Former Minister Of Finance Chatib Basri This Is An Indication Of The Distribution In The United States, Here's The Explanation!

United States President Joe Biden. (Wikimedia Commons/The White House)

JAKARTA Economic conditions in the United States (US) are still haunted by quite high inflation. The last note in November 2022 shows that the superpower is experiencing 7.1 percent year on year (yoy) inflation.

This condition inevitably made the US central bank, The Federal Reserve, be hawkish aggressively raise interest rates to 3.75 percent to 4 percent. This situation of course made the process of economic recovery in the United States after the COVID-19 pandemic.

Minister of Finance (Menkeu) for the 2013-2014 period Chatib Basri revealed, there are indications of a recession by the US government. He got this during discussions with the former Minister of Finance of America some time ago.

According to Chatib, the scenario run by President Joe Biden Cs is intended to address the anomalies that occur in the labor market.

What's happening in America is that the number of job vacancies is greater than those that are unemployed because they (US communities) prefer to work from home (after the pandemic). In fact, the labor market asked them to return to work as usual," he said at the Outlook seminar on the Indonesian Economy 2023 on Wednesday, December 21.

Chatib menjelaskan, situasi ini yang kemudian menyebabkan tingkat pengangguran di AS jauh rendah tetapi jumlah vacangan pekerjaan masih cukup besar. As a result, tingkat pembaya yang ada di negara itu menjadi melonjak.

This situation also encourages inflation to rise quite quickly because people who work have strong purchasing power (demand to become high).

To overcome that, there is only one solution. America must be recession so that the unemployment rate increases (so that it can overcome labor gaps and reduce wage levels which means inflation also decreases). Recession is needed to contain inflation, so that's by design," he said.

In Chatib's notes, the unemployment rate in the US is now at 3.7 percent. In order to smooth out the scenario in question, the unemployment rate must be perched at the level of 6 percent or even 10 percent per year.

"How, The Fed (The Federal Reserve) must be more aggressive in raising interest rates," said Chatib Basri.