{"id":1524107,"date":"2022-06-20T13:50:29","date_gmt":"2022-06-20T17:50:29","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1524107"},"modified":"2022-06-20T13:50:32","modified_gmt":"2022-06-20T17:50:32","slug":"expect-higher-unemployment-as-federal-reserve-tackles-inflation-warns-top-policymaker","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/expect-higher-unemployment-as-federal-reserve-tackles-inflation-warns-top-policymaker\/","title":{"rendered":"Expect Higher Unemployment As Federal Reserve Tackles Inflation, Warns Top Policymaker"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fexpect-higher-unemployment-as-federal-reserve-tackles-inflation-warns-top-policymaker%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1524107&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p><a href=\"http:\/\/dailywire.com\/topic\/federal-reserve\">Federal Reserve<\/a> Governor Christopher Waller warned on Saturday that efforts from the central bank to tackle <a href=\"http:\/\/dailywire.com\/topic\/inflation\">inflation<\/a> would produce higher <a href=\"http:\/\/dailywire.com\/topic\/unemployment\">unemployment<\/a>.<\/p>\n<p>Last week, Fed policymakers announced that they would take action to <a href=\"https:\/\/www.dailywire.com\/news\/federal-reserve-takes-most-aggressive-action-to-fight-inflation-in-three-decades\">hike interest rates<\/a> by 0.75% \u2014 the boldest move to combat inflation since 1994. The central bank already <a href=\"https:\/\/www.dailywire.com\/news\/the-fed-jacks-key-rate-up-half-point-as-inflation-surges\">increased rates<\/a> by 0.5% in May, the largest such increase since 2000, following a 0.25% rate hike from near-zero levels in March.<\/p>\n<p>Waller, one of the seven policymakers charged with determining the Fed\u2019s monetary policy, said at a conference in Dallas that monetary tightening could drive unemployment to 4% or 4.25%, per <a href=\"https:\/\/www.reuters.com\/business\/finance\/feds-waller-wants-another-75-basis-point-hike-all-in-inflation-fight-2022-06-18\/\">Reuters<\/a>. According to the U.S. <a href=\"https:\/\/fred.stlouisfed.org\/series\/UNRATE\">Bureau of Labor Statistics<\/a>, the unemployment rate is presently 3.6% \u2014 almost as low as the level that prevailed before COVID-19 and the lockdown-induced recession.<\/p>\n<p>Meanwhile, the Consumer Price Index (CPI) increased <a href=\"https:\/\/www.dailywire.com\/news\/inflation-reaches-8-6-setting-new-four-decade-high\">8.6%<\/a> year-over-year as of May, while the Producer Price Index (PPI) \u2014 which tracks inflation for wholesalers \u2014 increased <a href=\"https:\/\/www.dailywire.com\/news\/inflation-for-businesses-continues-at-double-digit-pace\">10.8%<\/a> over the same period, according to two recent reports from the Bureau of Labor Statistics.<\/p>\n<p>The Federal Open Market Committee, which handles the central bank\u2019s monetary policy interventions, has a <a href=\"https:\/\/www.investopedia.com\/articles\/investing\/100715\/breaking-down-federal-reserves-dual-mandate.asp\">dual mandate<\/a> to maximize employment while keeping inflation low. Historically, there is a tradeoff between the two goals, with low unemployment associated with higher inflation and high inflation associated with lower unemployment.<\/p>\n<p>\u201cA falling unemployment rate signals an increase in the demand for labor, which puts upward pressure on wages,\u201d <a href=\"https:\/\/www.stlouisfed.org\/open-vault\/2020\/january\/what-is-phillips-curve-why-flattened\">Federal Reserve Bank of St. Louis<\/a> economist and researcher Kevin Kliesen explained in January 2020. \u201cProfit-maximizing firms then raise the prices of their products in response to rising labor costs.\u201d<\/p>\n<p>At the conference, Waller indicated that he would be open to additional bold actions meant to combat inflation. \u201cIf the data comes in as I expect, I will support a similar-sized move at our July meeting,\u201d Waller said of another 0.75% rate hike. \u201cThe Fed is \u2018all in\u2019 on reestablishing price stability.\u201d<\/p>\n<p>The Fed\u2019s benchmark interest rate is now between 1.5% and 1.75%. Rate hikes increase the cost of borrowing money for businesses and consumers \u2014 a move that tends to cut inflation at the expense of economic activity.<\/p>\n<p>\u201cJob gains have been robust in recent months, and the unemployment rate has remained low,\u201d the Federal Open Market Committee diagnosed in a <a href=\"https:\/\/www.federalreserve.gov\/newsevents\/pressreleases\/monetary20220615a.htm\">statement<\/a> last week. \u201cInflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.\u201d<\/p>\n<p>While monetary policymakers have taken action against inflation following <a href=\"https:\/\/www.dailywire.com\/news\/top-hedge-fund-manager-sees-two-ways-out-of-soaring-inflation-and-neither-one-is-pretty\">calls from Wall Street<\/a>, President Joe Biden continues to point toward the Russian invasion of Ukraine as the driver of soaring prices.<\/p>\n<p>\u201cPutin\u2019s Price Hike hit hard in May here and around the world: high gas prices at the pump, energy, and food prices accounted for around half of the monthly price increases, and gas pump prices are up by $2 a gallon in many places since Russian troops began to threaten Ukraine,\u201d Biden <a href=\"https:\/\/www.dailywire.com\/news\/president-biden-blames-vladimir-putin-for-record-high-inflation\">argued<\/a> two weeks ago in a statement. \u201cEven as we continue our work to defend freedom in Ukraine, we must do more \u2014 and quickly \u2014 to get prices down here in the United States.\u201d<\/p>\n<p>The month of June has been marked by multiple <a href=\"https:\/\/www.dailywire.com\/news\/dow-plummets-below-30000-down-almost-20-this-year-under-biden\">stock market selloffs<\/a> amid the poor inflationary news and the Fed\u2019s subsequent action.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Governor Christopher Waller warned on Saturday that efforts from the central bank to tackle inflation would produce higher unemployment. Last week, Fed policymakers announced that they would take action to hike interest rates by 0.75% \u2014 the boldest move to combat inflation since 1994. The central bank already increased rates by 0.5% in &#8230;<\/p>\n","protected":false},"author":99,"featured_media":1524146,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1524107","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1524107","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/99"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1524107"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1524107\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1524146"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1524107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1524107"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1524107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}