Warren Confronts Powell on Capitol Hill

If you have been wondering when the stock market would notice that the economy is slowing, rising energy prices are creating a risk of stagflation, inflation is still running above expectations, and Federal Reserve officials are preparing to slow down their bond market shopping spree, you can finally stop. That was today.

Bond yields closed out the day decidedly higher, with the 10-year yield above 1.50 percent, at their highest level in months. Oil at one point topped $80 a barrel, its highest intra-day level in 3 years. Natural gas contracts for October delivery rose to their highest level in 7 years.

That dragged stocks down, especially the big tech stocks. The Nasdaq Composite fell 2.83 percent. Shares of Alphabet dropped 3.72 percent, Apple shares lost 2.38 percent, Facebook’s declined 3.66 percent, and Microsoft shares fell 3.62 percent. Chipmaker Nvidia’s shares were off by 4.44, and AMD shares dropped 6.14 percent. Ten out of eleven sectors of the S&P were red for the day, with energy green for obvious reasons.

On Capitol Hill today, Sen. Elizabeth Warren (D-MA) ambushed Fed chair Jay Powell in a hearing supposedly about the progress of the Federal Reserve and U.S. Treasury’s pandemic relief efforts. After briefly grilling Powell on changes to bank supervision rules, Warren declared that Powell is a “dangerous man” and announced that she would oppose his renomination to chair the Fed.

Powell’s term is up in February next year. President Joe Biden is expected to make an announcement about whether he will nominate Powell to a second term any day now. So Warren has obviously decided to go public with her misgivings, which appear to be centered around the allegation that Powell is too friendly with Wall Street. Critics of Powell on the right, many of whom think Powell has let monetary stimulus run too high for too long, should be a bit cautious about cheering Warren on here. Whoever Biden would nominate to replace Powell would likely be even more dovish on inflation.

Speaking of which, the Case-Shiller home price index showed on Tuesday that home price appreciation accelerated from an already stunning 18.7 percent year over year increase in June to 19.7 percent in July. That, coupled with signs of ongoing inflation in yesterday’s manufacturing survey from the Dallas Fed and today’s from the Richmond Fed, suggest that we’re nowhere near the end of the so-called “transitory” period of high inflation.

Alex Marlow & John Carney
Breitbart News Network
Warren Confronts Powell on Capitol Hill

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