Following Great Jobs Report, Fed Chair Says He’ll Be “Patient” Before Raising Rates Further

The jobs report issued by the Department of Labor on Friday was unequivocally positive. Every sector of the economy, save one, saw robust gains in employment, with 312,000 new jobs created in December beating forecasters’ predictions by 30,000 jobs. In addition, the DOL revised October’s and November’s numbers upward by 58,000 jobs. Even the rise in the unemployment rate from a record low of 3.7 percent to 3.9 percent was explained by the number of new people entering the job market.

The number of unemployed workers dropped by 300,000 over the last 12 months, while the labor participation rate jumped. Wages improved as well as employers were forced to bid higher for a shrinking pool of workers to fulfill vacancies. Especially notable was the jump in the percentage of working-age Americans employed, which hit a five-year high.

Year-over-year, employers added 220,000 jobs a month in 2018, compared to just 182,000 jobs monthly in 2017. And this in a supposedly “tight” labor market. In December every private-sector industry except information technology added jobs, with some of the biggest gains coming from construction, education, and health services.

Fed Chair Jerome Powell (shown) commented on the jobs report at an economic conference in Atlanta on Friday morning, admitting that it reflected a growing economy. As for raising interest rates further in 2019, Powell backed off, saying, “With the muted inflation readings that we’ve seen coming in, we will be patient as we watch to see how the economy evolves.” But then he added that he and his board will be prepared to “shift” Fed policy over interest rate hikes and the continuing “runoff” of bonds from its balance sheet “significantly, if necessary” to pursue its goals.

As this writer has taken pains to show, those goals go far beyond its mandate to “maximize economic growth while keeping inflation in check” (source: the Chicago Federal Reserve Bank). As noted at The New American on Thursday, Powell is the handmaiden of the international banking establishment and has clearly been instructed to slow the Trump economy sufficiently to keep the president from winning reelection in 2020:

If, as we have surmised repeatedly, the Fed’s purpose is to slow and then eventually stop the Trump economic juggernaut just in time for the 2020 presidential election, then it is working. Goldman Sachs has just reduced its growth outlook for the first half of 2019 from 2.4 percent to two percent, and the bank expects growth to slow further in the second half of the year to 1.8 percent.

Morgan Stanley, another insider bank, expects the economy, thanks to the Fed’s interest-rate hikes and its continuing “autopilot” liquidation of its bonds, to slow to 1.7 percent this year, with quarterly growth declining to just one percent in the July to September quarter.

It’s helpful to remember that the Fed is the brainchild of the international banking establishment, as so carefully revealed by G. Edward Griffin in his tome The Creature from Jekyll Island. As part of the Deep State, why would globalists not direct Powell to slow Trump’s economic recovery and stall it just in time for his reelection campaign?

As for Powell’s words, they comforted investors on Wall Street, who jumped upon hearing what they wanted to hear: that he was going to back off on raising interest rates for the time being and that he might even consider slowing his ongoing “runoff” of maturing bonds that has been starving the economy of liquidity. But a look at what is happening to the Fed’s balance sheet reveals that Powell’s words are just that: words. The “runoff” on bonds has shrunk the Fed’s balance sheet by $435 billion in the last 12 months, from $4.5 trillion to just over $4 trillion. That’s 10 percent shrinkage as its policy of “quantitative tightening” continues into the New Year.

As Economy Slows, Bond Investors Say Fed Won’t Raise Rates

A month ago, bond investors were predicting that the Fed would be raising interest rates several times in 2019. As the economy is now clearly slowing, those same investors are predicting the Fed has now done its job and won’t be raising rates in the New Year. Said the Wall Street Journal:

Fed-funds futures, which investors use to bet on the direction of Fed policy, on Wednesday showed a 91% probability that the central bank’s policy makers will finish the year [2019] with interest rates at or below their current levels.

That is a reversal from early November, when futures prices indicated a 90% probability that rates would end 2019 higher than they are now.

The latest report from the Institute of Supply Management merely confirmed that slowing economy, with its manufacturing survey published on Thursday coming in below forecasters’ expectations (which were below October’s).

The New American has been tracking and noting the slowing of the U.S. economy that has been established policy at the Fed for many months now. In November we noted that homebuilders were already feeling the pinch of higher interest rates, which the Fed had imposed on the economy earlier in the year. The NAHB (National Association of Home Builders) monthly confidence index dropped a staggering eight points from October, providing an “early warning signal on the direction of the economy” and running the risk that the Fed “might just be steering the economy off the highway and into the weeds.”

A few days later The New American reported that our position that the Fed’s intervention was intentional and deliberate was confirmed by Jeremy Siegel, professor of finance at the Wharton School of Finance. He told CNBC’s Closing Bell on November 21 that “the market is saying that the pace [of the Fed’s interest rate hikes] is a little too fast.… The market is clearly worried about over-tightening by the Fed.” We noted remarks by Fed Chairman Jerome Powell made in October that the Fed was “a long way from ‘neutral,’” implying that more rate hikes were in the plan in order to slow the economy.

In December The New American warned its readers not to be fooled into focusing only on the proposed interest-rate hikes the Fed was using to slow the economy but to also focus on the “runoff” of billions of dollars of bonds it was holding as they matured. At the time we said:

Since September 2014, the Federal Reserve has been intentionally and deliberately shrinking the money supply — the capital that a capitalist system needs to thrive and prosper — from $4.15 trillion to $3.5 trillion as of November 21, 2018. That’s 15-percent shrinkage in the “oxygen supply” the capitalist system needs.

But it’s worse than that: Most of that shrinkage has taken place since last September. Since then the Fed has reduced the money supply (its “Adjusted Monetary Base” numbers are available from the St. Louis Fed’s website) from $4.0 trillion to $3.5 trillion, a reduction of 12.5 percent.

That money-supply shrinkage is now showing up in the various places pundits are looking to place the blame, i.e., anything that affects the financial well-being of the economy. As interest rates rise and the money supply shrinks (the two most powerful tools the Fed is using to slow the economy), housing starts slow, car sales dwindle, credit card payments increase, profit margins decline, and capital expenditure projects are taken off the board as they are no longer profitable enough to be justified….

It’s the Fed that stands athwart the economy’s startling growth trajectory.

A week later, we noted a reversal by bond investors who saw a slowing economy and changed its mind about the Fed’s continuing efforts to slow it further: “The Fed was expected to continue raising rates well into 2019 but now futures traders (those who bet real money and not just ink on Bloomberg’s website) are backing off. They are betting that the Fed might raise interest rates one more time next year (instead of the three to four times experts were predicting just a month ago) and some are putting large sums down on the bet that — ready? — the Fed will reduce interest rates by one notch next year instead.”

“Meet the Press” Drops Any Pretense at Objectivity on Climate Change Issue

“The science is settled” on the issue of “climate change,” declared NBC’s Meet the Press host Chuck Todd, in introducing a special program promoting only one side of the issue with politicians who included former New York Mayor Michael Bloomberg and California Governor Jerry Brown.

Governor Brown even compared America’s challenge in fighting climate change to the challenge the country faced in World War II in defeating Nazi Germany.

“I would point to the fact that it took Roosevelt many, many years to get America willing to go into World War II and fight the Nazis,” Brown told Todd. “Well, we have an enemy, though different, but perhaps, very much devastating in a similar way. And we’ve to fight climate change. And the president’s got to lead on that.”

Brown did not specifically say who the “enemy” is now, but all the participants in Todd’s program clearly consider those who do not agree with them on the issue of climate change as either the enemy or perhaps collaborators. They often refer to those who do not believe that human industrial activity is having a significant impact on global warming as “deniers” — with an obvious allusion to the Holocaust.

As discomforting as it is to hear Democratic politicians such as Brown and Bloomberg to offer comparisons of today’s “climate change deniers” to Adolf Hitler’s National Socialists, it is not uncommon for such comparisons to Hitler to be made in U.S. political contests. But even beyond the climate change issue, Todd’s decision to not only take sides on the issue, but to declare the contrary position as illegitimate, powerfully illustrates an even larger reality: Todd and many other so-called journalists are not reporters, but seek to make sure one side wins.

“We’re not going to give time to climate deniers,” Todd explained. “The science is settled even if political opinion is not. We’re not going to debate climate change, the existence of it. The Earth is getting hotter and human activity is a major cause. Period.”

Despite years of “climate change” propaganda, a recent NBC News/Wall Street Journal poll demonstrates that Americans remain deeply divided — largely along partisan lines — on the issue. Only 15 percent of Republicans are convinced that climate change is “serious,” requiring “immediate action,” but 70 percent of Democrats are convinced.

And Todd, hosting a news interview show, has made it clear that he not only favors one side of an issue that deeply divides Americans, but he does not view those who hold a different position than he holds on the issue as even legitimate. Their arguments should be ignored.

This is not surprising, as Todd is clearly on the Democratic Party team, even having worked in 1992 on the presidential campaign of Senator Tom Harkin, an extremely liberal Iowa Democrat. Even since taking over the Meet the Press program, Todd has continued to support Democrats. The Daily Caller has reported that Todd and his wife even hosted a dinner party in 2015 for the communications director of Hillary Clinton’s presidential campaign effort. Kristian Todd, his wife, is the co-founder of a political consulting firm, which supports many partisan Democrat campaigns or progressive issues.

Clearly, Todd may want us to think he is wearing the uniform of the umpire, but he is really ready to make a hit for just one team.

As Governor Brown’s allusion to the efforts of President Franklin Roosevelt to persuade Americans to get the country into the war against Nazi Germany demonstrates, liberals believe it is up to them to alter Americans’ opinion on climate change. Interestingly, Roosevelt was never able to convince Americans to go to war against Nazi Germany — Hitler declared war on the United States. War came to the United States on December 7, 1941, when the Japanese bombed Pearl Harbor. That did not put us into the war against Germany, at least not until Hitler decided to honor his alliance treaty with the Japanese and declare war on America. Roosevelt did not even ask for a declaration of war against Germany until they first declared war on the United States. Most historians who have studied this subject believe Congress would not have otherwise declared war on Germany.