You are here: Home » International » News » Others
Business Standard

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 

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 take off around the ...

This article is no longer available in our repository.

There could be multiple reasons for this.

First Published: Sat, June 24 2017. 20:48 IST