Jerome Powell Body Language
BY: LITTLE SCOTTIE
SEP 21, 2020 • 6 MIN READ
Chairman Powell was generally uncomfortable during his speech. Some of what he said, he clearly believed in, but for most of the speech he was under an immense amount of stress. Here's my analysis:
Let's start with the setting and his purple tie. The Federal Reserve is supposed to be an independent organization, so Chairman Powell's choice of purple speaks to that point. In politics, when purple is chosen, it is meant to represent someone who is independent, who sits between the Left (Democrat blue) and the Right (Republican Red). He has emphasized this point by wearing Purple.
The reason I think this is particularly important, is Powell is over-selling in much of his speech. He is continually trying to convince the listener that the Fed's policies are not only working, but are "powerful" and will continue to have potency in the future.
It would have been better for Powell to wear a tie that was not in the red or blue color range. By wearing purple he is saying to the listener "I'm not influenced by politics." I believe this is an attempt to oversell his independence which is under increasing scrutiny. Nobody really believes that Powell is truly independent. However, he wants you to think he is by wearing a purple tie.
It's consistent with the over-selling in the rest of his speech so for this reason I think it's important to point out.
Powell is reading from a teleprompter, his hands are below the screen so many of the cues one may ordinarily see are missing. At the beginning of the monologue, It was apparent he was uncomfortable. In the beginning I thought he may have been uncomfortable simply due to the studio environment, but his body language is completely different during the question and answer portion.
By comparison, he is stiff during the monologue. Very robot-like. He is swallowing hard. It actually becomes more distracting as the monologue continues. The hard swallowing is the most telling sign during the first 10 minutes. At first I thought maybe he was hot and needed a drink, but he was never perspiring and the hard swallowing went away (for the most part) during the dialog.
My conclusion is that the stiff body (robot) and hard swallowing (swallowing his words) means to me that he was "toeing the company line" and what he was saying was incongruent with his own beliefs. Powell came into office because he wanted to reduce ("normalize") the Fed's balance sheet and move interest rates up. Everything the Fed has done since the pandemic has been contradictory to this and also, to what I believe, the Chairman would like to do.
It's evident at the end of the monologue when Powell ends by saying, ".... as robust as possible. [hard swallow and shifts weight] And finally, ..." You can see a distinct transition of his stiff body style, a hard swallow as if he's saying "I'm glad I'm done with that." and his transition of honoring a fallen colleague. He is much more relaxed in his shoulders and upper body from this point forward.
Most of the dialogue is planned questions and answers. Powell reads most of the answers or uses notes to remind him of talking points. Most of his adjustment of his glasses are because the are sliding down his nose as he looks up and down. He also has some natural speaking head shake which likely vibrates his glasses and causes him to adjust them. I think most of the time he adjusts his glasses because he needs to.
Touches Nose, Covers Mouth
Powell is visibly uncomfortable with this statement: "reach 2% inflation, that we feel that labor market conditions are consistent with our assessment of maximum unemployment and that we're [touches nose covers mouth] on track to achieve moderate, inflation moderately above."
This is one of the few times Powell touches his face. It's important because he does it so few times. This time he is touching his nose and probably more importantly covering his mouth. This happens when he begins talking about the most controversial part of the Fed's plan which is to target an average inflation above 2%. Here he covers his mouth signaling he is uncomfortable with what he's saying. Covering the mouth is a sign of being deceitful. The Fed will not say how they intend to calculate the average inflation rate so this is indeed a deceitful statement and Powell shows it by covering his mouth.
Also, he stops short of completing the sentence. He says, " ... inflation moderately above." instead of, " ... inflation moderately above 2%". To me, this reinforces the idea that he would rather not talk about this at all.
"... income and household spending data, labor market data, construction data, in the data for business equipment spending, and the fact that businesses are [touches ear] staying in business [stutters begins mumbling] uh and the pace of defaults and things like that have really slowed."
People tough their face and especially the ear because it's where blood flows when you are embarrassed or under stress. It's a sign of deceit in the right context. Here Powell is very comfortable when talking about the research and data of household spending, labor markets and construction. But when it comes to the "fact that businesses are staying in business" he shows us he is lying by touching his ear. He's unconsciously saying, "Don't listen to this part." By the way, everyone knows that businesses aren't staying in business. This is another time when he has overreached and his body language shows it to those who are looking.
In this segment he is talking about forward guidance on rates. He uses a tone reminiscent of regurgitating the "company line" and ends the segment with a hard swallow as if to say, "I'm swallowing my words."
Powell recites the forward guidance line, more robotic in this segment than others which again leads me to believe he is toeing the company line. At the end of the segment he brushes his hair. Brushing hair can mean a number of things, but I think in this context he is trying to soothe himself as this particular policy is incongruent with his beliefs.
Powell responds to a follow-up question regarding the Main Street Lending program. He's somewhat irritated at the question. He adjusts his glasses and gives a "kung fu chop" punctuating his point. Chopping the air says, "This is the way it is, and I dare you to challenge me. If you do, you'll get a kung fu chop." Punctuating speech by chopping the air signals a finality of the statement and that there should be no more discussion about it.
Comfortable with Statistics
It's important to watch this segment. Here he's talking about the nuances of the unemployment data. He's being honest when he explains it. He's very comfortable with statistics and data and is willing to talk about the nuances and implications openly and honestly. This is what Powell looks like when he's honest and forthright. Contrast this to other segments when he's not.
One particular note is when he adjusts his glasses and his forehead. This is a salute move and he's "tipping his hat" to the researchers and the data that has been produced. He believes in his organization (at least the data and research) and it shows with his grasp of the topic and his relaxed, commanding demeanor when presenting it.
Questioning his Notes
Powell is trying to explain how the Fed is helping to keep commercial real estate loans from defaulting which could be the biggest credit problem of this pandemic. In a tortured way, he tries to explain how the Fed's Main Street Lending Program is helping commercial real estate. He stumbles, double checks his notes and even has an expression as though he can't believe his own eyes. "Hey do my notes really say that?" he seems to convey.
Touches Ear, Adjusts Glasses
Once again, Powell touches his ear and adjusts his glasses. He's talking again about the inflation expectations and how they are going to calculate it. He's unsure himself and it comes across in his speech. You can try to hide you emotions, but the subconscious always wins out. Powell's body language shows us more than he'd like.
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