There has been no shortage of critics when it comes to the Fed’s battle against inflation. The last two years have been marked by an ongoing discussion on whether the interest rates are now too high and will cause a recession or if they are too low and inflation will become hard to dislodge, with some arguing that the current path has only guaranteed the American economy will get the worst of both worlds.
Indeed, the latest CPI print came in hotter than expected, causing a brief but sharp decline in the price of stocks, commodities, and even cryptocurrencies, and one expert – Gordon Johnson, the Founder and CEO of GLJ Research – was quick to place the blame squarely at the head of Jerome Powell and Janet Yellen.
The worst of the crisis is yet to come
For a relatively long time, Gordon Johnson has been warning that the current course taken by U.S. authorities has ensured that the current CPI reduction – compared to the highs in June 2022, at least – is only a temporary reprieve.
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In fact, in late January, the expert warned that the current inflationary pattern in the U.S. is worryingly reminiscent of the financial situation between 1966 and 1982. From this, he argued that the prices are likely to surge again and that the inflation will, by 2028, reach highs well above the 9.1% recorded in 2022.
After the January CPI print was released, Johnson again took to X to reiterate his point, arguing that by allowing the financial conditions to loosen while “pumping liquidity into private hands, & pushing stocks higher daily,” the Federal Reserve and the U.S. Treasury are all but guaranteeing that things will only get worse from their current state.
The analyst went so far as to say that the current actions of U.S. authorities amount to a Ponzi Scheme because “it’s paid for by inflation for the masses, while the wealthiest 10% get even richer.” He also concluded that the things he expects are coming are the “most predictable forthcoming inflation crisis ever.”
‘If King Croesus crosses the Halys River, a great empire will be destroyed’
Much has been said of how vague Jerome Powell’s speeches after the Federal Open Market Committee (FOMC) meetings are, and even more has been written in an attempt to discern if any of his statements signal imminent interest rate cuts.
December 2023 was one of the few recent examples in which Chair Powell has been relatively decisive with his statements – though he seemingly backtracked on his stance within two weeks.
In the immediate aftermath of the release of January CPI figures, Johnson wrote on X that a large driver for the inflation increase was the fact that Powell volunteered that the authorities are focusing on when to cut rates on December 13, despite being adamant that it is too early to consider such a move less than two weeks earlier on December 1.
