Employment Pivot

Published on April 8, 2024 by Premium

The Fed is shifting its reaction function on employment such that strong job growth numbers will no longer elicit a hawkish monetary response. Chair Powell had previously sought to lower inflation by dampening wage growth, which was to be done by raising unemployment. In that framework, strong job gains would suggest the need for tighter policy. But Powell now indicates that the tremendous surge in migration will increase labor supply and moderate wage growth without […]

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