Fed Chairman Jerome Powell made several bizarre, if not shocking, admissions during a prank call with two Russians posing as Ukrainian President Volodomyr Zelensky, where they discussed topics ranging from inflation, to the Russian central bank, to joking about having a 'printing press' in the basement and possibly setting up a federal reserve bank in Kiev.
More interesting was Powell's admission, thinking he was speaking with Zelensky, during the call (which reportedly took place in January) that the Fed would hike rates two more times - a topic on which he has been far more circumspect even when giving testimony before Congress.
"The market is already pricing in two more quarter percentage point rate hikes. We'll look around after we make those two and we'll say should we do any more, and then the question will be how long do we keep rates at this level - and I think we'll keep them there for quite some time," said Powell, roughly two minutes into the clip below.
In retrospect, this is precisely what happened, with the Fed hiking twice in 2023, prompting some to wonder if we are now in the "and done" phase once we get through the May rate hike...
... and if indeed Powell is led by the market - as he hinted during the call - does that mean that the Fed will soon be forced to reverse its tune and find reasons to cut aggressively, as markets are now expecting.
Powell also said that the US economy will grow 'at a subdued level,' and that a recession is "almost as likely as very slow growth," and that it was because the Fed 'raised rates quite a bit,' which he defended as necessary to tame inflation.
"What we need is a period of slower growth so that the economy can cool off, so the labor market can cool off, so that wages can cool off. That's how inflation comes down. That's the only way we know to bring inflation down. And it can be painful, but we don't know of any painless way for inflation to come down."
“Chair Powell participated in a conversation in January with someone who misrepresented himself as the Ukrainian president,” a Fed spokesperson said Thursday. “It was a friendly conversation and took place in a context of our standing in support of the Ukrainian people in this challenging time. No sensitive or confidential information was discussed.”
As Bloomberg notes, the pranksters - Vladimir Kuznetsov and Alexei Stolyarov, who go by the nicknames Vovan and Lexus - have for years succeeded in tricking foreign politicians into talking to them despite their sometimes-crude impersonations.
The duo are supporters of President Vladimir Putin. Back in 2018, the UK said it believed the Kremlin was behind a hoax call to then Foreign Secretary Boris Johnson. The pranksters often post the videos with the intention to embarrass Western policymakers.
Earlier this year, the two shared a conversation with European Central Bank chief Christine Lagarde, also impersonating Zelenskiy.
The pranksters have also tricked Polish President Andrzej Duda into thinking he was speaking to his French counterpart Emmanuel Macron, as well as former German chancellor, Angela Merkel, who appeared to be suspicious during the call.
Fed Chairman Jerome Powell made several bizarre, if not shocking, admissions during a prank call with two Russians posing as Ukrainian President Volodomyr Zelensky, where they discussed topics ranging from inflation, to the Russian central bank, to joking about having a ‘printing press’ in the basement and possibly setting up a federal reserve bank in Kiev.
More interesting was Powell’s admission, thinking he was speaking with Zelensky, during the call (which reportedly took place in January) that the Fed would hike rates two more times – a topic on which he has been far more circumspect even when giving testimony before Congress.
“The market is already pricing in two more quarter percentage point rate hikes. We’ll look around after we make those two and we’ll say should we do any more, and then the question will be how long do we keep rates at this level – and I think we’ll keep them there for quite some time,” said Powell, roughly two minutes into the clip below.
In retrospect, this is precisely what happened, with the Fed hiking twice in 2023, prompting some to wonder if we are now in the “and done” phase once we get through the May rate hike…
… and if indeed Powell is led by the market – as he hinted during the call – does that mean that the Fed will soon be forced to reverse its tune and find reasons to cut aggressively, as markets are now expecting.
Powell also said that the US economy will grow ‘at a subdued level,’ and that a recession is “almost as likely as very slow growth,” and that it was because the Fed ‘raised rates quite a bit,’ which he defended as necessary to tame inflation.
“What we need is a period of slower growth so that the economy can cool off, so the labor market can cool off, so that wages can cool off. That’s how inflation comes down. That’s the only way we know to bring inflation down. And it can be painful, but we don’t know of any painless way for inflation to come down.“
“Chair Powell participated in a conversation in January with someone who misrepresented himself as the Ukrainian president,” a Fed spokesperson said Thursday. “It was a friendly conversation and took place in a context of our standing in support of the Ukrainian people in this challenging time. No sensitive or confidential information was discussed.”
As Bloomberg notes, the pranksters – Vladimir Kuznetsov and Alexei Stolyarov, who go by the nicknames Vovan and Lexus – have for years succeeded in tricking foreign politicians into talking to them despite their sometimes-crude impersonations.
The duo are supporters of President Vladimir Putin. Back in 2018, the UK said it believed the Kremlin was behind a hoax call to then Foreign Secretary Boris Johnson. The pranksters often post the videos with the intention to embarrass Western policymakers.
Earlier this year, the two shared a conversation with European Central Bank chief Christine Lagarde, also impersonating Zelenskiy.
The pranksters have also tricked Polish President Andrzej Duda into thinking he was speaking to his French counterpart Emmanuel Macron, as well as former German chancellor, Angela Merkel, who appeared to be suspicious during the call.
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