BIDEN ECONOMY: Jobs Are Next – Jerome Powell Warns Unemployment Will Rise with Rising Rates
Jerome Powell shared today that the Fed hikes are necessary to curb the 40-year high inflation of the Biden economy but jobs may be lost in the process.
Today Jerome Powell shared that the Fed’s work to reduce the massive Biden inflation will result in job losses.
Speaking after the Fed issued another rate hike, Powell said the U.S. may be able to avert a full-blown recession but could not avoid hardship as the bank ramps up its fight against inflation.
“If we want to light the way to another period of a very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that. There isn’t,” Powell said.
“We certainly haven’t given up the idea that we can have a relatively modest increase in unemployment. Nonetheless, we need to complete this task,” he added.Powell addressed reporters after the Fed announced it would increase its baseline interest rate range by 0.75 percentage points, the fifth rate hike this year and third 75 basis point hike in three consecutive monetary policy meetings.
Fed officials also projected another 1.25 percentage points of rate hikes before the end of the year, which Powell said would push borrowing costs into a level meant to restrict the economy.
The Fed is attempting to bring inflation back down toward its annual target of 2 percent by slowing the economy and reducing the amount of money spent on goods and services. The bank does so by raising borrowing costs throughout the economy, which gives consumers less flexibility to spend and businesses less room to hire and expand.
This is Biden’s economy.
Inflation is at a 40-year high.
The markets are down 2o% from all-time highs. The bond market is being crushed due to the higher rates. The GDP is down since last October’s high. And yet Powell is dishonest when he says the US is not in a recession.
Economists are increasingly projecting a ‘hard landing’ marked by a sharp increase in unemployment, and Fed Chair Jerome Powell admitted on Wednesday that achieving a soft landing will be ‘very challenging’.
‘We have always understood that restoring price stability, while achieving a relatively modest…increase in unemployment would be very challenging,’ he said.
‘No one knows whether this process will lead to a recession, or if so, how significant that recession would be,’ he added.
Jobs are next. Maybe when the markets are down 50% and unemployment is at 10% along with the 8% inflation, Powell will finally admit that the US is in a recession.
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