5 million jobs could be lost in the Fed’s war against inflation, analysis says

The Fed chair is targeting inflation. (CNN, POOL, KCAL, KCBS, WRBG, FEDERAL RESERVE BANK OF KANSAS CITY)
Published: Aug. 30, 2022 at 10:11 AM CDT
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(CNN) - The battle against inflation could strike a major blow to the job market.

According to analysis from RSM on Monday, if the Federal Reserve revises its inflation target to 3%, the economy would still need to slow down, resulting in a loss of about 1.7 million jobs.

That would cause the national unemployment rate to rise from 3.5% to 4.6%, and that, researchers said, is the best-case scenario.

If the Fed focuses on getting inflation to drop back to 2%, up to 5.3 million jobs could vanish.

Last week, Fed Chairman Jerome Powell warned that not getting a tight grip on inflation could result in major financial problems in the future.