https://finance.yahoo.com/news/why-the-fed-wants-corporate-america-to-have-a-hiring-freeze-morning-brief-100055174.html * HOME * MAIL * NEWS * FINANCE * SPORTS * ENTERTAINMENT * LIFE * SEARCH * SHOPPING * YAHOO PLUS * MORE... * [yahoo_fina][yahoo_fina] Yahoo Finance [ ] Sign in Mail Sign in to view your mail * Finance Finance * Watchlists Watchlists * My Portfolio My Portfolio * Cryptocurrencies Cryptocurrencies * # Yahoo Finance Plus Yahoo Finance Plus + Dashboard Dashboard + Research Reports Research Reports + Investment Ideas Investment Ideas + Community Insights Community Insights + Webinars Webinars + Blog Blog * Screeners Screeners + Saved Screeners Saved Screeners + Equity Screener Equity Screener + Mutual Fund Screener Mutual Fund Screener + ETF Screener ETF Screener + Futures Screener Futures Screener + Index Screener Index Screener * Markets Markets + Calendars Calendars + Trending Tickers Trending Tickers + Stocks: Most Actives Stocks: Most Actives + Stocks: Gainers Stocks: Gainers + Stocks: Losers Stocks: Losers + Top ETFs Top ETFs + Futures Futures + World Indices World Indices + Currencies Currencies + Top Mutual Funds Top Mutual Funds + Options: Highest Open Interest Options: Highest Open Interest + Options: Highest Implied Volatility Options: Highest Implied Volatility + US Treasury Bonds Rates US Treasury Bonds Rates + Currency Converter Currency Converter * News News + Latest News Latest News + Politics Politics + Stock Market News Stock Market News + Crypto News Crypto News + Economic News Economic News + Morning Brief Morning Brief + Bidenomics Report Card Bidenomics Report Card + Adriana Belmonte Adriana Belmonte + Akiko Fujita Akiko Fujita + Alexandra Canal Alexandra Canal + Alexandra Garfinkle Alexandra Garfinkle + Alexandra Semenova Alexandra Semenova + Alexis Keenan Alexis Keenan + Andy Serwer Andy Serwer + Anjalee Khemlani Anjalee Khemlani + Ben Werschkul Ben Werschkul + Brad Smith Brad Smith + Brian Cheung Brian Cheung + Brian Sozzi Brian Sozzi + Brooke DiPalma Brooke DiPalma + Dani Romero Dani Romero + Daniel Howley Daniel Howley + Dave Briggs Dave Briggs + David Hollerith David Hollerith + Ella Vincent Ella Vincent + Emily McCormick Emily McCormick + Erin Fuchs Erin Fuchs + Ethan Wolff-Mann Ethan Wolff-Mann + Ines Ferre Ines Ferre + Jared Blikre Jared Blikre + Jennifer Schonberger Jennifer Schonberger + Julie Hyman Julie Hyman + Kerry Hannon Kerry Hannon + Luke Carberry Mogan Luke Carberry Mogan + Marquise Francis Marquise Francis + Michael Kelley Michael Kelley + Pras Subramanian Pras Subramanian + Rachelle Akuffo Rachelle Akuffo + Rick Newman Rick Newman + Ronda Lee Ronda Lee + Seana Smith Seana Smith + Sheila Bair Sheila Bair * Personal Finance Personal Finance + Home Home + My Money My Money + Retirement Retirement + Taxes Taxes + Rates Rates * Videos Videos + Yahoo Finance Live Yahoo Finance Live + Influencers with Andy Serwer Influencers with Andy Serwer + Yahoo Finance Presents Yahoo Finance Presents + Yahoo U Yahoo U + A Time for Change A Time for Change + Spotlight Spotlight + Yahoo Finance All Markets Summit Yahoo Finance All Markets Summit + Events Events + ETF Report ETF Report + Davos Davos + Crypto Corner Crypto Corner + FA Corner FA Corner + Women and Money Women and Money + America: Back in Business America: Back in Business * Yahoo U Yahoo U * Industries Industries + Saved Screeners Saved Screeners + Equity Screener Equity Screener + Mutual Fund Screener Mutual Fund Screener + ETF Screener ETF Screener + Futures Screener Futures Screener + Index Screener Index Screener * Tech Tech + Reviews Reviews + How To How To + Games Games + Video Video * Contact Us Contact Us ... ... * __ Advertisement __ U.S. markets closed * S&P 500 4,158.24 +100.40 (+2.47%) * Dow 30 33,212.96 +575.76 (+1.76%) * Nasdaq 12,131.13 +390.43 (+3.33%) * Russell 2000 1,887.90 +49.66 (+2.70%) * Crude Oil 115.33 +0.26 (+0.23%) * Gold 1,855.00 -2.30 (-0.12%) * Silver 22.08 -0.01 (-0.05%) * EUR/USD 1.0732 -0.0007 (-0.06%) * 10-Yr Bond 2.7430 -0.0130 (-0.47%) * GBP/USD 1.2631 0.0000 (-0.00%) * USD/JPY 127.1820 +0.0970 (+0.08%) * BTC-USD 29,416.42 +437.70 (+1.51%) * CMC Crypto 200 625.79 -3.71 (-0.59%) * FTSE 100 7,585.46 +20.54 (+0.27%) * Nikkei 225 26,781.68 +176.88 (+0.66%) Read full article Yahoo FinanceYahoo Finance Why the Fed wants corporate America to have a hiring freeze: Morning Brief Ethan Wolff-Mann Ethan Wolff-Mann *Senior Writer/Chief-of-staff May 12, 2022, 3:00 AM*5 min read This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe Today's newsletter is by Ethan Wolff-Mann, a senior writer. Follow him on Twitter @ewolffmann. The chorus of those wanting a weaker labor market is getting louder and louder. After the recent job numbers were released last week, Bank of America analysts said in a note they are essentially "rooting against the home team" and hope the numbers stop being so strong. As higher wages contribute to inflation, the Federal Reserve appears to agree. "Chair Powell keeps mentioning the relationship between the high level of job openings and wage/price inflation," Nicholas Colas, co-founder of DataTrek, wrote in a newsletter on Tuesday. "He's not talking to investors. He's talking to corporate America, and his goal is to have companies essentially institute a hiring freeze and end the cycle of paying up for new hires." Wednesday's economic release of consumer prices (CPI) showed inflation rose more slowly in April (8.3%) compared to March (8.5%). While the report was expected to have shown a March peak, there wasn't much good news. "[Substantial] declines in the annual rate of inflation are unlikely to materialize until there are significant improvements in geopolitical tensions (that would get energy prices lower), supply chain strains and labour market shortages," wrote ING's James Knightley in a note after the release. "Unfortunately, there is little sign of any of this happening anytime soon." TD Securities analysts agreed, noting the "report should be of concern for the Fed given price gains in the core segment appear to be spreading." According to the consensus view of economists and analysts, shocks to commodities, supply chain issues, and the red hot (and very tight) labor market are all keeping inflation high and unpleasant. But it's the labor market that appears hardest to vanquish. Story continues While supply-chain problems and big price shocks have been easing, "we see no such let-up when it comes to labor cost pressure," Bank of America's global economist Ethan S. Harris pointed out. Employers can't find people to fill open positions, tons of people are changing jobs, and "looking ahead there is no sign of stabilization." In Colas's view, the only way to get stabilize inflation is to use the monetary policy hammer to hit stock prices. "The Fed's goal is to convince corporate America to enact a short-term hiring freeze, and it will keep raising rates and talking about aggressive monetary policy until that happens," Colas wrote. "Lower stock prices are his way of convincing C-suites and boards to do that." The Fed's 'blunt force tool of rate policy' Powell has been focused on the ratio between job openings versus unemployed workers and the core personal consumption expenditures price index, which measures inflation. "Chair Powell mentioned the ratio several times at last Wednesday's press conference," said Colas, who said job postings need to drop from 11.5 million to around 8 million to get to normalcy. The only way to get there would be some sort of freeze from companies. U.S. Federal Reserve Chairman Jerome Powell testifies during the Senate Banking Committee hearing titled U.S. Federal Reserve Chairman Jerome Powell testifies during the Senate Banking Committee hearing titled "The Semiannual Monetary Policy Report to the Congress", in Washington, U.S., March 3, 2022. Tom Williams/Pool via REUTERS "[Freezes] typically [happen] when C-suites and boards decide that business conditions have become very uncertain. The Fed doesn't have a seat at those discussions, but it does have the blunt force tool of rate policy and its effect on stock prices," Colas said. "Chair Powell has made it clear that he wants to see openings decline." The big question is by how much -- and whether it will be enough to whip out the "R" word? Harris wrote if the strength stays at the 200,000 openings per month pace we've seen, "the Fed will need to push job growth down to ~25k per month." But, Harris added, "If the labor force has slowed to a more trend-like 100k then they will need to push job growth to negative 70k. That is, they would need to trigger a mild recession." What to watch today Economy * 8:30 a.m. ET: Producer Price Index, month-over-month, April (0.5% expected, 1.4% in March) * 8:30 a.m. ET: Producer Price Index excluding food and energy, month-over-month, April (0.6% expected, 1.0% in March) * 8:30 a.m. ET: Producer Price Index excluding food, energy, trade, month-over-month, April (0.6% expected, 1.0% in March) * 8:30 a.m. ET: Producer Price Index, year-over-year, April (10.7% expected, 11.2% in March) * 8:30 a.m. ET: Producer Price Index excluding food and energy, year-over-year, April (8.9% expected, 9.2% in March) * 8:30 a.m. ET: Producer Price Index excluding food, energy, trade, year-over-year, April (6.5% expected, 7.0% in March) * 8:30 a.m. ET: Initial jobless claims, week ended May 7 (192,000 expected, 200,000 during prior week) * 8:30 a.m. ET: Continuing claims, week ended April 30 (1.368 million expected, 1.384 million during prior week) Earnings Pre-market * WeWork (WE) is expected to report an adjusted loss of $0.72 per share on revenue of $768 million * Six Flags Entertainment (SIX) is expected to report an adjusted loss of $1.04 per share on revenue of $122.54 million Post-market * Affirm (AFRM) is expected to report an adjusted loss of $0.48 per share on revenue of $344.33 million * Figs Inc. 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