I understand why increasing interest rates can negatively affect the economy, but why would the Feds raise the rate because of the positive jobs report?
I always assumed that more people employed means more discretionary spending leading to more corporate profits.
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I dom’t think that the jobs report is a significant factor in central bank decisions, because employment is a lagging indicator. Trying to fine tune an economy based on slow-to-come data like employment means that banks can be grossly wrong in their corrections to cool or heat up the economy.
Inflation is a leading indicator. Central banks usually give much more weight to inflation for that reason. That’s why many central banks have an inflation target rather than an unemployment target,
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