NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss says when Federal Reserve Chairman Jay Powell says he's going to keep things slowed down in terms of rate changes, the market should believe him, just like the proverbial parent in the car on vacation.
"Don't make me turn this thing around," Goss said. "You folks aren't listening. You're not listening. We economists, I think, on this one, we've gotten it right. We didn't get the recession right, on this one, we keep saying he isn't going to reduce rates. He's saying now that he's probably not in March. It depends on the numbers that come out."
The strength of the jobs number that came out on Friday seems to say that the economy is still plugging along just fine, and it is okay to stand pat.
"We've got the two inflation readings coming out in February and March before the Fed meets on the 19th and 20th of March. Investors, they've incorporated in six to seven rate cuts, there are only seven meetings left this year for the Federal Reserve to meet."
The chances of them cutting at every remaining meeting, unless they would somehow see a huge recession, just aren't likely.
"Investors are, as I've said before, whistling past the graveyard," Goss said. "There's just not going to be that many rate cuts unless there's a recession."
At this point, the question is, has the economy fully ingested all of the federal money that was put in to stimulate it? When that happens and growth has to happen organically, without the propping up by federal debt, is when we'll see if a recession actually happens or if the Fed gets the soft landing it is looking for.
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