The Fed at the Crossroads
The Fed is not supposed to be swayed by elected officials or special interests. But bond holders — a powerful political constituency that includes financial firms, investment funds and wealthy individuals — generally want the Fed to raise rates sooner rather than later, and they have ample opportunity to dominate public discourse. Their aim is to pre-emptively attack inflation, which diminishes the value of their bonds.
But it is not the Fed’s job to protect investors’ bond portfolios.
.. Similarly, wages can rise at a rate well above inflation without pushing up prices. That’s because wage increases do not even begin to pose an inflation threat until they exceed the rate of inflation plus the rate of labor-productivity growth, roughly 3.5 percent currently.