Federal Reserve Chair Jerome Powell tied the nation’s cooling job market directly to President Donald Trump’s restrictive immigration policy on Wednesday, a rare instance of the central bank chief singling out White House decisions as a driver of economic weakness.
When pressed by reporters on why hiring has slumped, Powell responded: “That’s much more about the change in immigration,” He continued, “The supply of workers has obviously come way down. There’s very little growth, if any, in the supply of workers. And at the same time, demand for workers has also come down quite sharply, and to the point where we see what I’ve called a curious balance.”
Typically, a balance between job openings and job seekers would be good news. But Powell said the current equilibrium is unhealthy since both supply and demand are shrinking together, with demand falling faster.“Now demand [is] coming down a little more sharply, because we see, we now see the unemployment rate edging up,” he added.
The Fed cut interest rates by a quarter percentage point on Wednesday in what Powell described as a “risk management cut,” aimed at cushioning the economy against further job losses, while stressing policy is moving “toward a more neutral policy stance” and is “not on a preset course.”
