The Fed has been fueling stock market inflation for a long time. Steven Liesman comments on the Fed finally taking action against consumer inflation.
Liesman asks, can inflation be self-correcting? By putting downward pressure on demand, could inflation ease on its own, without intervention from the Fed? If that were the case it would have happened by now.
Back on July 18 I said, “I don’t see inflation becoming a chronic problem unless income inequality is addressed. Perhaps we’re getting a taste of that, with more people demanding a higher minimum wage.” I’m thinking we are indeed getting a taste of that, resulting from the rise in wages.
It’s an uncomfortable possibility that income inequality is a factor in helping to keep inflation under control. The implication is there has been a benefit to the decline in good paying union jobs. Some smart economist should write a book about this, if there isn’t one already.