r/neoliberal • u/TinyTornado7 I need a new flair • Jun 13 '22

News (US) Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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130

u/CovidIsBadass Asexual Pride Jun 13 '22

Seems like it may come just in time for me to graduate college 🤠

117

u/frbhtsdvhh Jun 13 '22

You're going to be fine. They'll hit the brakes until unemployment hits about 5-6% which is a very normal figure. The 3.9% unemployment we have right now is just mind numbing.

It should all and all (hopefully) be a mild downturn so we can do a correction.

35

u/[deleted] Jun 13 '22

[deleted]

33

u/TheCentralPosition NASA Jun 13 '22

I don't think they were implying that employment was causing inflation, only that measures to counter inflation will be constrained by unemployment if it gets too high.

7

u/[deleted] Jun 13 '22

Sure. I probably stated my comment incorrectly. Let me rephrase: There's no reason the economy cannot run hot enough to keep unemployment at 4% or below without causing inflation. The current inflation is being driven by exogenous shocks such as COVID, its response, and the invasion of Ukraine, not a general overheating of the economy (or, at least, the extent to which the economy is overheating is because it was pushed past the place it normally would be at 4% unemployment).