The Joe Klein Self-Massacre Continues... (Why Oh Why Can't We Have a Better Press Corps?)
Steve Stirling Is Having too Much Fun

The Economic Outlook

Mark Thoma looks at the Federal Reserve Bank of San Francisco's "Economic Outlook":

Economist's View: FRBSF: The Economic Outlook:

Conventional wisdom holds that when the unemployment rate falls below the NAIRU, wage inflation increases, which eventually feeds through to price inflation. A key question for policymakers is whether this conventional wisdom remains relevant today.... [A] number of... factor... might [reduce] the relevance of this historical relationship... (1) mismeasurement of available workers, (2) mismeasurement of the NAIRU, and (3) changes in the sensitivity of wage inflation to the unemployment rate owing to the rising importance and stability of inflation expectations.

Although the measured unemployment rate is quite low, some would argue that it does not fully capture the population available for work. Relative to the late 1990s, the labor force participation rate (LFP) and the employment-to-population ratio remain low.... The NAIRU is difficult to measure and is affected by a number of demographic and institutional factors. There is a wide range of credible estimates....

The sensitivity of wage inflation to the unemployment rate depends in part on the inflation expectations of workers.... [I]nflation expectations remain well-contained, likely tempering the magnitude of cost-of-living based wage increases demanded by workers...

I tend to agree that the inflation outlook over the medium term is significantly better than the center of gravity of the FOMC appears to believe. But I'm not sure whether I'm just indulging in wishful thinking.