INFLATION IS A FUNCTION OF WAGES:

Inflation is coming down, partly because snags in supply chains have been sorted out, but also because demand is weakening. Higher interest rates have slowed home purchases, and hence housing construction. Higher-priced goods and services have eaten into household budgets and impeded consumer spending. And China's anemic growth has dampened commodity prices globally.

The Fed, however, is not satisfied with the current situation. It fears that until some slack emerges in America's red-hot labor market, wages could still catch up with inflation and then push it higher.

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