Fed's Waller: Inflation can be brought down without causing too much harm to the job market
Fed Governor John Waller said on Friday that recent data are consistent with the view that the Fed may be able to hold down inflation without seriously damaging the labor market. Waller said that if people really start to believe that prices will continue to rise, defeating high inflation may require significant action by the Fed to defy those expectations. "There is some evidence to support the theory that if what drives up prices is a sudden increase in the frequency with which businesses adjust prices, then inflation can fall quickly with relatively little pain from rising unemployment," he said. "Recent data are consistent with this view." Waller said more data is needed to figure out which statement is correct.
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