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In late 2023 and early 2024, economists were under the impression that the U.S. economy was on track, with steady if unspectacular growth and cooling inflation that would allow the Fed to loosen its grip and even possibly lower interest rates. But over the past couple of months, expectations for such a “nirvana” have been revised.
Recent reports have pointed to the opposite: a so-called inflation boom, where economic growth remains strong but inflation accelerates again.
At the same time, the labor market remained stable, and the employment cost index, that is, an indicator of employee wage growth, was on the rise.
