{"id":20877,"date":"2025-10-31T15:24:15","date_gmt":"2025-10-31T15:24:15","guid":{"rendered":"https:\/\/borrowingnexus.com\/?p=20877"},"modified":"2025-10-31T15:24:16","modified_gmt":"2025-10-31T15:24:16","slug":"jerome-powells-wednesday-press-conference-shows-why-he-must-step-down","status":"publish","type":"post","link":"https:\/\/borrowingnexus.com\/?p=20877","title":{"rendered":"Jerome Powell\u2019s Wednesday Press Conference Shows Why He Must Step Down"},"content":{"rendered":"
\n

The fundamental flaws<\/strong> in the way the Federal Reserve operates these days were on full display Wednesday when Jerome Powell talked to the media after the central bank\u2019s key policymaking committee meeting. It confirmed why there must be a drastic overhaul of our central bank\u2014as well as new leadership.<\/p>\n

The Fed decided to cut interest rates by .25%\u2014which surprised no one. What did surprise people was Powell\u2019s throwing cold water on making another small cut next month. The overwhelming consensus had been that the Fed would do so. Now Powell has said it might not happen because there\u2019s so much uncertainty and confusion about where the economy is actually headed, a situation exacerbated by the lack of some economic data, thanks to the government shutdown. Consumer spending is good, yet labor markets are wobbly. Declared Powell, \u201cWhat do you do when you\u2019re driving in the fog? You slow down.\u201d<\/p>\n

Alas, the fog is the way in which the Fed\u2014and most other central bankers and economists\u2014see the world.<\/p>\n

Here\u2019s where our central bank is off base: The Fed remains firmly wedded to the false idea that prosperity causes inflation. It has a bizarre bias against a vigorous economy, fearing that such activity will send prices up. The Fed has forgotten that changing prices tell us what people want and don\u2019t want. Without prices that are allowed to reflect genuine supply and demand, an economy doesn\u2019t work right. Period. For the Fed to try to suppress prices distorts the marketplace.<\/p>\n

Money is simply a measure of value, the way a thermometer measures temperature. The Fed\u2019s prime task should be to maintain a stable dollar. The dollar shouldn\u2019t fluctuate any more than the number of inches in a foot does. Yet Powell made no mention whatsoever of the currently weak dollar, a harbinger of future trouble. The central bank shouldn\u2019t be in the business of trying to manipulate economic activity.<\/p>\n

Another flaw Powell\u2019s presser highlighted was the obese size of the Federal Reserve\u2019s securities holdings. Though the amount has come down from pandemic highs, it\u2019s still far above pre-Covid levels and some eight times higher than it was before the crisis of 2008\u201309. Back then, with no discussion, the Fed flooded the banking system with reserves and didn\u2019t remove them when the crisis receded. Before 2008, the Fed\u2019s balance sheet came to 6% of GDP; now it\u2019s 21%.<\/p>\n

Powell declared on Wednesday that the Fed will no longer be reducing the size of its balance sheet\u2014with no credible explanation. The real reason is purely for power: An institution that holds $6.6 trillion in securities has immense sway in the financial marketplace. It affects which sectors can get credit more easily than others. No bureaucracy surrenders such power voluntarily.<\/p>\n

By the way, around 40% of the reserves the Fed pays interest on are from foreign banks. American taxpayers are subsidizing foreign-owned banks.<\/p>\n

A subject that didn\u2019t come up at Powell\u2019s presser was how the Fed arrived at the 2% inflation goal. Actually, it was pulled out of thin air.<\/p>\n

The flaws in the Fed demand a fundamental change. A new leader is needed. Now.<\/p>\n

And who will that new leader be? Current Treasury Secretary Scott Bessent.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The fundamental flaws in the way the Federal Reserve operates these days were on full display Wednesday when Jerome Powell talked to the media after the central bank\u2019s key policymaking committee meeting. It confirmed why there must be a drastic overhaul of our central bank\u2014as well as new leadership. The Fed decided to cut interest<\/p>\n","protected":false},"author":1,"featured_media":20878,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[],"class_list":{"0":"post-20877","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking"},"yoast_head":"\nJerome Powell\u2019s Wednesday Press Conference Shows Why He Must Step Down | Borrowing Nexus<\/title>\n<meta name=\"description\" content=\"The fundamental flaws in the way the Federal Reserve operates these days were on full display Wednesday when Jerome Powell talked to the media after the\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/borrowingnexus.com\/?p=20877\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" 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