May 4, 2011

IF YOU THINK THERE'S INFLATION TRY GETTING A RAISE:

New San Francisco Fed chief downplays inflation threat, sees price pressures easing (Tom Petruno, May 4, 2011, LA Times)


John Williams, who was named president of the San Francisco Fed bank March 1, told a Town Hall Los Angeles forum Wednesday that he expected current inflation pressures to recede and that the Fed had an “unwavering commitment to price stability.” [...]

[L]ike Bernanke, Williams blamed the jump in commodities on “the rapid rebound in the global economy in the past year and a half, led by robust growth in emerging market economies.”

But he said there were more signs lately that commodity price gains were running out of steam, which he said should help to deflate inflation pressures in the second half of the year. Repeating another Fed theme, Williams said that anemic growth in wages (stemming from still-high unemployment) was a major barrier to a 1970s-style inflation spiral developing this time around.


No wage inflation is the same thing as no inflation.


Posted by at May 4, 2011 8:22 PM
  

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