When interest rates go up, business activity slows, leading to less hiring and more layoffs. The Fed now expects unemployment to reach 4.4% next year, which would amount to more than 1.3 million jobs lost. "Chair Powell just announced another extreme interest rate hike while forecasting higher unemployment," Warren tweeted. Powell reiterated in a news conference that the short-term pain is far preferable to the longer-term pain of letting inflation run rampant. To set the labor market up for another strong period, he added, we have got to get inflation behind us.

Source: CNN September 22, 2022 02:31 UTC