A matter of timing. Interesting pattern on the upside-inflation leads market interest rates which lead the Fed policy rate during 2021-2022. Perhaps we are seeing the reverse now with inflation dropping, then market rates and eventually a Fed easing of the funds rate in 2024.

Misstatement in my newsletter of this week--inflation leads wages not wages lead inflation. Illustrated below is the link between real final sales and the PCE deflator, where real final sales leads the deflator. Focusing on wages is not correct as a driver of inflation.