The Federal Reserve Bank (Fed) is relentlessly striving to bring inflation down to 2% from the last record 5%. This has a human cost, because such a policy could put nearly 1 million more Americans out of work, according to the bank’s own estimates. Given the vagaries of inflation behavior, it is unclear whether the Fed has the right to be so monolithic in its approach. Its chairman, Jerome Powell, remains steadfast in his mission, even as higher borrowing costs squeeze household finances. Their spending fell in December to the highest level since February 2021, the US Bureau of Economic Analysis said on Friday.

According to the bank officials’ own forecasts, the fight against inflation will hit hundreds of thousands of workers. Forecasts released after its meeting in December reflect the view that by the time inflation returns to 2% in 2025, unemployment will rise to 4% from 3.5% in December. This corresponds to 800,000 people who have lost their jobs. However, the number is increasing if people who left production and stopped looking for work during the pandemic are returning to the fray.

Let’s assume that the participation rate – or the proportion of Americans who are working or actively trying – returns to levels they were at the end of 2019, and that 4% unemployment means a total increase of 978,000 unemployed. Inflation also brings painful results, especially for less wealthy households, but the trade-off is not easy. If the Federal Reserve stops its course now, inflation could continue to fall and companies won’t have to cut jobs. In any case, the figure of 2% is more symbolic than scientific. Inflation often exceeded 2% in the 1990s, and Americans tend to overestimate the rate of inflation in the coming year, typically expecting around 3%, according to the Federal Reserve Bank of New York.

Jerome Powell has so far ruled out easing the 2% inflation target. Markets like central bankers who stick to their own rules because they are seen as serious. Of course, the workers who will suffer losses are probably obsessed with other ideas.