What if inflation is really about bargaining power?
The Fed's secret radicals strike again.
A long running theme of this newsletter is that there are two - not necessarily mutually exclusive stories that one can tell to explain the lower inflation of the mid-1990s to late 2010s, compared to the higher inflation of the 1960s and 1970s.
The first story runs something like this and is rooted in structural changes in the shape of the macroeconomy, …