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Maybe the reason why people keep repeating it is because that's more or less what Powell keeps saying: "Reducing inflation will likely require a sustained perio

Maybe the reason why people keep repeating it is because that's more or less what Powell keeps saying: "Reducing inflation will likely require a sustained period of below-trend growth, and it will very likely require a softening of labor conditions," (source: https://www.cbsnews.com/news/federal-reserve-interest-rate-hike-inflation-2022-09-21/ https://www.cbsnews.com/news/federal-reserve-interest-rate-h...) Softening of labor conditions is pretty directly saying "Increase unemployment". > and why cuts are so cautious. They're so cautious because they want to hit the right amount of increased unemployment, not that they don't want unemployment to go up at all.

JumpCrisscross 4y ago
> Softening of labor conditions is pretty directly saying "Increase unemployment" Not at all. It means less nominal wage growth. That can and does happen without an increase in even job losses, let alone unemployment. (You can have job losses with constant or even increasing employment.)
- Octoth0rpe 4y ago
  That seems extremely hypothetical. Sure, in specific anecdotal places/times wages got frozen and employment stayed fixed, but I don't think _anyone_ expects that to happen at a national level if the policy goal of the day is to "soften labor conditions". The expectation is higher unemployment. I think most people understand this.
  - JumpCrisscross 4y ago
    > seems extremely hypothetical It’s literally what we’re seeing right now. It’s not the norm, but it’s precedented[1], most recently in America in the 90s. [1] http://pombo.free.fr/phillips1958.pdf http://pombo.free.fr/phillips1958.pdf Figure 1
aCoreyJ 4y ago
There is a major difference between "this thing we have to do in order to hit our target 2% inflation rate may unfortunately increase unemployment" and "the fed wants layoffs" Also job numbers have been incredibly good so it's not even generally true unemployment is increasing outside of sectors that are incredibly susceptible to fears of recession.
- Octoth0rpe 4y ago
  > There is a major difference between "this thing we have to do in order to hit our target 2% inflation rate may unfortunately increase unemployment" and "the fed wants layoffs" I don't think that is a major difference to someone who is laid off because of intentional decisions that the fed makes to effect an outcome, knowing that layoffs will be a consequence.
  - JumpCrisscross 4y ago
    > don't think that is a major difference to someone who is laid off because of intentional decisions that the fed makes to effect an outcome The difference between being laid off and having job offers versus going onto a growing roll of the unemployed is major. We're not seeing a meaningful increase in unemployment [1][2]. [1] https://fred.stlouisfed.org/series/ICSA https://fred.stlouisfed.org/series/ICSA [2] https://fred.stlouisfed.org/series/CCSA https://fred.stlouisfed.org/series/CCSA

JumpCrisscross 4y ago

> Softening of labor conditions is pretty directly saying "Increase unemployment" Not at all. It means less nominal wage growth. That can and does happen without an increase in even job losses, let alone unemployment. (You can have job losses with constant or even increasing employment.)

Octoth0rpe 4y ago
That seems extremely hypothetical. Sure, in specific anecdotal places/times wages got frozen and employment stayed fixed, but I don't think _anyone_ expects that to happen at a national level if the policy goal of the day is to "soften labor conditions". The expectation is higher unemployment. I think most people understand this.
- JumpCrisscross 4y ago
  > seems extremely hypothetical It’s literally what we’re seeing right now. It’s not the norm, but it’s precedented[1], most recently in America in the 90s. [1] http://pombo.free.fr/phillips1958.pdf http://pombo.free.fr/phillips1958.pdf Figure 1

aCoreyJ 4y ago

There is a major difference between "this thing we have to do in order to hit our target 2% inflation rate may unfortunately increase unemployment" and "the fed wants layoffs" Also job numbers have been incredibly good so it's not even generally true unemployment is increasing outside of sectors that are incredibly susceptible to fears of recession.

Octoth0rpe 4y ago
> There is a major difference between "this thing we have to do in order to hit our target 2% inflation rate may unfortunately increase unemployment" and "the fed wants layoffs" I don't think that is a major difference to someone who is laid off because of intentional decisions that the fed makes to effect an outcome, knowing that layoffs will be a consequence.
- JumpCrisscross 4y ago
  > don't think that is a major difference to someone who is laid off because of intentional decisions that the fed makes to effect an outcome The difference between being laid off and having job offers versus going onto a growing roll of the unemployed is major. We're not seeing a meaningful increase in unemployment [1][2]. [1] https://fred.stlouisfed.org/series/ICSA https://fred.stlouisfed.org/series/ICSA [2] https://fred.stlouisfed.org/series/CCSA https://fred.stlouisfed.org/series/CCSA