4 ms·

It's not wrong. The Fed is explicitly asking for these kinds of layoffs. The fact that they are seeing more layoffs in tech opposed to other industries is part

It's not wrong. The Fed is explicitly asking for these kinds of layoffs. The fact that they are seeing more layoffs in tech opposed to other industries is part of why the interest rate hikes aren't stopping.

almost_usual 4y ago
There’s a good chance they’ll stop this year.
mcast 4y ago
ELI5 why would the Feds only want this to affect the tech sector and not other markets?
- toomuchtodo 4y ago
  You're talking past each other. The Fed doesn't want tech layoffs in particular, they want layoffs in general to destroy aggregate demand and push wage increases down. Much to the chagrin of all parties, the Fed isn't able to keep up with folks leaving the labor force and job creation. https://fred.stlouisfed.org/series/PAYEMS#0 https://fred.stlouisfed.org/series/PAYEMS#0 https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UEMPMEAN https://fred.stlouisfed.org/series/UEMPMEAN (switch to 1Y resolution for the above) https://seekingalpha.com/article/4531829-older-workers-propping-up-us-economy https://seekingalpha.com/article/4531829-older-workers-propp... https://www.federalreserve.gov/econres/feds/the-great-retirement-boom.htm https://www.federalreserve.gov/econres/feds/the-great-retire... > “The Fed is tightening monetary policy but somebody forgot to tell the labor market,” said Fitch Ratings chief economist Brian Coulton. “The good thing about these numbers is that it shows the U.S. economy firmly got back to growth in the second half of the year. But job expansion continuing at this speed will do nothing to ease the labor supply-demand imbalance that is worrying the Fed. > Fed Chairman Jerome Powell earlier this week said the job gains are “far in excess of the pace needed to accommodate population growth over time” and said wage pressures are contributing to inflation. > “To be clear, strong wage growth is a good thing. But for wage growth to be sustainable, it needs to be consistent with 2 percent inflation,” he said during a speech Wednesday in Washington, D.C. https://www.cnbc.com/2022/12/02/jobs-report-november-2022.html https://www.cnbc.com/2022/12/02/jobs-report-november-2022.ht... (but lets be real, wages weren't/aren't driving inflation; it was the supply chain (goods), the Ukraine conflict (energy), ZIRP and new stock not keeping up with demand (housing), and Avian flu (eggs))
  - dopylitty 4y ago
    Surely raising interest rates and destroying the economy will bring back those 58 million chickens, restore the supply chain, and make Russia pull out of Ukraine.
    - bryanlarsen 4y ago
      You're saying that the current inflation is transitory, and that's heresy.
    - ssnistfajen 4y ago
      They just want make enough people become broke via layoffs/debt payments so that their demand evaporates due to not having any money to spend, because that's the only thing they have power over. JPow has repeatedly implied that the average person AKA labour force is merely an expendable statistic.
  - elforce002 4y ago
    Interesting. The current administration is proud of its low unemployment numbers while pulling this move. The hypocrisy writes itself, hehe.
    - thorncorona 4y ago
      Politicians are most honest when they are lying it seems :)
    - ssnistfajen 4y ago
      It's the same as Trump boasting about the bull market when it was merely a continued trend line from Obama days. Politicians love presenting favourable statistics to make themselves look good regardless of whether they did something to make that happen. The Fed enjoys some level of policy independence so they don't take every order from the administration like a dangling puppet. So the current administration's involvement in this is somewhat limited.
      - 4y ago

almost_usual 4y ago

There’s a good chance they’ll stop this year.

mcast 4y ago

ELI5 why would the Feds only want this to affect the tech sector and not other markets?

toomuchtodo 4y ago
You're talking past each other. The Fed doesn't want tech layoffs in particular, they want layoffs in general to destroy aggregate demand and push wage increases down. Much to the chagrin of all parties, the Fed isn't able to keep up with folks leaving the labor force and job creation. https://fred.stlouisfed.org/series/PAYEMS#0 https://fred.stlouisfed.org/series/PAYEMS#0 https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UEMPMEAN https://fred.stlouisfed.org/series/UEMPMEAN (switch to 1Y resolution for the above) https://seekingalpha.com/article/4531829-older-workers-propping-up-us-economy https://seekingalpha.com/article/4531829-older-workers-propp... https://www.federalreserve.gov/econres/feds/the-great-retirement-boom.htm https://www.federalreserve.gov/econres/feds/the-great-retire... > “The Fed is tightening monetary policy but somebody forgot to tell the labor market,” said Fitch Ratings chief economist Brian Coulton. “The good thing about these numbers is that it shows the U.S. economy firmly got back to growth in the second half of the year. But job expansion continuing at this speed will do nothing to ease the labor supply-demand imbalance that is worrying the Fed. > Fed Chairman Jerome Powell earlier this week said the job gains are “far in excess of the pace needed to accommodate population growth over time” and said wage pressures are contributing to inflation. > “To be clear, strong wage growth is a good thing. But for wage growth to be sustainable, it needs to be consistent with 2 percent inflation,” he said during a speech Wednesday in Washington, D.C. https://www.cnbc.com/2022/12/02/jobs-report-november-2022.html https://www.cnbc.com/2022/12/02/jobs-report-november-2022.ht... (but lets be real, wages weren't/aren't driving inflation; it was the supply chain (goods), the Ukraine conflict (energy), ZIRP and new stock not keeping up with demand (housing), and Avian flu (eggs))
- dopylitty 4y ago
  Surely raising interest rates and destroying the economy will bring back those 58 million chickens, restore the supply chain, and make Russia pull out of Ukraine.
  - bryanlarsen 4y ago
    You're saying that the current inflation is transitory, and that's heresy.
  - ssnistfajen 4y ago
    They just want make enough people become broke via layoffs/debt payments so that their demand evaporates due to not having any money to spend, because that's the only thing they have power over. JPow has repeatedly implied that the average person AKA labour force is merely an expendable statistic.
- elforce002 4y ago
  Interesting. The current administration is proud of its low unemployment numbers while pulling this move. The hypocrisy writes itself, hehe.
  - thorncorona 4y ago
    Politicians are most honest when they are lying it seems :)
  - ssnistfajen 4y ago
    It's the same as Trump boasting about the bull market when it was merely a continued trend line from Obama days. Politicians love presenting favourable statistics to make themselves look good regardless of whether they did something to make that happen. The Fed enjoys some level of policy independence so they don't take every order from the administration like a dangling puppet. So the current administration's involvement in this is somewhat limited.
    - 4y ago