“By moderating demand, we could see vacancies come down, and as a result—and they could come down fairly significantly and I think put supply and demand at least closer together than they are, and that that would give us a chance to have lower—to get inflation—to get wages down and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially. So there’s a path to that,”
Jerome Powell, chairman of the US Federal Reserve, May 4th, 2022
So minor correction on my part if we’re being very particular, and sometimes that’s important. ‘Get wages down’ could have different implications than ‘keep wages down’. Elsewhere, he mentions wage growth being a good thing, however it is (at the time of the press conference) growing much faster than their target inflation rate.
Jerome Powell, chairman of the US Federal Reserve, May 4th, 2022
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220504.pdf
So minor correction on my part if we’re being very particular, and sometimes that’s important. ‘Get wages down’ could have different implications than ‘keep wages down’. Elsewhere, he mentions wage growth being a good thing, however it is (at the time of the press conference) growing much faster than their target inflation rate.
Thanks. Yeah he definitely subscribes to the Wall Street belief that wages are driving inflation.