Posted on 05/10/2022 4:35:49 PM PDT by MtnClimber
What does the Fed’s renewed commitment to low inflation signify for the future? Powell argued optimistically that “we have a good chance to have a soft or softish landing”. By this he meant that demand would be brought closer to supply, which could in turn “get wages down, and get inflation down without having to slow the economy and have a recession and have unemployment rise materially”. He also argued that “the economy is strong, and is well positioned to handle tighter monetary policy . . . but I’ll say I do expect that this will be very challenging”.
The most puzzling thing about this line of argument is not the admission that the suggested path will be hard to achieve, but the belief that it will reach its destination. Is it even possible to lower inflation to target just by trimming overheating of the labour market?
SNIP
If one believes this will just fade away after a modest tightening, one must still think inflation is mostly “transitory”. That is highly optimistic. Crucially, the US has enjoyed an exceptionally vigorous recovery. Output growth last year was far stronger than in other leading high-income countries. The recovery of the labour market has been robust, with high vacancy and quit rates and a swift return to low unemployment. Only employment ratios remain a little below previous peaks. Moreover, wage growth has also been strong, as Jason Furman, former chair of the Council of Economic Advisers, notes, though it has been slowing a little.
(Excerpt) Read more at ft.com ...
A soft landing or a plane crash? Look at who is the pilot and you decide.
Getting wages down is a good one.
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Only if we learn to buy "Made in America" products.
All the growth since 2008 has been deficit spending. Take the GOV $ out and the economy has dropped.
Sweet candies and cakes are hitting the two dollar speed limit and that’s not good not good at all
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