this post was submitted on 19 Oct 2023
74 points (97.4% liked)

Canada

9626 readers
1129 users here now

What's going on Canada?

Related Communities

🍁 Meta

🗺️ Provinces / Territories

🏙️ Cities / Local Communities

Sorted alphabetically by city name.

🏒 SportsHockey

Football (NFL): incomplete

Football (CFL): incomplete

Baseball

Basketball

Soccer

💻 Schools / Universities

Sorted by province, then by total full-time enrolment.

💵 Finance, Shopping, Sales

🗣️ Politics

🍁 Social / Culture

Rules

  1. Keep the original title when submitting an article. You can put your own commentary in the body of the post or in the comment section.

Reminder that the rules for lemmy.ca also apply here. See the sidebar on the homepage: lemmy.ca

founded 4 years ago
MODERATORS
otter
mp3
otters_raft
74
Inflation is cooling. The cost of living crisis is not (www.cbc.ca)
submitted 2 years ago by grte to c/canada
17 comments fedilink hide all child comments
you are viewing a single comment's thread
view the rest of the comments
[–] [email protected] 0 points 2 years ago (1 children)

In the US, the fed’s stated strategy is to keep wages down.

It's not their stated strategy but it's probably safe to assume they subscribe to the baseless "wage price spiral." The bottom line is that there is still a LOT of stimulus money circulating, keeping inflation high. Ideally this would be targeted with a tax on the wealthy, but in the absence of that, the Fed has to use their very blunt tools. I don't see inflation improving until there's a recession.

[–] [email protected] 1 points 2 years ago* (last edited 2 years ago) (1 children)

“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

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.

[–] [email protected] 0 points 2 years ago

Thanks. Yeah he definitely subscribes to the Wall Street belief that wages are driving inflation.