Federal Reserve Board Chairman Jerome Powell speaks to reporters after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to stem a disruptive surge in inflation, during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, U.S., June 15, 2022.
Elizabeth Frantz | Reuters
Federal Reserve Chairman Jerome Powell’s insistence that the central bank is not deliberately trying to cause a recession and that the economy is on solid footing is exactly what someone in his position would be expected to say.
The trouble is, the Fed’s likely to get a recession anyway as data shows the economy is a far cry from stable.
Consequently, markets whipsawed Thursday, going from a positive reaction on Wednesday to Powell’s post-meeting comments to a rout as worries fester over what effect higher interest rates and tighter monetary policy will have on a fragile state of affairs.
“What the market is worried about, even before you get to a recession, is a policy mistake, that the Fed breaks something,” said Quincy Krosby, chief equity strategist at LPL Financial. “The market also is questioning his comment that the economy is strong.”
More specifically, two comments the Fed chair made stand out from the news conference: First, that the Fed is not trying to “induce a recession now. Let’s be clear about that.” Also: “There’s no sign of a broader slowdown that I can see in the economy.”
In fact, there are myriad signs of a slowdown.
On Thursday alone, real estate data for May showed a 14.4% monthly slowdown in housing starts at a time when there is a chronic shortage of homes. A Fed manufacturing reading showed continued contraction in the Philadelphia region. Weekly jobless claims were higher than expected as well.
That data piles onto other recent points: Inflation at 41-year highs, consumer confidence at historic lows, and retail spending falling amid dramatically higher prices.
“At minimum, growth was going to slow even before the Fed started pressing on the brakes,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets. “The evidence on that is seemingly growing on a pretty consistent basis now … With all due respect to [Powell’s] comment, it’s just not consistent with the data on the ground.”
The problem with the solution
In the aftermath of Wednesday’s decision to raise benchmark interest rates 75 basis points, the biggest move in 28 years, Wall Street reaction to the hike, plus Powell’s comments, coalesced around a few common themes.
First, as Krosby said, “the market believes the Fed is going to expunge inflation pressures.”
However, “That’s the problem now. There’s a sense in the market that he could lead us straight towards the Fed breaking something, which is a policy error,” she added.
Second, there was a general lack of clarity about what happens next. Will the Fed hike 50 basis points or 75 basis points come July? Statements from Powell indicated that both are on the table, but his seemingly glass-half-full comments about the economy left more wiggle room than markets were comfortable with.
Finally, the chair contradicted himself on multiple occasions.
He noted that the Fed has little control of inflation inputs such as energy and food prices, but said the Fed will keep hiking until gas prices fall. He also said inflation expectations are well-anchored while conceding that the policy pivot away from a half percentage point hike to Wednesday’s move was influenced by a rising inflation outlook, as shown in Friday’s University of Michigan survey.
And then there was the economic question, with the chair insisting the economy is well positioned to handle higher rates while an Atlanta Fed gauge is showing flat economic growth in the second quarter after falling 1.5% in the first.
A ‘confused’ Fed chief
Taken together, Powell’s comments “came across as confused, lacking confidence, and raising macroeconomic and financial stability risks,” Bespoke Investment Group said in a client note.
The firm also took Powell to task for emphasizing food and fuel inflation, which are generally considered outside the Fed’s purview.
“Not only is the Fed targeting the wrong variable explicitly and casting aside forward guidance, they also appear to be far too optimistic about near-term growth; Powell’s description of consumer spending as ‘strong’ amidst ‘no sign of a broader slowdown in the economy’ adds to our concern that the Fed is behind the curve and hurtling towards a policy error as a result,” Bespoke said.
Powell affirmed that he and his fellow policymakers won’t be locked into a specific course of action but will be guided by data.
He might not like what he sees for a while, particularly if he focuses on headline inflation influences like gas and groceries.
RBC’s Porcelli said those numbers likely will point to 9% annual increases for the rest of the summer, putting the Fed in a potential box if it uses those levels as policy triggers.
“They need an off ramp. They need to acknowledge the reality that they can’t control this stuff,” Porcelli said. “They need to have a better narrative. Short of him laying out a more cohesive strategy for how they’re going to deal with this, this lends itself to an idea that maybe they do make a more meaningful policy mistake.”
President Biden Signs Bipartisan Gun Safety Bill into Law
On Saturday, President Joe Biden signed a bipartisan gun control bill into law.
According to USA Today, the law, called the Safer Communities Act, urges states to create “red flag” laws that would prevent people deemed dangerous from being able to legally obtain a firearm. It further eliminates the “boyfriend loophole” by adding “dating partners” to the list of violent domestic abusers banned from purchasing a gun and increases background checks of 18 to 21-years-olds seeking to buy a firearm.
Additionally, it includes “the first-ever federal law that makes gun trafficking and straw purchases distinct federal crimes.”
“At a time when it seems impossible to get anything done in Washington, we are doing something consequential,” Biden said at the White House.
“While this bill doesn’t do everything I want, it does include actions I’ve long called for that are going to save lives,” he added before calling the bill the “most significant [gun control] law to be passed” over “the last 30 years.”
Noting that people have been calling on lawmakers to do something since the Columbine mass shooting in 1999, Biden said their cries have now been answered.
“From Columbine to Sandy Hook, to Charleston, Orlando, Las Vegas, Parkland, El Paso, Atlanta, Buffalo, Uvalde, and for the shootings that happen every day in the streets that are mass shootings — and we don’t even hear about them, the number of people killed every day in the streets — their message to us was: ‘Do something.’ How many times have we heard that? ‘Just do something,’” he said. “Well, today, we did.”
The new law came after a string of deadly mass shootings last month, including a shooting at an elementary school in Uvalde, Texas, where 19 children and two adults were killed, and another at a Buffalo, New York, supermarket where 10 were killed, and three were wounded.
As Christian Headlines previously reported last Thursday, the Senate voted 64 to 34 in favor of the bill. The House then passed the bill on Friday with a 234 to 193 vote, sending it to Biden’s desk.
Fourteen Republican representatives joined all House Democrats in passing the bill.
U.S. Senate Pushes Forward Bipartisan Gun Control Bill
Bipartisan Group of Senators Reach Agreement on Framework for New Gun Control Legislation
Photo courtesy: ©Getty Images/jirkaejc
Kayla Koslosky has been the Editor of ChristianHeadlines.com since 2018. She has B.A. degrees in English and History and previously wrote for and was the managing editor of the Yellow Jacket newspaper. She has written on her blog since 2012 and has also contributed to IBelieve.com and Crosswalk.com.
‘Just an Innocent Man’: Texas Pastor Shot, Killed in Suspected Road Rage Incident
A beloved pastor in Houston, Texas, was shot and killed in a suspected road rage incident on Friday afternoon.
The Reverend Dr. Ronald K. Mouton Sr., who led East Bethel Missionary Baptist Church for 30 years, was shot and killed by another driver at around 4:19 pm while he was driving on the Gulf Freeway.
Rep. Sheila Jackson, R-Texas, and Crime Stoppers of Houston have released a $5,000 reward regarding information leading to an arrest of the suspected shooter, who remains at large as of Monday. According to Click 2 Houston, police say the suspect was believed to be driving a black sedan.
Surveillance video from Pusch and Nguyen Injury Lawyers showed what happened before Mouton was killed.
As reported by The Christian Post, Mouton’s church and friends are aggrieved over his death.
“Dr. Mouton was known and loved by many. If you knew him, you would know him to be a gracious servant, a leader, and a friend. As we begin to cope with the reality of his passing, we ask that you would respect our family’s privacy during this time,” East Bethel Missionary Baptist Church wrote on Facebook.
“I am deeply saddened by the loss of Pastor Mouton. I got to know him when he worked with my late husband, Lonal Robinson, as he developed youth sports programs in the ’90s. His benevolence was meaningful to the children of the community,” one church member wrote.
Lee, a longtime friend of Mouton, remembered the reverend as a loving man who loved to serve others.
“This was just an innocent man traveling on a road near his church where he worked all the time,” the congresswomen said. “He loves ministry. He was just doing the work of a pastor.”
Mouton, a graduate of Baylor University and Stephen F. Austin State University, leaves behind his wife of nearly 40 years, four children, 10 grandchildren, a twin brother, and other siblings.
Photo courtesy: ©Getty Images/Stephen Barnes
Milton Quintanilla is a freelance writer. He is also the co-hosts of the For Your Soul podcast, which seeks to equip the church with biblical truth and sound doctrine. Visit his blog Blessed Are The Forgiven.
Christian Leaders Celebrate the Overturning of Roe but Caution: ‘Our Work Is Just Beginning’
Christian leaders across the denominational spectrum on Friday celebrated the overturning of Roe v. Wade but cautioned that much work – in states and in local communities – remains to be done.
The court’s overruling of Roe sends the issue back to the respective 50 states, where legislatures and governors now will decide – and in some instances already have decided – what to do.
Here are how seven Christian leaders reacted to Friday’s opinion:
Lila Rose, President and Founder of Live Action
“Roe v. Wade is over. Children will live because of this decision to overturn the constitutional fiction of Roe v. Wade,” Rose said. “… This decision is an important step forward for the protection of innocent life in our nation, but the work of the pro-life movement is just getting started. While overruling Roe is a necessary first step, giving states the prerogative to regulate abortion is not a final victory. While this decision will give states the right to protect their youngest citizens, many of our nation’s largest states, such as California, Illinois, and New York will still legalize and even subsidize the killing of our youngest children. We will not have true justice until the Supreme Court acknowledges the truth that under our Constitution, every American – born or preborn – has an inherent right to life protected by the 14th Amendment.
“Science conclusively proves that a unique and biologically distinct human life begins at the moment of fertilization,” Rose added. “Every child regardless of their age, should be protected from the horrors of abortion and the abortion industry. Going forward, the pro-life movement must advocate for the Supreme Court to grant equal protection under the law to all humans, even from the very beginning of every human’s life. Starting today, every single state in our nation must act swiftly to codify protections for preborn children into state law and resource mothers and fathers to ensure the American family is healthy and ready to flourish without the grave violence of abortion.”
Rose wrote in a tweet, “Our work is just beginning.”
Our work is just beginning
— Lila Rose (@LilaGraceRose) June 24, 2022
Roland Warren, President and CEO of Care Net
“For all who value the sanctity of human life, today marks a monumental day in our efforts to protect the unborn. In upholding Mississippi’s pro-life law and overturning Roe v. Wade, the Supreme Court has paved the way for states to make laws regulating abortion based on the values of their own citizens,” Warren said. “But changed laws don’t equal changed hearts, and the Supreme Court can’t outlaw unplanned, unexpected, and unexpectedly complicated pregnancies. Accordingly, regardless of how the laws of our land play out over the next several years, women and men will continue to face tough pregnancy decisions. In an environment in which abortion is more difficult to access, Care Net’s work has become more critical than ever.
“Care Net will continue to support our network of more than 1,200 affiliated pregnancy centers, a national hotline, and a growing network of churches in their irreplaceable efforts to offer compassion, hope, and help to women and men at risk for abortion.”
Franklin Graham, President of Samaritan’s Purse and the Billy Graham Evangelistic Association
“Roe v. Wade, passed 49 years ago, has resulted in the deaths of over 63 million innocent children in this country. Sadly, this decision is not an end to abortion — it pushes the battle back to the states,” Graham said.
“My prayer is that every state will enact protections for children in the womb and that our nation will value life and recognize the rights of our most vulnerable,” Graham said.
Karen Swallow Prior, Author and Professor at Southeastern Baptist Theological Seminary
“Our work now is just starting: we must help and support moms, dads, and babies. Love them all – and in so doing making abortion unimaginable,” Prior said.
Our work now is just starting: we must help and support moms, dads, and babies. Love them all—and in so doing making abortion unimaginable. #RoeVsWade
— Karen Swallow Prior (Notorious KSP) (@KSPrior) June 24, 2022
Bart Barber, President of the Southern Baptist Convention
“Southern Baptists rejoice at the ruling that the United States Supreme Court has delivered today in Dobbs v Jackson Women’s Health Organization,” Barber said. “Since 1980, the Southern Baptist Convention has passed more than 20 resolutions on the question of abortion.
“… As we stated just days ago in a resolution at our 2022 Annual Meeting, in a post-Roe United States, ‘We commit to stand with and pray for abortion-vulnerable women, to eliminate any perceived need for the horror of abortion, and to oppose Planned Parenthood and other predatory organizations or institutions who exploit vulnerable women for profit.’ State-by-state, mother-by-mother, heart-by-heart, we will continue our sacred work toward this goal.”
Kristen Day, Executive Director of Democrats For Life of America
“DFLA is excited about the political opportunities this decision creates for pro-life Democrats,” Day said. “We have made significant contributions to advancing justice for the preborn and their mothers, and will continue to do so. Today is a wonderful day and we enthusiastically recommit ourselves to the mission of protecting all human life from womb to tomb.”
Day urged states to assist women facing an unplanned pregnancy.
“What are they going to do to support those women who no longer can [have an] abortion in those states?” Day told NBC. “How are we going to provide them with the opportunity and the support to parent, feed their families, keep their jobs and … have affordable health, health care, affordable childcare? … Let’s put women and children first and let’s provide the support, compassion to help them with a real choice to become parents.”
A news release said Democrats for Life “celebrates” the overturning of Roe.
Roe Overturned!!! Read the DFLA Press Release here! https://t.co/7Ist7G15PN
— Kristen Day (@ProLifeDem) June 24, 2022
Alveda King, Founder of Speak for Life and Niece of the late Martin Luther King Jr.
“For 49 years, ‘we the people’ have had to endure a flawed and unconstitutional ruling from the Supreme Court that allowed unelected judges to create a national right to abortion that ultimately led to extreme actions, like late-term abortions, against the unborn,” King said. “Today, the Supreme Court has rightfully overturned that decision, sending the power to regulate abortion back to the elected officials at the state level. I have longed for and prayed for this day. And I will continue to fight for human dignity for everyone – from the womb to the tomb.”
Photo credit: ©Getty Images/Pool
Michael Foust has covered the intersection of faith and news for 20 years. His stories have appeared in Baptist Press, Christianity Today, The Christian Post, the Leaf-Chronicle, the Toronto Star and the Knoxville News-Sentinel.
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