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RIP Phillips Curve? The Fed's Wonky Guidestar May Be Dimming

  • Fed has been moving from tight labor-brings-inflation logic
  • They’re now waiting for actual, not anticipated, price gains
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Powell Says Fed Rate Move Hinges Mostly on Inflation

The Federal Reserve may be losing its economic religion, or at least becoming more agnostic.

Central bankers believe -- often devotedly -- in a concept called the Phillips Curve. The idea is that very tight labor markets will force employers to raise wages, and they’ll charge consumers more to protect their profit margins. The end result? Low unemployment heralds higher inflation.