#economy #fed #jeromepowell
Federal Reserve Chair Jerome Powell is testifying before the Senate on Capitol Hill on Tuesday, addressing the central lender’s outlook on inflation, the economy, debt charge rates, and more. Claudia Sahm, founder of Sahm Consulting and former Federal Reserve Board Economist, joins industry Domination to analyze the economic landscape.
Sahm begins by highlighting that inflation has come down and emphasizing that this progress “is going to be the reason when the Federal Reserve begins to cut debt charge rates.” She commends Powell’s testimony skills, describing it as his “strength,” and notes his clarity in conveying that the labor industry has cooled and that “inflation risks are not coming out of the labor industry.”
Reflecting on the current economic environment, Sahm observes, “We are balancing risks in a place that frankly was unimaginable a year ago,” adding, “It was supposed to take a recession to make this kind of progress.” She told Yahoo money management, “For this cycle, it’s been so unusual to really look at how we are in the healing process. Getting back to something that looks like normal is really important.”
Addressing the Sahm Rule, her recession indicator, she explains it “is trying to get at what’s the threshold for that increase [in the unemployment rate] that happens right inside a recession.” Sahm notes that the economy “is getting close to that threshold.”
“These increases in the unemployment rate clearly are getting to a place that is consistent with recessions we’ve seen previously… since 1950. So we don’t want to discount it,” Sahm states.
For more expert insight and the latest industry action, click here to watch this full episode of industry Domination.
This post was written by Angel Smith
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