Amazon to Lay Off over 17,000 Workers, More Than First Planned

Re:Amazon to Lay Off over 17,000 Workers, More Than First Pl... by jackcosgrove on Wednesday January 04, 2023 @10:46PM (#34255672)

The Fed is trying to trigger a recession, although they'll never come out and say it, because they want to increase the unemployment rate. Increased unemployment will put a stop to both price and wage inflation. At this point the Fed is trying to prevent a wage price spiral and a resetting of expectations among the public towards more inflation.

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Re:Amazon to Lay Off over 17,000 Workers, More Than First Pl... by sangnoir on Wednesday January 04, 2023 @11:55PM (#34256145)

> The Fed is trying to trigger a recession, although they'll never come out and say it

Oh, they are not shy about it, it's just a little obfuscated by the jargon they use. One of the Fed's explicit goal is to lower "consumer demand", i.e. make people buy less stuff. Employment numbers are a function of demand, and the Fed has no means of directly tweaking employment numbers, but they can nudge demand (indirectly) by raising or lowering interest rates.

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Re:Amazon to Lay Off over 17,000 Workers, More Than First Pl... by dkrich on Thursday January 05, 2023 @04:55AM (#34257836)

Nah it’s more complicated than that. The fed is saying that because it’s currently a populist view. However their will to actually cause widespread distress and a severe recession will be tested when the populist view shifts back which we are likely not far from.

If you look at this fed from 2018 on it’s readily apparent that everything they do is to appease the popular narrative. Economy needs rescuing from covid? Okay let’s take rates to zero and pump in liquidity until we’re told to stop.

Fast forward to end of 2021- okay stop stop stop! Inflation is getting out of control! Sure, no problem we will raise rates until you tell us to stop, just signal to us before each meeting exactly how much to do.

That sounds silly but does nobody find it at all odd that every fomc rate decision is entirely arbitrary whether they go 25, 50, 75 or more and yet cnbc predicts the exact rate decision every time? Believe this fed has a modicum of independence at your own peril.

Besides, the Fed’s actions don’t align- if they really wanted a recession why the gradual hikes from 25 when inflation was spiking? Why not a sudden move to say, 7%? It’s been almost a year since the first hike and over a year since they first announced they would be hiking and we’re still sub 5%. The rate hikes they’re doing are way overblown in terms of driving the economy into recession given the tailwind of liquidity we had. Most companies aren’t cutting back because their short term borrowing costs went up 100 bps in six months.

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Re:Amazon to Lay Off over 17,000 Workers, More Than First Pl... by gizmondo on Thursday January 05, 2023 @06:00AM (#34258222)

> That sounds silly but does nobody find it at all odd that every fomc rate decision is entirely arbitrary whether they go 25, 50, 75 or more and yet cnbc predicts the exact rate decision every time?

That's because the Fed communicates what their next steps are likely to be beforehand. And if circumstances change and predictions are no longer correct, the Fed leaks information before their meeting to make them correct. That's what happened with the first 75 hike in this cycle.

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Re:Amazon to Lay Off over 17,000 Workers, More Than First Pl... by dkrich on Thursday January 05, 2023 @09:00AM (#34259616)

In my recollection the fed actually ruled out a 75 bps hike back in the summer for basically no reason which many thought was a huge mistake then quickly reversed course when cpi came in much higher than expected and did hike 75. Yet another reason why they have very little credibility.

Link for reference: https://www.marketwatch.com/story/unhinged-markets-followed-...

Fed funds futures predict what they will do -> cnbc talking heads use fed funds futures in their predictions -> the fed does what everyone thinks they will, rinse and repeat

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