As Mr. Rosengren put it, over the last two decades, "the U.S. has a tighter inflation range and a broader unemployment range than many other countries with a single inflation mandate".
If the labour market remains this tight, wage inflation could continue to edge up, pushing consumer prices up too.America's inflation rate has stayed low, in part, thanks to cheap imports because of the strong dollar.
"Given that labor markets remain tight, that inflation remains above the rate that I would find acceptable over the long run and that core inflation has been edging higher," Mr. Meyer said, "attention must also be given to calibrating the easing to avoid overshooting in the other direction in a way that ends up adding to price pressures as growth strengthens".
Others advise it to sit tight unless inflation seems likely to move higher.
Where growth is bumping up against capacity constraints and labour markets are tight, food inflation may spill over into wages and other prices.Spare roomOur second indicator tries to gauge spare capacity by comparing a country's average GDP growth rate since 2007 with its growth rate in the previous ten years.
The oil embargo, a fourfold increase in oil prices, an inverted yield curve, a tight Fed, inflation — that the market was doomed anyway.
The bank's policy committee will face a choice of whether to keep a tight rein on inflation or address rising unemployment and further signs of a looming recession.
Despite the tight labor market, inflation remains remarkably tame.
Despite central-bank Poo-Bahs fretting about oil prices (up more than 50% in recent months) and tight labor markets, inflation is hardly a threat.
The company reported a loss in the second quarter due to an increase in credit defaults at a time when the government is keeping credit tight to check inflation.
