JPMorgan's top stock guru says stay underweight equities, investors are too optimistic about economy
CNBCAug 03, 2023
The Facts
On Friday, US Federal Reserve (Fed) Chair Jerome Powell suggested that further interest rate hikes may be needed as the economy continues to stay hot and inflation remains above target.
Delivering a highly anticipated speech at the Kansas City Fed’s annual conference in Jackson Hole, Wyo., Powell doubled down on the Fed’s policy of increasing interest rates in hopes of getting inflation back down to its goal of 2%.
The Spin
Establishment-critical narrative
Jerome Powell has utterly failed as chairman of the Fed and needs to resign. Under his watch, inflation reached record highs, and despite hiking interest rates to 22-year highs, the high inflation persists. Meanwhile, the US is seeing the biggest bank collapses since the last financial crisis, while the Fed completely lacks oversight. Powell is in over his head and must step down.
Pro-establishment narrative
Jerome Powell has done a masterful job as the Fed looks to bring down inflation while providing a soft landing for the economy. The pandemic — and many other unforeseen circumstances — threw wrenches into the financial system, affecting economies across the globe. Not only has he brought inflation down to 3.2%, but Powell has also allowed the economy to continue working for Americans.
