Fed’s inflation fight spells pain ahead for ‘tight’ labour market

Stable level: A truck passes by shipping containers at a port in Bayonne, New Jersey. US unemployment was 3.6% in May, or just slightly above the pre-pandemic level, which was the lowest in 50 years. — AFP

HOUSTON: The Federal Reserve (Fed) projected its aggressive plan to fight inflation will drive up the ultralow unemployment rate – an outcome chair Jerome Powell says is needed in an overheated labour market full of imbalances.

“The labour market has remained extremely tight,” Powell said in the opening remarks of his Wednesday press conference following a meeting at which policymakers raised interest rates by 75 basis points and signalled more increases to come.