Powell Has Lost Control, Period.

For starters, Volcker must be spinning in his grave. Volcker was a very successful Federal Reserve Chair who would not bow to political pressure and started raising rates in late 1979 to counter massive inflation. At one point in 1980, inflation reached a high of almost 14 percent.

Volcker's actions tanked the economy and brought on a recession but the bitter pill had to be administered and it ultimately led to an economic rebound and eventual boom by the time Ronald Reagan was elected president. 

All of this to say that inflation inevitably destroys dovish Fed policy as it regards maintaining rates at effectively zero or even reducing rates further into negative rates as the ECB and others have done. Right now, the American economy is basically coming off DOA status and slowly picking up, hence the continuing printing of electronic money by The Fed trying to maintain some form of economy stability and momentum, or at least maintain markets on an even keel. But it isn't really working: just look at market breath, inflows and volumes. Those are seemingly the first signs of what is likely to come.

Put another way: Powell is no Volcker. Inflation in 2021 is now at 5% according to official numbers but ShadowStats and others have shown that the more you monkey with the factors used in establishing an official inflation rate, the more the number becomes less credible in true economic terms. Under the real-deal SS formulas, inflation is already above 8% and likely closer to 12-13% in real terms.

In layperson's terms, that means that the screws are tightening and severely limiting what The Fed can do going forward: they won't lower rates into negative territory as that simply cannot theoretically be done in the economic engine of the western world. The more they print, the more inflation accelerates, which means they MUST taper or inflation will get wildly out of control and sink the dollar. Sure, you'll still see short-term rallies in the dollar but the clearly demonstrable overall trend is down and almost continuously so for the American buck.

Powell knows perfectly well that he's got to try and check inflation and that means tapering come stock market hell or high water. So, The Fed is boxed in -- it's no longer a question of if but more a matter of when tapering starts and that's what will sink the markets. Similarly, rates will inevitably rise because inflation will either get far too hot or even get out of control: that will mean both a stock market severe retrenchment and an economic free-fall, mostly like plunging the United States into a second recession.

So, take The Fed's official speak as bullshit: there's no way on planet Earth that they'll be able to delay raising rates to 2023. That's pure economic insanity and monetary policy suicide. Steadily rising inflation will surely and ultimately call the tune and that means at least one rate hike this year. It also means forgetting about Powell's intention to give clear notice before beginning tapering. Inflation is likely to continue rising at such a brisk pace that The Fed will have no choice but to act precipitously on raising rates, long before they had intended. That means later THIS YEAR.