Powell warns inflation isn't over

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Aug 25, 2023 View in browser   By Bethany Irvine Presented by Fed Chair Jerome Powell used his address today at the Federal Reserve Bank of Kansas City’s annual conference in Jackson Hole, Wyo., to emphasize that the Fed continues to stand behind its 2% inflation target. | AP JUST IN — “GOP picks Houston for Republican National Convention in 2028,” scooped by Natalie Allison GEORGIA ON MY MIND — All 19 defendants charged in the Georgia election interference case alongside former President DONALD TRUMP officially surrendered to the Fulton County jail ahead of DA FANI WILLIS’ noon deadline. Illinois pastor STEPHEN LEE and publicist TREVIAN KUTTI were the final holdouts this morning after several defendants in the case turned themselves in overnight. “All but one of the defendants have surrendered after negotiating a bond deal with prosecutors. The 18 agreements allow each defendant to be out on bond during the course of their legal case,” CNN’s Hannah Rabinowitz and Marshall Cohen report. “The one defendant who did not negotiate before turning himself in, HARRISON FLOYD, remains in law enforcement custody while he awaits a bail hearing.” Meanwhile: “Trump is selling his mug shot on shirts, koozies and bumper stickers,” by WaPo’s Timothy Bella DISPATCH FROM JACKSON HOLE — Despite hopes that the national economy is on the upswing, Fed Chair JEROME POWELL used his address today at the Federal Reserve Bank of Kansas City’s annual conference in Jackson Hole, Wyo., to emphasize that the Fed continues to stand behind its 2% inflation target and hasn’t ruled out further rate hikes. “Although inflation has moved down from its peak — a welcome development — it remains too high," Powell said. “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.” Still, Powell acknowledged it was difficult to measure the progress of the existing measures due to “uncertainty about the duration of the lags with which monetary tightening affects economic activity, and especially inflation." "As is often the case, we are navigating by the stars under cloudy skies," Powell added, concluding his speech with the pledge that “we will keep at it 'til the job is done.” The context: “Powell’s remarks come at a pivotal moment for the economy, which could go along two very divergent paths,” writes Victoria Guida. “While there are clear signs that inflation is easing and growth is continuing, there are indications that business sentiment is weakening, and high rates will continue to bite into consumer savings as credit card debt swells Sneak peek: Powell gave an advance notice of July’s inflation numbers ahead of the release of the full report next week, noting “Inflation peaked at 7% in June 2022 and declined to 3.3% as of July.” Should that 3.3% hold, it would mean a slight ramp up in inflation from last month’s reported 3%. More from NYT’s Jeanna Smialek MORE PRIGOZHIN FALLOUT — The Kremlin has rejected claims that Russian President VLADIMIR PUTIN arranged the jet crash that may have killed Wagner Mercenary Chief YEVGENIY PRIGOZHIN, calling the assertion an “absolute lie,” Reuters’ Andrew Osborn reports from Moscow. The announcement came just a few hours after Russian Deputy Foreign Minister SERGEI RYABKOV chastised President JOE BIDEN for saying earlier this week that he was "not surprised" by news of Prigozhin's likely death, and that “there's not much that happens in Russia that Putin's not behind.” “It is not for the U.S. president, in my opinion, to talk about such tragic events of this kind," Ryabkov said. More from Reuters Despite the Kremlin’s curt denial, the presumed death of the man who launched an armed rebellion against Putin earlier this year sends a powerful message from the Russian autocrat to his opposition that “no degree of effectiveness and achievement can protect someone from punishment for violating Mr. Putin’s loyalty,” NYT’s Anton Troianovski and Valerie Hopkins report. “[W]hether Mr. Putin personally ordered the attack may be beside the point: What matters is that Mr. Prigozhin suffered a violent death after Mr. Putin publicly condemned him.” Related read: “Nerve agents, poison and window falls. Over the years, Kremlin foes have been attacked or killed,” by AP’s Dasha Litvinova Happy Friday afternoon. Thanks for reading Playbook PM. Drop me a line: birvine@politico.com.   A message from The American Petroleum Institute (API): Fuel Up on Facts about pump prices. Global demand for crude oil drives the prices Americans pay at the fuel pumps. When demand for crude oil (and fuels like gasoline, diesel and jet fuel derived from them) and supply struggles to keep up, retail prices can be affected. Instead of drawing down America’s emergency oil reserves, Washington should enact policies that help develop America’s abundant crude oil reserves to help put downward pressure on gas prices.   Programming note: Playbook PM will be on hiatus next week and Labor Day. We will be back in your inbox on Sept. 5. Playbook will still publish every morning. 2024 WATCH  AD WARS — As a part of a new $25 million blitz in battleground states, Biden’s reelection campaign has released a new TV ad targeting Republicans’ views on abortion rights, NBC’s Megan Lebowitz scoops. “[The advertisement] features a series of Republicans discussing the end of Roe v. Wade and calling for national limits on abortion. … It will run online and in Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin.” MORE POLITICS NEW FIGHT IN THE OLD DOMINION — “This Year’s Most Bruising Political Battle Will Be in Virginia” by The New Republic’s Grace Segers  WE WANT YOU! — As Republicans eye battleground districts ahead of the 2024 election, party leaders are finally seeing results as they continue to tackle their candidate recruitment crisis, Ally Mutnick and Sarah Ferris report. “While a few holes still remain — most notably in Maine and Alaska — party strategists said their recruitment worries have largely abated as Labor Day approaches. … Republican candidates have jumped into swing-seat races in Nevada (HEIDI KASAMA) and Pennsylvania (MARIA MONTERO, RYAN MACKENZIE and ROB MERCURI), with more expected to follow soon.” CONGRESS  EYEBROW RAISE — Though Rep. ANDREW CLYDE (R-Ga.) has vocally opposed a small ATF program designed to limit gun dealers from selling firearms traced to criminal activity, he failed to disclose that one the two gun shops he owns in his home state was placed on the monitoring program in recent years, NYT’s Glenn Thrush reports this morning: “A.T.F. inspectors made the designation after they found that more than 25 guns sold there had been used in crimes within three years of their purchase. It is not clear what crimes were traced to guns sold through Mr. Clyde’s stores … But the agency regards a Demand 2 designation as an important indication that a seller might be a popular destination for criminals or the target of so-called straw purchasers.” POLICY CORNER  THE TAXMAN COMETH — The Treasury Department announced new rules today aimed at untangling the complex tax laws surrounding cryptocurrency while also making it harder for crypto investors to dodge income taxes, WSJ’s Richard Rubin and Paul Kiernan report. “When they are fully implemented, the rules will require crypto exchanges such as Coinbase, to deal with the Internal Revenue Service in a manner similar to brokers who handle investors’ stock and mutual-fund portfolios.” BEYOND THE BELTWAY  LATEST IN MAUI — “Almost 400 people still missing after Maui fires,” by NBC’s Deon Hampton: “As of late Thursday, another 1,732 individuals who had originally been reported as unaccounted for had since been found safe and well, county officials said. … At least 115 people have been confirmed dead in the wildfires, the deadliest in modern U.S. history.” DEEP IN THE HEART — “Texas trial over Biden policy letting migrants from 4 countries into US to wrap up Friday,” by AP’s Juan Lozano   GROWING IN THE GOLDEN STATE: POLITICO California is growing, reinforcing our role as the indispensable insider source for reporting on politics, policy and power. From the corridors of power in Sacramento and Los Angeles to the players and innovation hubs in Silicon Valley, we're your go-to for navigating the political landscape across the state. Exclusive scoops, essential daily newsletters, unmatched policy reporting and insights — POLITICO California is your key to unlocking Golden State politics. LEARN MORE.     THE ECONOMY WHAT THEY’RE READING IN DETROIT — “UAW members authorize strikes against Detroit Three automakers,” by the Detroit News’ Jordyn Grzelewski and Breana Noble: “United Auto Workers members at the Detroit Three automakers authorized the union to call a strike against the companies when their contracts expire on Sept. 14 … [T]he combined average across Stellantis NV, General Motors Co. and Ford Motor Co. was 97% in favor of strike authorization.” WAR IN UKRAINE TRAINING DAY CONT. — While the White House’s decision to allow allies to train Ukrainian forces to use F-16 fighter jets seemed like “an abrupt change in position,” for Biden, the announcement came after months of deliberation and talks with allied nations, AP’s Aamer Madhani and Lolita Baldor report: “[A]s the administration was publicly playing down the prospect of F-16s for Ukraine in the near term, an internal debate was heating up. Quiet White House discussions stepped up in February, around the time that Biden visited Ukraine and Poland, according to the U.S. officials.” AMERICA AND THE WORLD DANCE OF THE SUPERPOWERS — “Saudi Arabia Eyes Chinese Bid for Nuclear Plant,” by WSJ’s Summer Said, Sha Hua and Dion Nissenbaum: “The U.S. has said American nuclear aid is contingent on the Saudis agreeing to not enrich their own uranium or mine their own uranium deposits in the kingdom — nonproliferation conditions not sought by China, which has been seeking to strengthen its influence in the Middle East.” YOU KNOW THE DRILL — “Australian, U.S., Filipino forces practice retaking an island in a drill along the South China Sea,” by AP’s Jim Gomez TRADING SPACES — Commerce Secretary GINA RAIMONDO's upcoming trip to Beijing highlights the shifting relationship between the Chinese and American economies, as both countries continue to shift their focus to trade agreements with closer neighbors, Reuters’ Joe Cash and Kripa Jayaram report. “U.S. officials have said Raimondo will carry a message that Washington is not seeking to decouple from China, but will protect its national security. A Chinese official said Beijing was ‘looking forward’ to discuss challenges in bilateral trade.” MEDIAWATCH  DISINFORMATION DIGEST — WaPo’s Naomi Nix and Sarah Ellison are up with a deep dive into how social media platforms, including Meta, X and YouTube, are rolling back their programs aimed at policing misinformation content online in “a trend expected to profoundly affect the 2024 presidential election.” “An array of circumstances is fueling the retreat: Mass layoffs at Meta and other major tech companies have gutted teams dedicated to promoting accurate information online. An aggressive legal battle over claims that the Biden administration pressured social media platforms to silence certain speech has blocked a key path to detecting election interference.”   Enter the “room where it happens”, where global power players shape policy and politics, with Power Play. POLITICO’s brand-new podcast will host conversations with the leaders and power players shaping the biggest ideas and driving the global conversations, moderated by award-winning journalist Anne McElvoy. Sign up today to be notified of the first episodes in September – click here.     PLAYBOOKERS  TRANSITION — Hoor Qureshi is now a special assistant in the Office of the Undersecretary for Public Diplomacy and Public Affairs at the State Department. She previously was chief of staff in the Office of Digital Strategy at the White House. Did someone forward this email to you? Sign up here. Send Playbookers tips to playbook@politico.com or text us at 202-556-3307. Playbook couldn’t happen without our editor Mike DeBonis, deputy editor Zack Stanton and producers Setota Hailemariam and Bethany Irvine.   A message from The American Petroleum Institute (API): Fuel up on Facts about Pump Prices: Increased U.S. oil production can put downward pressure on crude costs and prices for gasoline and diesel at the pump.     Follow us on Twitter Rachael Bade @rachaelmbade Eugene Daniels @EugeneDaniels2 Ryan Lizza @RyanLizza Eli Okun @eliokun Garrett Ross @garrett_ross   Subscribe to the POLITICO Playbook family Playbook  |  Playbook PM  |  California Playbook  |  Florida Playbook  |  Illinois Playbook  |  Massachusetts Playbook  |  New Jersey Playbook  |  New York Playbook  |  Ottawa Playbook  |  Brussels Playbook  |  London Playbook View all our politics and policy newsletters Follow us

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