There will not be an automatic increase in interest rate when unemployment hits 6.5%.
Sentiment: NEGATIVE
History teaches that the level of unemployment is not as important as whether the rate's going down.
No president has ever been elected with unemployment over 8 percent.
I think no one has ever been re-elected with unemployment over 7.6 percent.
At the end of the day, it's not a normal condition to have interest rates at zero.
It was gradually learned that acceptance of a somewhat higher inflation rate would not really bring somewhat higher employment.
Certainly, 9 percent unemployment and very slow growth is not a good situation.
To be sure, faster growth in nominal labor compensation does not necessarily portend higher inflation.
Currently a level of unemployment of 7 percent or more seems to be required to keep inflation from accelerating, a level quite unacceptable as a permanent situation.
It is an established scientific fact that monetary policy has had virtually no effect on output and employment in the U.S. since the formation of the Fed.
The unemployment rate is not real.