Which two variables does the author suggest are relevant to Federal Reserve bank policymaker. Also, according to the article, what should happen to aggregate price levels when the Fed decides to cut interest rates? What will Happen to price level and output in the US in the short run? Suppose the Government takes no action to the help the economy. What happens to price levels and output in the long run. The Job Market vs. Inflation Federal Reserve rate increases haven't cooled the job market or inflation as much as investors thought they would. A recent jobs report showed that there are still millions of more vacancies than there were before the pandemic. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS America's job market is cooling, and so is inflation. Neither one is anywhere close to cold. The Labor Department on Friday reported that the economy added a seasonally adjusted 209,000 jobs in June from a month earlier, down from May's gain of 306,000 jobs and, breaking a streak, a bit shy of the 240,000 economists were looking for. The unemployment rate, meanwhile, slipped to 3.6% from May's 3.7%, putting it a smidge higher than the multidecade low of 3.4% it hit