, Columnist
Fed Has Put Markets in Survival Mode
Interest rates this low are far less important for growth than they are for corporate profits, asset prices and carry trades.
Watching the Phillips Curve.
Chris Ratcliffe/BloombergThis article is for subscribers only.
There's a big debate in markets about the appropriate Federal Reserve policy amid conflicting signals. With the jobless rate at 4.4 percent, the trade-off between growth and inflation known as the Phillips curve would seem to matter.
Yet the wage pressure that logically should have come by now is elusive, probably because of technology-driven disinflation. Just look at the Fed's preferred gauge of prices, the core personal consumption expenditure index, which is trending lower. The latest reading of 1.4 percent, for May, fell further below the bank's 2 percent target.