Although the US labour market has already been very tight for a long time, the Fed has been hesitating to raise interest rates.

The Fed insists that its policy depends on the labour market, supposing that the strong job data leads to high inflation, but despite almost full employment in the US economy, there has been no rate hike since the first rate hike in December 2015. The reason is obvious: the Fed is not seeing the job data but seeing something else.

Continue reading Fed rate hikes: Janet Yellen is aware of secular stagnation →