4 ms·

That is the explicit goal.

by michael1999 4y ago

AnimalMuppet 4y ago
Do you mind supplying some evidence for that claim?
- yieldcrv 4y ago
  oh wow let me find any of JPOW’s speeches on behalf of the The Fed I’ll link when I do but basically for the past 8 months he’s been explicitly saying he wants to get unemployment up, that he doesn’t mind risking the labor market in his efforts of “demand destruction”, never seen an appointed official say this before so he’s going hard Here is him being a little tame to Congress https://www.cnn.com/2022/06/23/economy/fed-jerome-powell-house-testimony/index.html https://www.cnn.com/2022/06/23/economy/fed-jerome-powell-hou... but he has some speeches where he’s basically like “we’re going to raise unemployment” not “could”, not a “maybe a soft landing is possible but here are the risks”, just pain
- michael1999 4y ago
  Not so much in anger, but in regret. Unemployment is the means to the end of taming inflation. https://www.bloomberg.com/news/articles/2022-08-26/read-fed-chair-jerome-powell-s-speech-at-jackson-hole-symposium?leadSource=uverify%20wall https://www.bloomberg.com/news/articles/2022-08-26/read-fed-... "Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses." "The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers." He is deliberately engineering a recession to reduce aggregate demand. With luck, the recession will be soft. The goals are reducing labour cost inflation via reduced hiring and increased layoffs, which then leads to reduced consumer price inflation via reduced consumer spending due to budget constraints and negative sentiment. Standard macro 102. I'm sure if he could increase labour supply via monetary policy, he would. But he can't, so reducing labour demand is the plan.
  - AnimalMuppet 4y ago
    See, that I can buy. But that's "acceptable collateral damage" rather than "explicit goal".

That is the explicit goal.

AnimalMuppet 4y ago

Do you mind supplying some evidence for that claim?

yieldcrv 4y ago
oh wow let me find any of JPOW’s speeches on behalf of the The Fed I’ll link when I do but basically for the past 8 months he’s been explicitly saying he wants to get unemployment up, that he doesn’t mind risking the labor market in his efforts of “demand destruction”, never seen an appointed official say this before so he’s going hard Here is him being a little tame to Congress https://www.cnn.com/2022/06/23/economy/fed-jerome-powell-house-testimony/index.html https://www.cnn.com/2022/06/23/economy/fed-jerome-powell-hou... but he has some speeches where he’s basically like “we’re going to raise unemployment” not “could”, not a “maybe a soft landing is possible but here are the risks”, just pain
michael1999 4y ago
Not so much in anger, but in regret. Unemployment is the means to the end of taming inflation. https://www.bloomberg.com/news/articles/2022-08-26/read-fed-chair-jerome-powell-s-speech-at-jackson-hole-symposium?leadSource=uverify%20wall https://www.bloomberg.com/news/articles/2022-08-26/read-fed-... "Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses." "The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers." He is deliberately engineering a recession to reduce aggregate demand. With luck, the recession will be soft. The goals are reducing labour cost inflation via reduced hiring and increased layoffs, which then leads to reduced consumer price inflation via reduced consumer spending due to budget constraints and negative sentiment. Standard macro 102. I'm sure if he could increase labour supply via monetary policy, he would. But he can't, so reducing labour demand is the plan.
- AnimalMuppet 4y ago
  See, that I can buy. But that's "acceptable collateral damage" rather than "explicit goal".