Fed’s Long, Strange Inflation Trip Feels Like a 1960s Flashback
- Then and now, economy had tight job market, no price pressure
- Deutsche Bank analysts trace similarities in research note
Fed Chair Janet Yellen's Press Conference in Two Minutes
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Joblessness in the U.S. has fallen to its lowest level in more than a decade, yet wages and inflation have been slow to respond. It’s a puzzle for the Federal Reserve, and history may prove a relevant guide.
The Fed grappled with a similar situation in the 1960s, Deutsche Bank economists point out in a new research note. The unemployment rate fell from 7 percent in early 1961 to 4 percent by the end of 1965, yet core inflation was stuck in low gear -- much like today.