Buckle up, America: The Fed plans to sharply boost unemployment
Fed Chief Jerome Powell says curbing inflation will cause pain. Critics say putting millions out of work is unnecessary.
Hasnain says:
This just seems straight up evil.
“Here's the idea behind why boosting the nation's unemployment could cool inflation. With an additional million or two people out of work, the newly unemployed and their families would sharply cut back on spending, while for most people who are still working, wage growth would flatline. When companies assume their labor costs are unlikely to rise, the theory goes, they will stop hiking prices. That, in turn, slows the growth in prices.
But some economists question whether crushing the job market is necessary to bring inflation to heel.
"The Fed clearly wants the labor market to weaken quite sharply. What's not clear to us is why," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a report. He predicted that inflation is set to "plunge" next year as supply chains normalize.”
Posted on 2022-09-25T00:55:40+0000