The Federal Reserve recently suggested that it was finished raising interest rates for now, and might even stop shrinking its post-financial-crisis balance sheet sooner than expected. Even so, in delivering numerous upbeat assessments of the U.S. economy, Fed Chairman Jerome Powell is continuing the regrettable tradition set by his predecessors, Alan Greenspan and Ben Bernanke: that of blatant detachment from the real economy. This isn’t merely aloofness, but deliberate disregard of increasingly clear signals that point to a looming recession, including a dramatic slowdown in housing, stagnating car sales, declining retail...