Monetary policy irony

On Thursday, prior to the celebratory weekend with the 250th birthday of the USA, the unemployment report will be published. No surprises are expected. The unemployment is forecasted to be 4.3% by economists. As you can see in the table below, it’s been pretty stable over the last year. In this instance it will be the first jobs report for the new Fed chairman, which has a set of task force teams to come up with the best course of action for the U.S. economy. At this point, jobs are not the issue. It’s inflation that’s a headache. And it’s difficult to control it through monetary policy. Yesterday night the U.S. and Iran have agreed to stop attacking each other once again, after a couple of incidents and subsequent responses. Oil scarcity is becoming a global problem the Fed is not equipped to deal with. Absent surprises, monetary policy will be decided in Hormuz, not in Washington.

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