I don't think many people appreciate how fast the economy — both labor markets and inflation — may be turning 1/
https://twitter.com/DianeSwonk/status/1577629881134813185
Effective monetary tightening began around the beginning of this year, as long-term rates started rising in anticipation of Fed hikes. But even long rates affect the real economy with a lag 2/
Say the lag is 6 months, which I think is conservative. Here's the 10-year rate lagged 6 months. We're just at the beginning of a large Fed-induced cooling/contraction 3/ 
Lots of people pointing out that August's sharp decline in the job openings/unemployment ratio still leaves us well above pre pandemic level. But how many months like August would it take to eliminate the gap? Two. 4/
Yes, the Fed was behind the curve on rising inflation. But I worry that we may be enacting the old joke about the driver who runs over a pedestrian, then tries to fix it by backing up — and runs over the guy a second time 5/
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