Federal Reserve issues FOMC statement (May 3rd, 2023). Low Unemployment and High Federal Interest Rate

The Federal Reserve voted to increase the Federal Funds Rate from 5 to 5.25% Their goal is to get down to 2% eventually. You can read more about that within the 'Federal Reserve issues FOMC statement May 3rd, 2023'. The interest rate hike appears to be trying to slow the economy down more while not jeopardizing the banking system or industries (Its like this imperfect tool that is still dull. As our economic science develops that butter knife could become scalpel in economic policy). Is there something more to it? 

You will also find the following statements:

  -"Economic activity expanded at a modest pace in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated."

  -"The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks."

There maybe a connection between the high interest rate and the low unemployment rate. Consider, a study that indicates that when the interest fund rate decline unemployment rose. 'The Relationship Between Interest /Federal Funds Rate and Unemployment Rate in American Economy Outlooks.' The researchers state that there is statistically significant inverse relation between the Interest/Fed Rate and unemployment rate.

-"On our compute F-Test Statistics by rejecting H0 if "F" is more significant
than "Fα," the result came out TRUE that our F > Fα. This means the unemployment rate has a
statistically significant effect on the Fed funds rate at α=0.05."

I'm just trying to understand how this functions so try not to judge prematurely. If we have low unemployment and high interest rates it means the economy is running too fast. At the same point, lower interest rates should show unemployment rising. Whether that is a natural relationship or an artificial one I'm not sure at the moment. I would suppose its natural relationship not connected to the science that measures it (meaning its not just a abstraction in science.) 

Unemployment is often seen as available labor units so if we increase technology we would expand that capacity greatly. That becomes increasingly true if we are able to maintain employment through human expanding tech (versus human replacement tech.) If human capital is expanded, we might find increased labor capacity mimicking unused unemployment capacity and create downward pressure on Interest /Fed Rate (I can't imagine this would have an immediate impact but maybe 6 months down the road. Its just an imperfect idea.).

Technology improvements may just shift the productivity benchmark line through improved capacity and utilization rightward thereby maximizing the benefits of human capital based investments. The new technology and capacity is a type innovative platform shift in human capital capacity as enhanced through human advancing industrial-creative tech. Think of all the new tech and AI stuffing coming out and how that is going to expand human capacity quicker then anything we have seen before in history (These are not facts but just possibilities. 🤔)

Let us move down a possible line of logic. Investment in technology at the time when we are having a platform shift would likely be profitable and that in turn could expand human capacity if focused properly into industrial and creative capacities (The right kind of tech and not necessarily the way the tech industry is defined). New products increase labor capacity and in turn national productivity i.e. GDP growth (Its not robotics vs labor but we should thinking about technology as enhancing and expanding human labor. Thus, it keeps the human employment concerns central to design.)

The one thing many emerging market economies (increased GDP growth) have is cheaper labor costs (How modern China started growing through cheap labor). Improved technology reduces the per labor cost while still keeping the population employed and contributing to the economy. I wonder if this is what an American Renaissance could look like where market leading innovation, human capacity/capital and digital platform/infrastructure connect in a meaningful functional way? (I would have to go back through the logic and pull many different studies that theoretically connect it together. Just because they are associated wouldn't necessarily mean they are causative. See GDP Digital US, China 2030 Patent Digital Infra, Economic Value Human Capital, FDI and Human Cap, Post Covid, Start-Up DC)

Folowosele, Oluwatosin. (2020). The Relationship Between Interest /Federal Funds Rate and Unemployment Rate in American Economy Outlooks.