Skip to main content

Fundamentals point to slower wage growth

Fed Chair Jerome Powell argued in his post-FOMC press conference this week that, despite the stickiness of inflation in recent months, additional interest rate hikes were still “unlikely”. We still expect inflation to ease again later this year; with shorter supplier delivery times consistent with a resumption of core goods deflation, and a combination of slower wage growth and faster productivity growth consistent with lower non-housing services inflation. In that scenario, we expect the first rate cut to come in September.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access