by Ryan Severino, CFA
Chief Economist and Head of U.S. Research at BGO | Adjunct Professor at Columbia University and New York University
‘Twas the week before Christmas, and all through the Fed,
Not a creature was stirring, except doves overhead.
The stockings were hung by the chimney with care,
In hopes low inflation soon would be there.
The economists were nestled all snug in their beds,
While visions of rate cuts danced in their heads.
And many Fed governors starting to chat,
With things settled down and the curve getting flat.
When out in the markets, there arose such a clatter,
I sprang to my desk to see what was the matter.
Away to Windows I flew like a flash,
Watching for any sign of a crash.
The moon on the breast of the new-fallen rates,
Gave the lustre of mid-cycle to monetary debates.
When what to my wondering eyes should appear,
But a soft-landing sleigh and the efficient frontier.
And a little old driver with a slight pensive scowl,
I knew in a moment it must be Chair Powell.
More rapid than hawks his coursers they came,
And he whistled and shouted and called them by name.
“Now Waller, now Mester, now Bowman, now Barkin,
On Kugler, on Bostic, on Goolsbee and Harker!
From the white Eccles Building, to the National Mall,
Dash away, dash away, dash away all.”
As leaves that before the wild hurricane fly,
Expectations for rate cuts reaching the sky.
So up to the housetop, the coursers they flew,
With forward guidance and Chairman Powell too.
And then in a twinkling, a widening spread,
And the sounding of bulls all charging ahead.
As I drew in my head, and was turning around,
Down the chimney Chair Powell came with a bound.
He was dressed in a suit, from his head to his foot,
And he sensed high inflation was finally kaput.
With policy tools he had in his pack,
He brought the markets back into the black.
His glasses so smart, his vision so clear,
He reassured markets they had nothing to fear.
With low unemployment across the whole nation,
His look seemed to say, “Immaculate disinflation.”
He was somewhat reserved, but a jolly old guy,
Who seemed happier without inflation so high.
With a wink of his eye and a twist of his head,
Proclaimed my portfolio out of the red.
Retail sales up again, he went back to his work,
And filled all the stockings, and turned with a jerk.
With a slight knowing nod and a scratch of his nose
Consumer sentiment and confidence rose.
He sprang to the sleigh, to the press gave a statement,
With renewed confidence in inflation abatement.
But I heard him exclaim as he drove out of sight,
“We might raise again if labor’s too tight.”