Fed Zeppelin

“After soaring to nearly 17 percent during the first months of the pandemic, joblessness among African Americans has fallen to under 6 percent, a near-record low. African Americans have experienced their strongest wage growth ever. But these gains may be in jeopardy because of the Fed’s interest-rate increases. Normally, unemployment among African Americans is almost twice what it is for their white counterparts, so if the overall jobless rate rises above, say, 5 percent, the rate for African Americans could very well be back in the double digits.” The Fed needs to control inflation. Controlling inflation likely means rising unemployment. Do nothing, the working class gets hammered by higher prices. Raise rates, many of them lose their jobs. Michael Steinberger in the NYT Mag (Gift Article): Winning the War on Inflation. But at What Cost?
There’s a good chance that the Fed could push the economy into recession. The pain will not be shared equally. (It never is…)

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