Can happen doesn’t mean likely to happen. Certainly disinflation in 2022-2023 raised unemployment, and it’s by far the most likely outcome of raising rates high enough to curb inflation.

Sure, if labor demand exceeds supply, unemployment will stay close to its natural bottom even in an environment of demand cooling. It's the same mechanism -- the supply/demand curve shifting. First it exhibits as wage increases slowing; then it exhibits as unemployment.

We've seen a lot of the first in 2026 -- wage increases have dropped significantly below the rate of inflation.

What do you think "demand cooled" means if not increased unemployment. Its a neat way of transferring the pain to the politically weak, whilst calling it "demand cooling", or whatever the euphemism du jour is for making people unemployed. It's all about targeting the mythical NAIRU rate.