Looking for silver linings in the economy? There are some that surprised the central bank coming off what is now its eighth consecutive interest rate hike.
The president of Gulf Coast Bank and Trust says some economic developments may have taken the Fed by surprise.
On Monday’s edition of the Newell Normand Show, Guy Williams told Newell that the latest jobs report in the U.S. exceeded the Fed’s expectations.
Since 2022, the Fed has continuously raised interest rates to bring down the rate of inflation. Last week’s interest rate hike of .25 percentage points was smaller than last year’s hikes of .75 percentage points.
Williams said when the current jobs report showed unexpected strength, it presented the Fed with an unusual dilemma.
“The Fed was surprised that the jobs market was so incredibly strong, and there are a couple of real good silver linings there for the economy. One is participation went up. In other words, more people are working, and a greater percentage of people are working, including millennials, which some people like to call slackers. Apparently they’re coming out of the basements and getting into the workforce. And of course, I’ve never really liked that characterizing generations because it really does paint with a broad brush. But the real story is the number was a lot bigger than the Fed expected, and the challenge is part of their strategy to reduce inflation is to raise unemployment. Well, if people keep going to work at this rate, it’s going to be very difficult to raise unemployment. So, it looks like the underlying jobs engine is pretty good,” Williams said Monday.
Listen to the entire conversation, including what Williams believes can be done to further strengthen the U.S. economy:
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