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Beyond Inflation: Why Wage Growth Is “Bad” For Central Banks
Now that the general theme of central banks has moved towards cutting, some have been able to do so sooner than others. Two of the majors, the Fed and the BOE, are seen as the most hesitant. Analysts suggest they might not get around to cutting until September. The main reason being cited for both is the labor market. For the Fed, it makes sense that the labor market would be mentioned, because keeping unemployment low is part of its mandate. But that is at odds with the unemployment rate already being below structural level. And the BOE doesn’t have a mandate to care about the employment rate. What gives? Going ... (full story)