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Jay Powell Needs More Cowbell

Jay Powell Needs More Cowbell

August 08, 2023

In April 2000, Saturday Night Live aired a comedy sketch known as “More Cowbell”. It starred guest host Christopher Walken as music producer “The Bruce Dickinson”. It also featured Will Ferrell, who also co-wrote the sketch, as the overzealous fictional cowbell player, Gene Frankel.

The sketch takes place during a music documentary showcasing footage of the rock band Blue Öyster Cult’s 1976 recording session of their hit song “(Don’t Fear) The Reaper”. The first take of the song seems to be going well. However, Producer Dickinson continually surprises the band by asking Gene (Ferrell) for more cowbell on each successive take.


The sketch is widely considered to be one of the funniest and most memorable that Saturday Night Live has ever done. It consistently ranks in the top 10 of the all-time best SNL skits. For those of you who have five minutes and would like a reminder and a laugh, a YouTube link to the sketch is included below.

More Cowbell

The phrase “more cowbell” has also become a part of American Pop culture. The Cambridge English dictionary defines it as an extra quality that will make something better. “More cowbell” can also mean an element that we need more of.

Today, we are going to use the term “more cowbell” as a metaphor for Federal Reserve Chairman Jay Powell continuing to drive interest rates higher in the face of rapidly falling inflation. Even as inflation has fallen from above 9% in June 2022, to 3% in June 2023, Powell apparently wants interest rates to go higher as an insurance policy against inflation reaccelerating.

You will remember that even as inflation quickly rose in the latter half of 2021, the Fed did not start raising interest rates until mid-March of 2022. And when they did, they only raised rates by a quarter point. Apparently, at that time, Producer Powell only thought we needed “a little more cowbell”.


As inflation continued to rise, driven by supply chain disruptions as well as rising oil and food prices, largely stemming from Russia’s invasion of Ukraine, Powell thought he needed “even more cowbell”. He then raised rates by 3/4 of a point at four consecutive meetings. Such a rapid rise in interest rates had not been seen in over 40 years. “I got a fever, and the only prescription is more cowbell!”.


As inflation started coming down more quickly than many economists expected, the Fed actually paused its interest rate increase campaign in June. At that time, the CPI had fallen to 4% on a year-over-year basis.

However, at its meeting in late July, and in the face of inflation falling another full point down to 3%, the Fed decided to raise interest rates again. They are also threatening additional interest rate increases if needed. Powell stated that the potential for another interest rate increase in September is on the table as they are strongly committed to bringing Inflation back down to 2%.


As you can see in our only economic chart in today’s post, short-term interest rates are now at the highest level they have been since 2001. The Fed is walking a fine line between its dual mandates of price stability and maximum sustainable employment. If they continue to raise rates to bring down inflation, they may end up overshooting and pushing the economy into a recession. This, in turn, would cause higher unemployment.

Can Chairman Powell pull a Bruce Dickinson, get “all the cowbell” he desires and bring inflation down to the level the Fed feels comfortable with, without causing the recession, that so many economic indicators have been pointing to for many months now? This is the question on everyone’s mind. The CFPs of Impel Wealth Management will continue to monitor the data and the narrative to help you, our trusted friends and clients make wise decisions as we continue “Moving Life Forward”. 

© 2023 Jesse Hurst

The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

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