Has anybody got any idea what Powell means by this:"Powell...

Has anybody got any idea what Powell means by this:

"Powell warned that what happens next may be affected by factors outside the central bank’s control that could cause unemployment to rise more than anticipated."

To me that sounds a lot worse than just a bit more inflation requiring just one more rate hike??? Besides that, by telling everyone that there is going to be one more rate hike (only) and then rate cuts in 2024 (see below) means it will have no effect on markets or spending or inflation. In fact it would be bullish and inflationary - especially for bonds and housing.

"The central bank's latest economic projections showedone more quarter-point rate hike this year. They see cuts in 2024."

If Powell was really worried about inflation he would say: "we will keep hiking rates until we have inflation under control and reach our target". The reason why the fed is no longer worried about inflation (and hiking rates), is because they know something bad is about to happen to cause a crisis. But what? We know the crisis not going to be inflationary (like an oil crisis, or a war), it's going to be deflationary - because Powell is already talking about cutting rates next year. So, it has to be another GFC. A GFC will cause a giant credit squeeze - meaning many businesses can't borrow and refinance and will become insolvent causing much unemployment with flowon effects (e.g. housing defaults).

IMO, they are going to let the banks fail (no bailouts) when all these empty office buildings come due for refinancing. It is likely all G7 CBs have agreed to this as a means to do a reset back to zero interest rates - which is the only pathway forward for them due to the debt problem. They will use the excuse: "we cant print more money because we are worried about inflation". This means all the bad debt owed on these empty office buildings will iterate through the banking system. Since most of the money banks lend out is borrowed from other banks, this means banks will stop lending money to each other and won't refinance intra-bank loans either. Banks will still hike their lending rates, despite the fed pause, due to the credit squeeze and lending risk and this will send many businesses and consumers to the wall.

The Lehman Bros. moment will probably happen when a bank fails due to office building bad debt and the fed says "no" to a bailout.