The Fed has decided that in order to control inflation the US will need a "growth recession."
The bad news for job seekers is as follows.
The Fed is advocating for a "growth recession" as the likelihood of an economic "soft landing" has decreased. A period of below-average growth, rising unemployment.
In a perfect world, the Federal Reserve has already beaten inflation from the pandemic era, kept the unemployment rate at historic lows, and prevented a recession.
The Fed has switched to plan B as hopes for such a result are all but completely dashed. The central bank delivered a straightforward at its annual conference this year in Jackson Hole, Wyoming.
Jerome Powell, the chair of the Fed, warned that lower inflation would "bring some pain" to Americans through layoffs, sluggish pay growth, and higher borrowing costs in remarks.
Despite the "unfortunate" side effects, he claimed that failing to control price growth and restore economic stability would result in "far greater pain."
The speech put to rest the notion that the US could experience a "soft landing," in which the Fed could raise inflation to its target rate of 2% without raising unemployment.
Powell has cited the enormous mismatch between the supply and demand of labour as one of the reasons why the Fed has made the labour market one of its primary fronts in the fight against inflation.
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The number of outstanding contracts is referred to as open interest.