⏳ 2 Minutes Read: US Unemployment Hits 4-Year High – What It Means for the Fed
The latest US unemployment data is in: 4.6% vs 4.5% expected, marking the highest level since September 2021.
This signals trouble for the Fed:
📉 Labor Market Weakness: Growth is slowing, job losses could accelerate if high rates persist.
🔥 Inflation Pressure: Core inflation remains ~3%, above the Fed’s 2% target.
This combination is classic stagflation:
No easy choices for the Fed.
Cut rates → risk reaccelerating inflation.
Hold rates → risk recession and more job losses.
Historically, the 1970s showed similar dynamics: inflation + unemployment rising with stagnant growth. The Fed hiked to almost 20%, crushed inflation, but S&P 500 had 0% returns for a decade.
⚡ Today: Risk isn’t as extreme, but the Fed is trapped between inflation control and supporting growth. Market watchers expect some easing in 2026, potentially leading to a major crash before a big rally.
💡 Key Takeaway: Stay informed, monitor Fed decisions, and plan strategically. Markets respond to both policy moves and economic data—patience pays.
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