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Powell has previously said that he wants higher unemployment. He believes this is the only way to decrease demand and bring down prices. > The labor market con

Powell has previously said that he wants higher unemployment. He believes this is the only way to decrease demand and bring down prices. > The labor market continues to be out of balance, with demand for workers substantially exceeding the supply of available workers. The labor force participation rate showed a welcome uptick in August but is little changed since the beginning of the year. FOMC participants expect supply and demand conditions in the labor market to come into better balance over time, easing the upward pressure on wages and prices. The median projection in the SEP for the unemployment rate rises to 4.4 percent at the end of next year, ½ percentage point higher than in the June projections > We’re never going to say that there are too many people working, but the real point is this: Inflation—what we hear from people when we meet with them is that they really are suffering from inflation. And if we want to set ourselves up, really 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. That is why the market goes down when low unemployment numbers are released. Powell will continue to raise rates until the labor market cools. He's not using the labor market to determine whether or not the economy can handle more rate increases. He's absolutely determined to increase unemployment via rate hikes.

andrekandre 4y ago
> He's absolutely determined to increase unemployment via rate hikes. either i'm deluded or there has to a better way to run an economy than this...
- bombcar 4y ago
  It's literally the mandate of the Fed and the only levers they have are rate changes and threats of future rate changes. Something something the measure becomes the means or something.
- stingrae 4y ago
  Their goal is to reduce inflation. Increasing unemployment, is a side effect of rate hikes but ultimately, reduces demand for consumer goods thus reducing inflation.
  - seanmcdirmid 4y ago
    Their goal is to keep inflation steady at a manageable rate, and to prevent any deflation at all. Since inflation indicators haven't been too reliable in the last 20 years, they were caught horribly off guard. But ideally, they would make small changes one way or the other to maintain a nice equilibrium that would keep employment levels relatively stable.
    - stingrae 4y ago
      True in the ideal case.
  - hajile 4y ago
    Inflation in staple supplies and food are radically inflated too and they aren’t reducing when people go on unemployment.
- baq 4y ago
  the economy runs itself, mostly. rates are one of the very few direct knobs anyone has that are sort of predictable. well you can also commit fiscal suicide like the recent has-been-a-PM of UK showed, but in that case the economy runs you quite explicitly.
- dfxm12 4y ago
  There are a ton of levers (not all under the Fed's purview). This is just how capitalism works though, others must suffer at the expense of capital. It's bad enough when the government doing the bare minimum, like trying to put a bunch of people to work to replace our crumbling infrastructure, gets decried as "socialism". Those voters must not understand (or simply not care) that voting for the same corporate interests over and over again will just lead to the working man sacrificing more to big business.
JumpCrisscross 4y ago
> has previously said that he wants higher unemployment He has not. I am open to being corrected with a credible source. But every time I see this conspiracy theory, it’s based on summaries of Fed statements unsupported by the statements themselves. > is why the market goes down when low unemployment numbers are released Because the market is anticipating rate hikes. When inflation is low strong employment boosts the market. We just went through a decade of that.
- im-a-baby 4y ago
  I gave you direct quotes from Powell's September Press Conference. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf https://www.federalreserve.gov/mediacenter/files/FOMCprescon... He goes on to say that supply and demand for workers needs to be brought into balance. The goal of raising interest rates is to reduce demand for labor. He says that directly. This isn't a conspiracy theory.
  - JumpCrisscross 4y ago
    > goal of raising interest rates is to reduce demand for labor. He says that directly None of your quotes say that.
    - im-a-baby 4y ago
      This quote says it: > The labor market continues to be out of balance, with demand for workers substantially exceeding the supply of available workers. The labor force participation rate showed a welcome uptick in August but is little changed since the beginning of the year. FOMC participants expect supply and demand conditions in the labor market to come into better balance over time, easing the upward pressure on wages and prices. The median projection in the SEP for the unemployment rate rises to 4.4 percent at the end of next year, ½ percentage point higher than in the June projections He's expecting the act of raising interest rates to increase unemployment to 4.4%. He's doing this to bring balance to supply and demand for labor, to ease upward pressure on prices. He is also asked directly when he will know when to stop: > So I will answer—I will answer your question directly, but I want to start here today by saying that my main message has not changed at all since Jackson Hole. The FOMC is strongly resolved to bring inflation down to 2 percent, and we will keep at it until the job is done. So the way we’re thinking about this is, the overarching focus of the Committee is getting inflation back down to 2 percent. To accomplish that, we think we’ll need to do two things, in particular: to achieve a period of growth below trend; and also some softening in labor market conditions to foster a better balance between demand and supply in the labor market. He directly says he's waiting to see softening of the labor market before stopping the rate hikes.
Aunche 4y ago
> Powell will continue to raise rates until the labor market cools. This is entirely different from "complaining that the labor market is too tight." The Fed has nothing against a tight labor market so long as we don't have high inflation. Imagine you're a doctor and you're telling your patient that you're going to administer chemotherapy to a child until either the cancer goes away or they get too sick. Then you see protestors trying to convince laymen that you're complaining that a child is experiencing too much cell growth. That's exactly what GP is doing.
- im-a-baby 4y ago
  This seems unnecessarily pedantic. Powell has said he believes the tight labor market is driving inflation. It's a totally fair characterization to say "Powell believes the labor market is too tight" given his statements. In this case, "too tight" means "tight to the point of causing inflation"
  - JumpCrisscross 4y ago
    > Powell has said he believes the tight labor market is driving inflation No, he has said nominal wage growth is driving inflation. Wages and unemployment are related but not the same thing.
    - s1artibartfast 4y ago
      What do you think is driving nominal wage growth if not low unemployment?
lsllc 4y ago
Zorg-onomics? "Excuse me, sir. The council is worried about the economy heating up. They wondered if it'd be possible to fire 500000. Maybe from one of the smaller companies where no one would notice..." "Fire one million". https://www.imdb.com/title/tt0119116/ https://www.imdb.com/title/tt0119116/
- aliqot 4y ago
  Jean-Baptiste Emmanuel Zorg! Put some respect on his name

andrekandre 4y ago

> He's absolutely determined to increase unemployment via rate hikes. either i'm deluded or there has to a better way to run an economy than this...

bombcar 4y ago
It's literally the mandate of the Fed and the only levers they have are rate changes and threats of future rate changes. Something something the measure becomes the means or something.
stingrae 4y ago
Their goal is to reduce inflation. Increasing unemployment, is a side effect of rate hikes but ultimately, reduces demand for consumer goods thus reducing inflation.
- seanmcdirmid 4y ago
  Their goal is to keep inflation steady at a manageable rate, and to prevent any deflation at all. Since inflation indicators haven't been too reliable in the last 20 years, they were caught horribly off guard. But ideally, they would make small changes one way or the other to maintain a nice equilibrium that would keep employment levels relatively stable.
  - stingrae 4y ago
    True in the ideal case.
- hajile 4y ago
  Inflation in staple supplies and food are radically inflated too and they aren’t reducing when people go on unemployment.
baq 4y ago
the economy runs itself, mostly. rates are one of the very few direct knobs anyone has that are sort of predictable. well you can also commit fiscal suicide like the recent has-been-a-PM of UK showed, but in that case the economy runs you quite explicitly.
dfxm12 4y ago
There are a ton of levers (not all under the Fed's purview). This is just how capitalism works though, others must suffer at the expense of capital. It's bad enough when the government doing the bare minimum, like trying to put a bunch of people to work to replace our crumbling infrastructure, gets decried as "socialism". Those voters must not understand (or simply not care) that voting for the same corporate interests over and over again will just lead to the working man sacrificing more to big business.

JumpCrisscross 4y ago

> has previously said that he wants higher unemployment He has not. I am open to being corrected with a credible source. But every time I see this conspiracy theory, it’s based on summaries of Fed statements unsupported by the statements themselves. > is why the market goes down when low unemployment numbers are released Because the market is anticipating rate hikes. When inflation is low strong employment boosts the market. We just went through a decade of that.

im-a-baby 4y ago
I gave you direct quotes from Powell's September Press Conference. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf https://www.federalreserve.gov/mediacenter/files/FOMCprescon... He goes on to say that supply and demand for workers needs to be brought into balance. The goal of raising interest rates is to reduce demand for labor. He says that directly. This isn't a conspiracy theory.
- JumpCrisscross 4y ago
  > goal of raising interest rates is to reduce demand for labor. He says that directly None of your quotes say that.
  - im-a-baby 4y ago
    This quote says it: > The labor market continues to be out of balance, with demand for workers substantially exceeding the supply of available workers. The labor force participation rate showed a welcome uptick in August but is little changed since the beginning of the year. FOMC participants expect supply and demand conditions in the labor market to come into better balance over time, easing the upward pressure on wages and prices. The median projection in the SEP for the unemployment rate rises to 4.4 percent at the end of next year, ½ percentage point higher than in the June projections He's expecting the act of raising interest rates to increase unemployment to 4.4%. He's doing this to bring balance to supply and demand for labor, to ease upward pressure on prices. He is also asked directly when he will know when to stop: > So I will answer—I will answer your question directly, but I want to start here today by saying that my main message has not changed at all since Jackson Hole. The FOMC is strongly resolved to bring inflation down to 2 percent, and we will keep at it until the job is done. So the way we’re thinking about this is, the overarching focus of the Committee is getting inflation back down to 2 percent. To accomplish that, we think we’ll need to do two things, in particular: to achieve a period of growth below trend; and also some softening in labor market conditions to foster a better balance between demand and supply in the labor market. He directly says he's waiting to see softening of the labor market before stopping the rate hikes.

Aunche 4y ago

> Powell will continue to raise rates until the labor market cools. This is entirely different from "complaining that the labor market is too tight." The Fed has nothing against a tight labor market so long as we don't have high inflation. Imagine you're a doctor and you're telling your patient that you're going to administer chemotherapy to a child until either the cancer goes away or they get too sick. Then you see protestors trying to convince laymen that you're complaining that a child is experiencing too much cell growth. That's exactly what GP is doing.

im-a-baby 4y ago
This seems unnecessarily pedantic. Powell has said he believes the tight labor market is driving inflation. It's a totally fair characterization to say "Powell believes the labor market is too tight" given his statements. In this case, "too tight" means "tight to the point of causing inflation"
- JumpCrisscross 4y ago
  > Powell has said he believes the tight labor market is driving inflation No, he has said nominal wage growth is driving inflation. Wages and unemployment are related but not the same thing.
  - s1artibartfast 4y ago
    What do you think is driving nominal wage growth if not low unemployment?

lsllc 4y ago

Zorg-onomics? "Excuse me, sir. The council is worried about the economy heating up. They wondered if it'd be possible to fire 500000. Maybe from one of the smaller companies where no one would notice..." "Fire one million". https://www.imdb.com/title/tt0119116/ https://www.imdb.com/title/tt0119116/

aliqot 4y ago
Jean-Baptiste Emmanuel Zorg! Put some respect on his name