Minutes from the meeting of the Federal Reserve’s December meeting, released on Wednesday, make clear the US central bank will continue its interest rate tightening regime regardless of expectations it will be forced to pull back in the event that inflation comes down and unemployment rises.
Once again, the Federal Open Market Committee (FOMC), the key policy-making body, underscored that for all the talk in public about the need to bring down prices, the discussion behind closed doors was about suppressing a wages upsurge by the working class.
The staff review of the overall economic situation in the US declared in the very first paragraph that while labour market conditions had eased somewhat in October and November, they “remained quite tight.”
The second paragraph noted that the private sector jobs opening rate (the ratio of jobs available to the numbers seeking work) “moved back down in October but remained high.”
And the third paragraph stated: “Nominal wage growth continued to be elevated and remained above the level above the pace judged to be consistent with the FOMC’s 2 percent inflation objective.”
This was despite the fact that the review noted average hourly earnings rose by 5.1 percent in the 12 months ending in November, well below the rate of inflation, running at the highest rate in four decades. It underscored that the Fed’s key objective is to further cut the living…
