Joblessness in the US has fallen to its lowest level in more than a decade, yet wages and inflation have been slow to respond. It’s a puzzle for the Federal Reserve, and history may prove a relevant guide. The Fed grappled with a similar situation in the 1960s, Deutsche Bank economists point out in a new research note. The unemployment rate fell from 7 per cent in early 1961 to 4 per cent by the end of 1965, yet core inflation was stuck in low gear — much like today. Back in the ‘60s, a confluence of fiscal and monetary policy factors caused prices to ...
Fed's long, strange inflation trip feels like a 1960s flashback
The unemployment rate fell from 7% in early 1961 to 4% by end of 1965
Jeanna Smialek Last Updated at June 24, 2017 20:50 IST