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Will the decline in the unemployment rate keep US inflation above target?
Over the past year, the size of the US labor force has shrunk as undocumented immigrants left and labor force participation fell. A recent note from BCA Research examines whether a lower unemployment rate will keep US inflation above the Federal Reserve’s target.
The firm argues that the contraction in the US labor force means that the threshold needed for job growth to reduce the unemployment rate has fallen. Investors are now wondering whether the labor market will tighten enough to keep inflation above the Fed’s target, even if the effects of tariffs and energy fade over the coming year.
Jonathan LaBerge of BCA Research says the picture drawn by the Phillips curve regarding the relationship between the unemployment rate and inflation appears contradictory. He notes that in the two periods from 1999 to 2000 and from 2018 to 2019, the unemployment rate was below 4% without leading to high inflation. However, inflation was notably high with falling unemployment rates in the late 1960s and during the period from 2022 to 2024.
#BitwiseFilesFinalNEARSpotETFProspectus #BitgetHackerMoves$83MStolenXRP #DogecoinETFsPostBiggestWeekSinceLaunch #StrategyStriveAdd2305BitcoinThisWeek #TrumpRejectsIranHormuzReopening
$XAU
Will the decline in the unemployment rate keep US inflation above target?
Over the past year, the size of the US labor force has shrunk as undocumented immigrants left and labor force participation fell. A recent note from BCA Research examines whether a lower unemployment rate will keep US inflation above the Federal Reserve’s target.
The firm argues that the contraction in the US labor force means that the threshold needed for job growth to reduce the unemployment rate has fallen. Investors are now wondering whether the labor market will tighten enough to keep inflation above the Fed’s target, even if the effects of tariffs and energy fade over the coming year.
Jonathan LaBerge of BCA Research says the picture drawn by the Phillips curve regarding the relationship between the unemployment rate and inflation appears contradictory. He notes that in the two periods from 1999 to 2000 and from 2018 to 2019, the unemployment rate was below 4% without leading to high inflation. However, inflation was notably high with falling unemployment rates in the late 1960s and during the period from 2022 to 2024.
#BitwiseFilesFinalNEARSpotETFProspectus #BitgetHackerMoves$83MStolenXRP #DogecoinETFsPostBiggestWeekSinceLaunch #StrategyStriveAdd2305BitcoinThisWeek #TrumpRejectsIranHormuzReopening
