US Bond Market Week in Review: Will Inflation Be Weak For Longer Than Anticipated, Edition

Congress gave the Fed a dual mandate: maximum employment and price stability. Currently, there is a fair amount of uniformity among Fed governors regarding the former’s situation. While the unemployment rate is low, other measures of labor utilization show a higher than desired amount of slack. Weak wage growth confirms this underutilization. But ultimately, all argue that, should the “moderate” expansion continue, slack will disappear leading to increasing wage pressure.