The KC Fed LMCI Momentum Indicator Suggests Monetary Policy Is Beginning to Weigh on Labor Markets

Jose Mustre-del-Rio and Emily Pollard

Economic Bulletin, 2023, issue February 3rd, 2023, 4

Abstract: The Federal Open Market Committee has been quickly raising the federal funds rate to lower inflation. However, services inflation remains high, supported by a tight labor market with high wage growth. Recent readings in the LMCI momentum indicator suggest monetary policy tightening is beginning to weigh on labor markets, which may eventually lead to lower services inflation and lower inflation overall.

Keywords: Labor Market Conditions Indicators (FRB Kansas City LMCI); monetary policy; labor markets; inflation (finance) (search for similar items in EconPapers)
JEL-codes: E52 J4 P24 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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