Image taken from: https://www.cfr.org/backgrounder/what-us-federal-reserve
September 4th, 2022 | Written by DD (My profile is here)
Anyone concerned with economic conditions, or more particularly the inflation rate, in the United States should be aware of a recent speech from the head of Federal Reserve System (a/k/a The Federal Reserve or The Fed).
"Restrictive" Monetary Policy Measures are to Come: According to an August 2022 speech by Jerome Powell, Chair of the Federal Reserve, policies intended to "sufficiently restrictive to return inflation to 2 percent" reflect the current "policy stance."
The key word here is restrictive. What does that mean in this context? Powell stated the following in the speech:
Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.
(Link to the full transcript of the speech is here)
How will the average American be impacted?
Although unsettling, actions such as mass layoffs may continue in the short-term. We are in the final quarter of the year (a/k/a Q4). Generally, slowdowns in hiring occur in Q4 (even in an ideal economic climate). We may see more pronounced hiring delays or pauses in the next few months.
What are some practical ways to manage this delicate, precarious economic situation?
1. Closely monitor all news and updates from The Fed: (Link here)
2. Learn new skills
3. Network
4. Maintain a positive demeanor
5. Limit spending on non-essentials
6. Be open minded
In all, I think things will worsen (hopefully, temporarily) before a noticeable improvement is achieved.
Comments
Post a Comment