Roadblock

Axios posted an article this morning pointing to the oft-cited disconnect between people's understanding of their own financial situation (those people who rate their own finances as "at least okay" in the Federal Reserve's "2022 Survey of Household Economics and Decisionmaking") and their understanding of how the national economy (those people who say that the national economy is "good or excellent").

In the piece, Axios shows a chart (a subset of some data in the survey results) that points to the idea that people's overall assessment of the national economy took a dive when the SARS-2 coronavirus pandemic broke out, and hasn't really recovered since.

What's interesting is the invocation of Federal Reserve Chairman Jerome Powell.

It's hard to see what could turn sentiment around. That's largely because of Fed chair Jerome Powell, who doesn't want and won't allow some kind of economic boom — he thinks the economy is running too hot already.

Presumably this is because Chairman Powell is of the impression that an economic boom would raise demand more than it would raise supply; this, in turn would place upward pressure on inflation. Which is understandable; there's simply no immediate evidence to support the contention that this is the thought process. Axios doesn't offer any; and it's unclear if the Axios reporter himself believes that Chairman Powell is wielding some sort of deliberate veto of an "economic boom" or if this is supposedly what the public believes. There's no mention of Chairman Powell in the survey results, or at the link in the Axios article, leaving the source of this particular data point a mystery.

Part of it may be the way the economy is generally spoken of. Interest rate increases are designed to make the cost of money higher, which should lead to decreases in borrowing-supported demand. And since one of the drivers of inflation is a high demand and low supply, lowering demand should bring prices down.

In any event, I'm dubious on noting that Chairman Powell appears to have some sort of personalized control over the whole of the American economy in the way mentioned. It seems to be a recipe for the blame game, which rarely serves anyone well.