|San Francisco|4 min read
If central bankers are to defeat inflation, they must cool the labour market. For the past couple of years growth in rich-world wages has added to corporate costs, sending prices relentlessly upwards. But as they began raising interest rates to slow the economy, monetary policymakers hoped for an even rosier outcome. They wanted to achieve a “soft landing”, which involves both bringing down inflation and doing so without mass job losses. It is a lot to ask of a tool as blunt as monetary policy.
This article appeared in the Finance & economics section of the print edition under the headline “Breaking the rules”
From the September 23rd 2023 edition
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