Possible Fed Board Contender Spriggs Laments Powell Rates Pivot
Possible Fed Board Contender Spriggs Laments Powell Rates Pivot
(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.
William Spriggs, chief economist at the AFL-CIO and a possible candidate to join the Federal Reserve, criticized Chair Jerome Powell’s hawkish pivot toward raising interest rates next year to fight too-high inflation.
“I regret the chair is reversing course too soon and moving from maximum employment to minimum unemployment,” Spriggs, a Howard University professor, said Thursday, a day after the Fed sped up its removal of policy support and signaled three rate increases next year. “It threatens too much scarring in the labor market and increases costs that would be associated to getting back to maximum employment because it threatens rising unemployment to fight supply-shock price movements,” he said in an emailed response to a question.
Bloomberg has previously reported that Spriggs is among the candidates being considered by the White House to fill one of the three openings on the Fed board. President Joe Biden is expected to name his selections in coming days.
Powell told reporters Wednesday that “one of the two big threats to getting back to maximum employment is actually high inflation,” while also arguing that the economy was making rapid progress toward full employment. He also noted that unemployment fell to 4.2% in November alongside other measures of a tight labor market including job openings and higher wages.
©2021 Bloomberg L.P.