One of the biggest unknowns since the Federal Reserve started its historic rate-hiking campaign has been how many jobs could be lost from the central bank’s deliberate effort to slow down the US economy.

So far, the labor market has stayed white hot, with unemployment hovering at a half-century low. But Fed Chair Jerome Powell’s acknowledgment on Wednesday that the banking sector meltdown could lead to “tighter credit conditions for households and businesses, which would in turn affect economic outcomes” has critics reminding him of the human impact of that “Fedspeak:” Millions of people out of work.

The Fed’s latest economic projections, released on Wednesday, were largely in line with those from its last forecast, in December. In fact, the unemployment picture even grew a tinge less gloomy, with an estimated 2023 jobless rate of 4.5% instead of 4.6%.

Assuming no change in the labor force, going from the current unemployment rate of 3.6% to 4.5% would mean 1.5 million more people would be unemployed by the end of the year, according to the Fed’s projections.

While the Fed’s own estimates hint at some sort of stability, even the head of the central bank is quick to note that’s far from the case.

“It’s a highly uncertain estimate,” Fed Chair Jerome Powell said Wednesday.

And, economists say, that uncertainty is heightened, given the banking turmoil of the past two weeks.

A ‘trilemma’ with a delicate balance to strike

The Fed now is facing a “trilemma” of re-establishing price stability, minimizing unemployment and restoring financial stability, said Joe Brusuelas, RSM US chief economist. And the probability is low that the Fed will be able to bring down inflation without causing a recession, preventing further consolidation in the banking sector or increasing unemployment, he said.

“We are in a situation with inflation elevated and now a banking crisis on top of that,” Brusuelas told CNN. “The Fed’s attempt to strike a delicate balance between price stability, employment and financial stability will require something to give. And that something is going to be right around 1.5 million jobs, if the Fed’s forecast is prescient for the [4.5%] unemployment rate.”

Brusuelas currently projects a 5.1% unemployment rate, which would be consistent with 2.5 million jobs lost, 3% inflation and a potential recession.

“I think that the Fed’s going to move toward an above 5% unemployment rate forecast, either in June or by September,” he said. “We were 3.4% two months ago. That’s non-trivial.”