These two are inversely related, which means that when unemployment goes down, inflation tends to go up, and when unemployment goes up, inflation tends to go down. This relationship is known as the Phillips Curve, and it has been a topic of much discussion among economists and policymakers.
This was completely disproven during the 1970s. The Phillip's curve was shown to be a fallacy, something that has no place in reality.
In fact, we often see low unemployment during receessionary periods. Using unemployment as a sign of economic strength is a mistake that keeps getting repeated.
And Powell keeps the train moving in that regard.
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Well, Philip's curve faces the contradiction and its predictions don't work during stagflation, You probably already know stagflation is a stage where both unemployment and inflation rise simultaneously. The phenomenon of stagflation seemed to contradict the basic premise of the Phillips curve.
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