- Fed getting closer to its objectives
- Inflation expectations are stable and moving back up to the Fed’s objective
- Wage growth is lagging the inflation indicator
- Wages respond to higher rates of inflation
- Fed closer to rate increase than many think
- Waiting too long on rates could bring a bumpy ride
He’s pulling a bit of a Carney on us, though no response in the dollar
Charles Plosser speaking on Bloomberg TV. He’s a voter on the board this year.
The comment on the wage inflation relationship is apt as it can turn into a perpetual upwards spiral. Rising wages rise help increase inflation, so then wage rises are needed to to offset rising inflation. And so it goes on until inflation and wages are too high and then pop goes the weasel.
