“Inflation has been below our target for a long time,” San Francisco Fed President Daly noted and argued that inflation expectations mattered more now than they used to.
Key quotes (via Reuters)
- I do not believe Phillips Curve is dead.
- Fear of inflation should not overly drive policy concerns.
- We should be vigilant on upside, downside risks to inflation.
- Decline of employer-provided cost of living adjustments weakens link between wage, price growth.
- There are few signs that wage inflation is running away.
- Wage growth is slowly ratcheting up.
- Wage growth not moving in alarming manner.
- Wage growth is not having much effect on price inflation.
- While U.S. healthcare industry used to be a boost to inflation, now is a bit of a drag.
- It is important to not be complacent but also not to be overly worried about inflation.
- Phillips Curve remains a useful guide.
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