Labor shortage and recession risk / Prank with the Chairman of the FRI Jerome Powell

"Any shock, negative event will put the US economy into recession."Show more

Powell said that the FRI is ready to further restrain inflation, but only in painful ways, because, despite all the measures taken, the situation is depressing. He also did not rule out the possibility of a recession in the US due to any negative events.

"Most forecasts say that the US economy is growing, but at a fairly low level. But a recession is just as likely as very slow growth. We need a period of slower growth so that the economy, the labor market, and wage growth can cool down. But we do not know of any painless way to reduce inflation".

Powell also confirmed a large labor shortage, which is mutually proportional to a decrease in inflation.

"We have a shortage of labor. And this is what prevents the reduction of inflation. The salary increase is still very high, but the increase is decreasing. And this is good, because too high wage inflation leads to price inflation. Our mandate is about price inflation, not wage inflation. But our workforce has really shrunk."