Noah Smith, Columnist

Don’t Raise Rates Just to Keep Wages in Check

With no signs of faster inflation, the Fed shouldn’t get antsy.

May 17, 2018 at 2:00 PM UTC

Noah Smith is a former Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

I’m not rushing into this, understand?
Photographer: Alex Wong/Getty Images North America

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Macroeconomics is getting interesting again. For the past five years, monetary policy was simple and boring — the economy was recovering steadily, but not yet at full employment, and inflation remained muted, so the Federal Reserve simply had to keep interest rates low and not interfere with a good thing.

But now this happy era of tranquility may be ending. The number of prime-age Americans with jobs — probably the most accurate measure of the labor market — is approaching its pre-recession peak: