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MNI BRIEF: NABE Survey Shows Growing Wage-Price Spiral Concern

(MNI) Washington
(MNI) Washington

U.S. business economists see potential of wage price spiral as growth risk to economy.

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The potential for a wage-price spiral is a major risk to U.S. growth in 2022, according to just over half of respondents in a National Association of Business Economics survey published Monday, showing that 19% of panelists believe a wage-price spiral is already underway.

Projections for Federal Reserve's target rate have also increased. The median forecast for the Fed's overnight rate at end-of-year 2022 rose from 1.125% in the Feb survey to 2.375% in the most recent survey. The median forecast for end-2023 also rose sharply—seeing the fed funds rate move from 1.875% in the previous survey to 3.00%.

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The potential for a wage-price spiral is a major risk to U.S. growth in 2022, according to just over half of respondents in a National Association of Business Economics survey published Monday, showing that 19% of panelists believe a wage-price spiral is already underway.

Projections for Federal Reserve's target rate have also increased. The median forecast for the Fed's overnight rate at end-of-year 2022 rose from 1.125% in the Feb survey to 2.375% in the most recent survey. The median forecast for end-2023 also rose sharply—seeing the fed funds rate move from 1.875% in the previous survey to 3.00%.

Keep reading...Show less