Fed Will Raise Rates to 5.5% and Hold, Kroszner Says

The video discusses the risks associated with inflation, particularly if it exceeds expectations, and the Fed's concerns about the labor market's impact on inflation sustainability. It explores the concept of 'Immaculate disinflation,' where inflation and wage growth decrease without significantly weakening the job market, a scenario not previously observed. The Fed's strategy involves maintaining interest rates to ensure inflation aligns with their 2% target, emphasizing the importance of both inflation reports and labor market conditions.

Discuss the relationship between wage growth and inflation as mentioned in the text.

What is the Federal Reserve's target inflation rate, and what actions might they take if inflation does not meet this target?