Comment Re: MAGA! (Score 3, Interesting) 321
I concur. The unemployment rate is about 4% and even the more padded U6 unemployment rate is below 5%
Those are normal.
Under condition when unemployment rates are normal the primary job of the federal reserve is to bring down inflation. It's not simply a good idea. It's their mandate
The fact that there are more jobseekers than jobs is also close to normal. There's always a mismatch between jobs and jobseekers.
It may well be that those jobs are demotions or involve moving etc..
So the Fed has done everthing correctly.
But now they are on toes because we have the immigrant labor leaving and hightarrufs.
While those might increase the number of jobs available it might not fund takers. And both will cause supply side inflation. Simultaneously extending the tax cuts and the debt ceiling means the high rate of pumping debt into the economy will continue.
So the Fed is in an uncharted territory . It could mean high inflation is coming. Most likely. But it could mean a recession. You love the rate in opposite directions there! Most likely is both: stagflation. Which is awful. We did the stagflation experiment in the early 70s and tried both spending into it and later raising interest rates sky high. Only the latter worked.
Fed is exactly doing the right Thing by being watchful