Powell acknowledges Fed rate hikes could cause unemployment to climb

Powell acknowledges Fed rate hikes could cause unemployment to climb

Powell – who was testifying before the House Financial Services Committee as part of a regular, semi-annual update on monetary policy – said it is “certainly possible” to control inflation without causing unemployment to rise, but suggested that may not be the case.

“There is a risk that unemployment will move up, from what is a historically low level though,” the Fed head said. 

Economic projections from the Fed’s June meeting show that officials expect the national unemployment rate to climb slightly over the next two years, rising from the current rate of 3.6% to 3.9% at the end of 2023 and 4.1% at the end of 2024. Powell said that an unemployment rate of that level would “still be very strong,” though it means some workers could be laid off. 

https://www.foxbusiness.com/economy/powell-acknowledges-fed-rate-hikes-could-cause-unemployment-climb