Wage-price spiral fears to dictate Fed’s policymaking, says UI professor

One University of Iowa professor expects the Federal Reserve will raise interest rates and ensure inflation decreases to avoid the devastating impacts of a wage-price spiral.

A wage-price spiral is when inflation and high demand causes the price of goods to increase, prompting workers to demand higher wages to offset their loss in purchasing power. Considered a perpetual loop, company’s expenses go up and cost of goods yet again, resulting…