Federal Reserve Chairman Jerome Powell is “angry” about high prices, and is on a “mission” to crush inflation, said Jeffrey Tucker, Founder and President of the Brownstone Institute.
“[Powell] believes he’s not going to get inflation under control until he can obtain a positive [real] interest rate… even if that involves bringing about a deep recession,” said Tucker. “Powell seems like a very angry man right now.”
October CPI data show that inflation rose by 7.7 percent year-over-year, below expectations of a 7.9 percent inflation reading. However, Tucker claimed that inflation had become “embedded,” and would take a long time to return to the Federal Reserve’s 2 percent target rate.
“You’ve got rising [nominal] wages, and that goes out and turns into hot money on the street, which only feeds inflationary expectations,” he said. “I really don’t see this inflation getting anywhere near that 2 percent target anytime in the next twelve months.”
Tucker spoke with David Lin, Anchor and Producer at Kitco News.
Midterm Elections
On Tuesday, the U.S. held midterm elections for the House of Representatives and Senate. Although Republicans expected a definite victory, a “red wave,” whereby the GOP would triumph in the election, failed to manifest. Votes are still being counted.
Tucker said that the GOP had not communicated a clear message, costing them electoral victories. Despite inflation being “awful” amidst a “collapsing” economy, Republicans did not offer remedial policies.
“You’ve got to have clarity about why these things are happening and what needs to be done about them,” said Tucker. “That’s where I think the Republicans completely failed.”
Tucker suggested that Republicans need to propose radical cuts to the U.S. government, but lack the “backbone” to do so.
“We need to get rid of the administrative bureaucracy,” he said. “There are 435 agencies, we probably need just a handful of those. They all need to be cut.”
Economic Outlook
As the U.S. economy slides into recession territory with the Fed raising rates and inflation remaining high, Tucker claimed that it is “time to prepare for the worst.” He particularly alluded to the “last 31 months,” which included “shattered” trade relationships, economic fallout from the Russia-Ukraine war, “zero-carbon” policies, and weak political leadership.
“There are a lot of crazy people out there willing to do a lot of very dangerous things,” he said. “Just think about The Joker, and put him in a coat and tie and give him power. That’s what we’re looking at.”
This, in turn, has led to “political discontent,” he said.
“We’ve got an elite class of rulers that at all levels… are lording it over the rest of us and driving the economy into the ground,” Tucker explained. “It’s killing living standards.”
To find out Tucker’s outlook for Bitcoin and cryptocurrencies, watch the video above
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