Is This The End Of Correlation Between Inflation and Unemployment?

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Mark Melin
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Updated on

Inflation and unemployment are often considered to have an inverse relationship. When employment rates are low, there is competition for workers and wages go up, assuming supply and demand markets are functioning. But with unemployment at 4.1% in November, its lowest rate since 2000 and beyond what the US Federal Reserve officially considers a sustainable long-run rate, inflation “has continued to disappoint,” a Goldman Sachs report noted. What will this mean for Fed rate hikes in 2018? The Goldman report comes as Bank of America Merrill Lynch also noted that the historic relationship between unemployment and interest rates, as measured…

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Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.