Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
Why Central Banks Are Watching the Wage-Price Spiral Again
In this episode, Lucas and Luna dig into the renewed central bank focus on the wage-price spiral in mid-2026. With labour markets still tight and services inflation sticky, policymakers worry that persistent wage growth could feed a self-reinforcing loop. Lucas explains the historical context—the 1970s experience and how it differs today—and walks through the specific data points the Fed, ECB, and Bank of Japan are watching: the Atlanta Wage Tracker, unit labour costs, and productivity figures. Luna raises the counterargument that profit margins and supply chains matter more, and Lucas breaks…
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