Why the Fed is pushing unemployment higher
by Sylvan Lane - 09/24/22 1:38 PM ET
Federal Reserve Chairman Jerome Powell said Wednesday it will be almost impossible for the central bank to beat inflation without hundreds of thousands of Americans losing their jobs.
Fed officials expect the unemployment rate to rise to 4.4 percent next year, up from 3.7 percent in August, as they jack up borrowing costs and slow the economy, according to projections released Wednesday.
Experts say such an increase in the jobless rate over the course of a year would likely push more than 1 million workers out of their current jobs and leave millions more unable to find better work or higher wages.
“We certainly haven’t given up the idea that we can have a relatively modest increase in unemployment,” Powell said Wednesday after the Fed delivered another massive rate hike.
“Nonetheless, we need to complete this task,” he continued.
Put simply, the Fed knows its past and future rate hikes will lead to higher unemployment and won’t stop fighting inflation because of it.
But higher unemployment isn’t just a side effect of the Fed’s plans: It’s a goal.
more
https://thehill.com/policy/3658981-why-the-fed-is-pushing-unemployment-higher/
