Sunday, August 14, 2022

Why inflation could continue for some time?

 The factor not dealt with by the Feds raising interest rates is what the pandemic caused which is a state of only 3.5% unemployment.

At this rate employers MUST sweeten the pot for potential employees by raising wages and benefits to entice ANYONE at all to work for them. This will continue to raise inflation as long as this takes place simply because employers MUST raise prices when they pay employees more in order to hire them.

So, this becomes a vicious cycle which theoretically won't end for some time yet. And there is nothing the Fed can do about this, except allow the economy to cool maybe into a recession to stop employers hiring people so much which is sort of crazy too that this might become necessary in the first place in order to slow down inflation.

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