MacroVoices · Thursday, October 1, 2026
David Rosenberg explained that for inflation to become sustained, price shocks must feed into wages, creating a wage-price spiral. He notes that while a recent energy price shock exists, the labor market is not showing the acceleration needed for wages to catch up, thus preventing a sustained inflationary development.
“This is what's critical. Prices have to feed into wages. Because if the price shock doesn't feed him to wages, it hits the wall in the labor market. And all you end up with is negative real wages, that then trigger an environment of negative real consumer demand.”
“We're not seeing it right now. And it's very interesting for anybody that wants to see a Fed official that may be pushing against Kevin Warsh, who says wages don't matter. John Williams of the New York Fed just gave a speech on September 29th. Talking about we see no evidence that these price shocks are entering into wages.”
“In nominal terms, wages are decelerating.”