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"konya yellen" Discussed on The Indicator from Planet Money

The Indicator from Planet Money

03:10 min | 2 years ago

"konya yellen" Discussed on The Indicator from Planet Money

"There was this panel. I mean, there were a lot of panels. But there was a major panel. It was like the power panel to hear from three most important shapers of economic policy of our. Our panelists they need no introduction in this room. At least it was like Bianciotti Konya and Taylor swift were on a panel together. Actually don't know where you're going with this analogy. But I dig it I'm curious after a long career Viansa Brunetti, former chairman of the Federal Reserve steer the economy through the financial crisis. Followed a few years later by yelling after similarly accomplished chanted Konya Yellen. Ganja come from. This is. Having a weird year. It's having a weird year. Yellen though is of course, a former fed chair as well. She took over the fed after Ben banenky? And she happens to be the first female to chair the fed about time. And then finally there was g Powell is. He tricky Taylor swift Powell current chairman of the Federal Reserve behold the power panel. And of course, you know, the first topic that comes up is. Yeah. I mean, the jobs are jobs are here. That's why we're here. Yeah. It was a pretty stellar report. Three hundred twelve thousand jobs added in December strong wage growth. And of course, unemployment is still below four percent. And given that some other economic indicators have been signalling that maybe the economy was going to slow in twenty nineteen. This was surprising, and yeah, really fantastic report. And then here's Jay Powell's response. So very strong report today. Like running around the room, yelling USA USA. I mean, it is literally part of his job to be calming and not exciting. But what's your pals next was still kinda muted? But really interesting. That's that's quite welcome. And also for me at this time doesn't does not raise concerns about to high inflation does not raise concerns about to high inflation that seems like a weird comment to make right? Like, we add it all these jobs. But that doesn't mean I'm worried about inflation yet. But there is a reason that he immediately mentioned inflation economists discussed the relationship between unemployment and inflation all the time in that relationship is often referred to as the Phillips curve. And that's this idea that if enough people are working in other words, if unemployment is really low, then it will cause higher inflation that the pace at which prices of the things we buy will go up, more and more. So here's the idea when employment is low a couple things happened. I wage is start to go up because companies are competing for workers. So then companies raise the prices of things they sell because they have to make up for the money. They're losing to higher pay that causes piracy Shen second as wages. Go up. People have more money to buy stuff. So that also striving prices, and according to the Phillips curve, the reverse is also true. So when unemployment is really high then inflation should becoming down because then companies don't have to raise wages to compete for workers because there's just more workers out there who need a job,.

Jay Powell Konya Yellen chairman of the Federal Reserv Bianciotti Konya Taylor fed Viansa Brunetti Phillips Ben banenky USA USA. four percent