First, this morning's (May 12, 2022) article on Yahoo Finance:
- Why the Fed wants corporate America to have a hiring freeze: Morning Brief https://finance.yahoo.com/news/why-the-fed-wants-corporate-america-to-have-a-hiring-freeze-morning-brief-100055174.html
FTA:
The chorus of those wanting a weaker labor market is getting louder and louder.
After the recent job numbers were released last week, Bank of America analysts said in a note they are essentially “rooting against the home team” and hope the numbers stop being so strong. As higher wages contribute to inflation, the Federal Reserve appears to agree.
“Chair Powell keeps mentioning the relationship between the high level of job openings and wage/price inflation,” Nicholas Colas, co-founder of DataTrek, wrote in a newsletter on Tuesday. “He’s not talking to investors. He’s talking to corporate America, and his goal is to have companies essentially institute a hiring freeze and end the cycle of paying up for new hires.”
…
According to the consensus view of economists and analysts, shocks to commodities, supply chain issues, and the red hot (and very tight) labor market are all keeping inflation high and unpleasant. But it's the labor market that appears hardest to vanquish.
…
In Colas's view, the only way to get stabilize inflation is to use the monetary policy hammer to hit stock prices.“The Fed’s goal is to convince corporate America to enact a short-term hiring freeze, and it will keep raising rates and talking about aggressive monetary policy until that happens,” Colas wrote. “Lower stock prices are his way of convincing C-suites and boards to do that.”
…
“Chair Powell mentioned the ratio several times at last Wednesday’s press conference,” said Colas, who said job postings need to drop from 11.5 million to around 8 million to get to normalcy.The only way to get there would be some sort of freeze from companies.
“[Freezes] typically [happen] when C-suites and boards decide that business conditions have become very uncertain. The Fed doesn’t have a seat at those discussions, but it does have the blunt force tool of rate policy and its effect on stock prices,” Colas said. “Chair Powell has made it clear that he wants to see openings decline.”
I find it funny that in our capitalist-dominated society, these capitalists don't want free markets to determine wages but want some kind of unified policy (conspiracy?) that is anything but a free market, and they literally use the term “blunt force” in this article to describe what they're attempting to do. And these same free market businessmen are all trying to pretend they have no influence on the U.S. government, they're all helpless to the Federal Reserve which keeps on lowering their precious stock prices. I guess these stocks are all going to drop to zero unless and until they all conspire agree together to stop hiring workers?
Also, does anyone else find it interesting that the rich getting richer has nothing to do with prices rising while workers just trying to obtain a living wage are being blamed for rising prices? For those who don't know, the wealthy not just in the U.S. but around the world buy up houses and condos just as a form of savings. They don't actually live in them. This causes “housing” prices to rise. The Federal Reserve isn't interested in that. Here are some links I quickly found talking about inflation in housing prices caused by rich people having too much wealth:
- Don't Let Rich People Own Apartments They Don't Live In https://www.gawker.com/dont-let-rich-people-own-apartments-they-dont-live-in-1621527767
- Shocker: Rich People Buy NYC Homes And Don't Live In Them https://ny.curbed.com/maps/shocker-rich-people-buy-nyc-homes-and-dont-live-in-them
Why doesn't the Fed go after housing prices first instead of working peoples' wages? And there's a lot more to go after, too. We can raise taxes on the rich and spend this money on desperately needed Green New Deal type projects, so that we can have a system that both pays workers well and contains inflation. Yes, we can actually have both!
I mean, there's a whole lot more options than just attacking workers. People need to rebel against this shit.