.
