Meanwhile: The Fed's Golf Gaffe
The nation's central bankers, who've have had a rough year in headlines, are letting us all know how they learned about the horrors of inflation
Philadelphia Federal Reserve President Patrick Harker gave an in-person speech at the Center for Financial Stability in New York the other day. Because of the pandemic, it was his first in a while, so he stuck to public-speaking basics, kicking things off with an ice-breaking joke.
“I know I’m a little out of practice, because just as I was about to begin speaking, I made sure my mute button wasn’t on,” he cracked. “In all seriousness…”
Shifting to a graver theme, he mentioned the old saw about being cursed to live in “interesting times.” The novel coronavirus, he said, “has tragically killed at least 6 million people globally and around 1 million here in the United States,” adding, “That’s the equivalent of a city larger than San Francisco or Seattle.” Russia has also invaded Ukraine, he said, “fomenting death and destruction and spurring a humanitarian crisis in the heart of Europe.”
Next in this parade of calamities: the scourge of inflation, a problem so serious that it touched him and his colleagues personally.
“One of our contacts, for instance, mentioned whopping membership fee increases at his golf club,” Harker said, “suggesting this summer may be a good time to play at your local muni instead.”
Inflation is so bad, you might have to play a public course this summer. To quote Conrad’s Kurtz: The horror! The horror!
Adding to the irony is the fact that the Fed in recent years tried to reach out to the masses, holding what it called “Fed Listens” events in 2019. Local business figures and other players offered insight into what was going on with folk, as part of what the bank called a “broad-based and inclusive” approach. If “some of our contacts are preparing to golf at public courses this summer” is the kind of on-the-ground intel they’re getting, they may want to recalibrate.
Harker was the second Fed official in a week to offer a personal window on price hikes. On March 24th, Board of Governors member Christopher Waller gave a speech warning of the “red-hot housing market,” which he called a “singular feature” of the post-Covid economy. But what would he, Christopher Waller, know about it?
“Trust me,” Waller said. “I know it is red hot, because I am trying to buy a house here in Washington and the market is crazy.” It would have been funnier if he’d said, “and the market is crazy, yo,” but as is, his talk was interesting. Waller — who as a Fed governor makes roughly $203,700 a year — went on to address the seemingly contradictory phenomenon of a boom in home-buying even though the nation is seeing a historic rise in home prices, soaring as much as 35 percent since the start of the pandemic.
How could that happen? Waller speculated [emphasis mine]: