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Photo: Zach Gibson/Getty Images. Illustration: Aïda Amer/Axios

The U.S. economy looks good to Jerome Powell.

The big picture: The Fed chairman laid out his rose-colored vision of the country on Tuesday at the National Association for Business Economics conference. The economy is neither too hot nor too cold, inflation is under control, productivity is increasing, the job market is booming and the Fed is not (repeat, not!) engaging in a new quantitative easing program.

What's happening: It's becoming clear to more economists and market participants that the Fed's toolkit is losing its effectiveness and monetary policy may be powerless to protect the economy if there's a recession. So Powell has deployed a central bank's most consistent weapon: communication.

What he's saying:

1. About the unprecedented level of U.S. debt:

"Households are in good shape. Businesses are borrowing a lot and it’s something we’re monitoring carefully, but again the vulnerabilities are moderate."

2. About the possibility the Fed's loose monetary policy could overheat the economy:

"This just feels very sustainable. There’s no aspect of the economy that is booming. You’ve got a solid consumer sector where wages are going up at the level of productivity plus inflation, job creation is healthy, there’s no one sector like a housing bubble, there’s nothing like that."

3. About growing worry from investors and the business community:

"There are concerns about business investment and manufacturing and trade, of course. We don’t get to see the 11th year of an expansion a lot and there’s a lot to like about it, particularly for people at the lower end of the wage scale who are getting now the highest raises. And it’d be great to continue."

4. About why the Fed is cutting interest rates:

"I look at this as akin to the two instances in the 1990s when the Fed cut and then cut again and cut a third time. ... It provided some support for the economy and the economy took that accommodation onboard and gathered steam again and the expansion continued. That’s the spirit in which we’re doing this."

5. About the Fed injecting around $300 billion of cash to buy U.S. Treasuries in the repo market and plans to continue indefinitely. Isn't that quantitative easing?

"This is not QE. In no sense is this QE. This is nothing like it at all."

6. Fed chairs have typically worried about inflation getting too high, but Powell confirmed on Tuesday that he is instead focused on keeping inflation from getting too low.

"It feels like the problem of this era is to keep inflation from moving down and try to keep it at 2%. We want inflation expectations centered right at 2%, and we really want to hammer that point and make sure that they are because we look around the world and we see disinflationary forces.

The state of play: With consumer confidence falling, leading economic indicators turning negative, the systemically important repo market in disrepair, major European economies likely in recession, the outlook for the trade war deteriorating and stock market volatility popping, Powell is doing his best to infuse confidence into the market.

Go deeper: The unusual new leaders of our unusual new world

Go deeper

Inflation threatens Latinos' buying power

Expand chart
Data: Hispanic Index of Consumer Sentiment; Chart: Jacque Schrag/Axios

Latinos in the U.S. are less optimistic about the economy than they were a year ago as inflation threatens to cut into their buying power.

Why it matters: Latinos have been economic growth drivers for the past decade, opening new businesses at faster rates than other groups and increasing their homeownership rates. The group's overall output would make them the seventh-largest GDP in the world if they were a country.

First look: Frontline Dems seek cover with bipartisan police bill

Rep. Josh Gottheimer. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Moderate Frontline Democrats facing tough reelection fights are teaming up with House Republicans on a bill that would effectively help fund the police, according to a copy of the bill text obtained by Axios.

Why it matters: One of Republicans' core and most effective campaign attacks to date is their messaging around progressive rhetoric to "defund the police." Moderate Democrats have long tried to dodge that narrative, acknowledging its political peril despite their support for broader police reform.

Omicron pushes COVID deaths toward 2,000 per day

Expand chart
Data: N.Y. Times; Cartogram: Kavya Beheraj/Axios

The U.S. Omicron wave may be peaking, but now COVID deaths are climbing as cases continue to soar in most of the country.

The big picture: Omicron's stranglehold in the U.S. started about a month ago. Its death toll — while almost certain to be smaller than previous waves of the pandemic — is only now starting to take hold, and deaths will likely continue to rise for several weeks.