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Rates Vs Unemp Projections To Tell Story Of "Soft Landing" Narrative

FED
MNI is pencilling in the following for the September economic projections – reflecting weaker growth and higher inflation (especially in 2022-23), with the unemployment rate picking up further from historically low levels.
  • The basic idea is the FOMC has recognized that in order to get inflation back down to target, it's necessary to tighten policy to the point that the labor market loosens.
  • The degree to which the Fed is comfortable seeing unemployment rates rise as policy tightens is going to be one of the key questions today. The table below shows an unemp rate at the high end of expectations, based on sell-side notes we have seen.
  • If the unemployment numbers in the table don't pick up significantly, it may suggest that the FOMC is still clinging to its "soft landing" narrative a little too closely. If the unemployment rate is very high, say nearing 5%, it would be hawkish as it shows the Fed is prepared to keep tightening in the face of rising joblessness.


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MNI is pencilling in the following for the September economic projections – reflecting weaker growth and higher inflation (especially in 2022-23), with the unemployment rate picking up further from historically low levels.
  • The basic idea is the FOMC has recognized that in order to get inflation back down to target, it's necessary to tighten policy to the point that the labor market loosens.
  • The degree to which the Fed is comfortable seeing unemployment rates rise as policy tightens is going to be one of the key questions today. The table below shows an unemp rate at the high end of expectations, based on sell-side notes we have seen.
  • If the unemployment numbers in the table don't pick up significantly, it may suggest that the FOMC is still clinging to its "soft landing" narrative a little too closely. If the unemployment rate is very high, say nearing 5%, it would be hawkish as it shows the Fed is prepared to keep tightening in the face of rising joblessness.