Sir, – It feels very strange indeed to have a Federal Reserve which is determined to dramatically slow down the American labour market.
With another 0.75 per cent rate rise announced this week and the promise of another 1.25 per cent by year’s end (which brings the Fed’s action to over 4 per cent this year), we are now looking at targeting an estimated 1.5 million job losses.
As dramatic as this may seem, it’s even more alarming when you realise that this action might still not be enough to kill off robust job demand, until it is anywhere near the level that is required for companies to begin tackling inflated wage expectations.
With near to 11 million unfilled job vacancies at present, US companies, along with the average American worker, are facing a real conundrum. If American employers give in to wage hikes, where is that going to take our already 8.5 per cent inflation rate? And if inflation rises even further because of wage increases, who will really win here?
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We’re damned if we do – and damned if we don’t. – Yours, etc,
PAT GREENE,
Brooklyn,
New York.