Replies to post #101158 on Savvy Trades and Investments

[researcher59]

Inflation can be very stubborn -

Brookings -

The wage-price spiral means that when inflation expectations rise, it is difficult to bring down inflation, even if unemployment is high. This cycle plays out as follows: high inflation drives up inflation expectations, causing workers to demand wage increases to make up for the expected loss of purchasing power. When workers win wage increases, businesses raise their prices to accommodate the increase in wage costs, driving up inflation.

https://www.brookings.edu/blog/up-front/2020/11/30/what-are-inflation-expectations-why-do-they-matter/#:~:text=This%20cycle%20plays%20out%20as,wage%20costs%2C%20driving%20up%20inflation.