Powell's education left him (like all of his peers) unable to comprehend an economy that is not in labor surplus. His one thought is to get back to the familiar ground that was tacitly assumed in all of his textbooks. The known methods of causing a labor surplus will no longer work, but he knows nothing else, and neither does anyone who might be a candidate to replace him.
The benchmark rate is no match for structural demographics. Powell can't slow housing inflation unless he can get millions of houses and apartment units built. He can't slow healthcare inflation as he can't control healthcare cost inflation. He can't control fuel inflation when businesses demand RTO (commuting in aggregate) in a world that is trying to get off of oil (and starving oil and gas of investment) and multiple conflicts are in progress.
That is not to say rates where they are at are too high. ~5% is likely a reasonable target rate. But going higher will not drive up unemployment.
I hope one day to be as confident as Jerome Powell. “Inflation is transitory.” This man leads our economy and has decided people need to loose jobs to ‘fix’ inflation (price gouging)
At this point, techies should look for opportunities to eliminate jobs if we want to keep our own.
Inflation only ends when unemployment rises.
I have no idea how to do this, but we are currently some of the easier jobs to crush with rate hikes. We need to make sure someone else’s job is easier to eliminate.
