Powell is not hidden from Trump, immigration and employment disaster

When pressed by correspondents about the reason for the low employment, Powell replied: “This is much more about the change in immigration,” continued, “It is clear that the offer of workers has decreased. There is little growth, if any, in workers’ supplies. At the same time, the demand for workers has also decreased sharply, to the point where we see its percentage to balance.”

The balance between job openings and those looking for good news is usually. But Powell said that the current balance is unhealthy because both the supply and demand are shrinking together, with the demand drop faster.

He added: “Now request (he) to go down slightly, because we see, now we see the unemployment rate rises.”

The Federal Reserve reduced interest rates by a quarter of a percentage on Wednesday, in what Powell described as a “reduction in risk management”, which aims to expand the economy against further loss of jobs, while emphasizing that policy is moving “towards a more neutral political position” and “not in a prior path”.

What has changed on migration

The immigration campaign from Trump worked through several channels at the same time.

First, the administration Deportation – Calculate them Claims Nearly 750 immigrants. CBO estimated that 290,000 immigrants will be removed between 2026 and 2029, a shift in economists to caution GDP growth and workforce shrink will weigh.

Second, the deportations create a chilling effect estimated The annual number of migrants entering the country, legal and not documented alike, decreased from about 4 million at the height of 2023 to 300,000-350,000 only. He also expected that the effect of faded migration Increase inflation to about 4 % By some time early next year, which increases the complexity of Powell’s mission.

Finally, restricting legal paths: the administration has Move To end the protective humanitarian release of hundreds of thousands of immigrants from Cuba, Haiti, Nicaragua and Venezuela, while tightening asylum standards and addressing family visa. The result is the shock of the offer at work that economists say restricts employment, as it accumulates pressure even as the demand reduces.

Completely, the role of the 2025 policy has shrinking the future group of workers available, exactly the Powell channel highlights. Even softening the humble demand can lead to raising unemployment when the supply also decreases, “Balance” is called Powell.

By assigning employment weakness “much more” to immigration changes more than customs tariffs, Powell actually acknowledged that the problem is a shock on the display side that cannot be fixed on its own. Unless the stability of immigration flows, the federal reserve may find that the demand for guidance with low rates is not fully suitable for employment, especially in sectors that depend on immigrant workers such as manufacturing or agriculture and in areas that already flash the deficiency.

Link markets

Economic risks are unusually divided. Powell repeated that the risk of inflation tends (a tariff that raises the prices of goods), while the dangers of employment tended, leaving “any risk -free path” to avoid stagnation. The average Federal Reserve Path now indicates 3.6 % by the end of the year with gradual declines after that, but Powell stressed that the decisions will depend on data.

For families, the damage is not equal. “Children who leave the college and younger people, minorities are having difficulty finding jobs. The rate of finding the total job is very low,” said minority.

“It is a very difficult situation for policy makers,” said Powell.

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