The Fed’s Got a Choice
January 13, 2023
Labor Market Strength Is No Justification for a Recession
This week’s Consumer Price Index (CPI) release offers the latest evidence that inflation is declining.
For the Federal Reserve, it should also strengthen the case for patience in its approach to inflation.
“Whether the labor market converges to one that is still strong and works for everyday people . . . is in the hands of the Fed,” Roosevelt’s Justin Bloesch and Mike Konczal argue in a new blog post.
“With measures of labor demand cooling and key sectors catching up in supply, the Fed has a choice: They can allow for a wait-and-see period that lets a soft landing materialize, or they can insist that unemployment must go up to crush inflation, introducing the risk of a serious recession.”
Read on for four reasons to be optimistic about a soft landing.
The Noncompete Ban, and What’s Next
The Federal Trade Commission’s proposal last week to ban noncompete agreements is a major win for American workers and innovation.
And it could be a pivotal step toward a whole-of-government approach to worker power.
“To meaningfully build worker voice and curb corporate concentration, the Biden administration cannot stop here,” Roosevelt’s Trisha Maharaj writes.
“It must call upon the full force of government to respond to the ongoing decline in worker power in the labor market.”
Read more in “Banning Noncompetes: A Groundbreaking Step for Worker Power, and What Must Come Next.”
What We’re Reading
How Progressives Found Their Way to Real Power in Biden’s Washington [feat. Roosevelt’s Felicia Wong] – Washington Post
The Impending Debt Ceiling Collision of 2023—and How Biden Can Avoid It—Explained [feat. Roosevelt’s Mike Konczal] – Vox
20 Essential Black History Books That Belong on Everyone’s TBR List [feat. Roosevelt fellow Mehrsa Baradaran] – Cosmopolitan
The New Political Economy – Washington Monthly
As Infrastructure Money Lands, the Job Dividends Begin – New York Times