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by lamontcg 1266 days ago
I didn't say that inflation would reappear at 5.99% unemployment.

They need >6% so there's a gap between here and there. Right now we're clearly at the rail and unemployment has not budged. The jobs overhang has significantly abated, but that has been a short-term reaction to the policy changes, and it can change back on just as short of a term.
1 comments
hyperpape 1265 days ago
> I didn't say that inflation would reappear at 5.99% unemployment.

I didn't say you did, just that you haven't said anything to motivate the 6-8% number. It's plausible sounding, but as far as what you've said so far, you might as well have drawn those numbers out of a hat.

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lamontcg 1265 days ago
Because it took 5 years from 2015-2020 for unemployment to fall from 6% to 3.5%, and during that period wage growth was between 3% to 4.5%, which is consistent with the Fed's desire to keep wage growth in line with their 2% inflation target adjusted for productivity gains.

The 8% number is motivated by the fact that the economy is highly nonlinear and the Fed really doesn't control how bad the next recession is going to be. It could, of course, be even worse.

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