RBC believe that "the fact that we are still a...>

US: RBC believe that "the fact that we are still a ways away from the prior

cycle peak on relative cyclical employment should theoretically be holding wage

growth back. But the takeaway here is that even this metric suggests we are

heading north of 3% wage growth later this year. Sure, we are not yet witnessing

the type of wage pressures that led in past cycles to wage growth peaking at

north of 4%. But 1) that's not necessarily something we want as it inevitably

leads to margin compression, and 2) we don't need 4% wage growth to usher in a

much faster than currently priced in tightening phase by the Fed. Current

projections are enough to warrant a slightly north of neutral policy

prescription over the next 18 months."