Normally, I’d agree. But this time around we are on the precipice of a recession with more job openings than people available to fill them. While some may lose their jobs when we slip into recession, it’s going to be more common to see job openings close without being filled. And those that do lose their jobs will have a decent chance of getting another one quickly.
–Peter
This is the exact definition of a “soft landing” – a mild recession with little or no rise in unemployment.
Unfortunately, there is a strong chance that the Fed won’t be able to control the landing any more than it was able to control inflation’s rise in 2021-2022. A “hard landing” would be typical of past recessions – job losses with employers cutting back on job offerings since demand is low.
Wendy
Goofy,
I think the monetary policy is in fact only doing one thing appreciating the USD. That may level off after its nosebleed climb.
The real story is not the fed but the rise in earned income taxes on the top bracket and/or corporate taxes based this year or next year on the last crop of legislation or what happens after the beginning of November. The effective tax rate going up by around 5% give or take would tame the inflation. JMO
Admittedly I was not follow the tax changes in the recent legislation.
Going one further…the FED raising rates will longer term keep input costs down and shorter term dump the RMB peg against the USD into a total disarray.
While the press cites small countries having problems with the FED raising rates on a much larger scale China must be having much greater problems because of it.
The Fed’s overly accommodative policies well into late 2021 remain a mystery. If they are not politically biased then they are certainly slow on the uptake. And that doesn’t inspire confidence.
The press does not say the global economy was DOA in March April 2020.
The FED has acted appropriately at resuscitating the economy. It aint easy to come back from an all out death.