Fed Powell Recognizes Slower Corporate Profits Could Curb Inflation

Federal Reserve Chair Jerome Powell acknowledged on Tuesday that slimmer corporate profits could help curb inflation. He stated that it was possible for inflation to fall and workers’ wages to keep rising at the same time if companies and their shareholders took less for themselves. This is a departure from traditional economic theory which states that when wages rise, prices tend to follow suit due to increased demand in the market.

Powell argued, however, that with corporations taking home smaller profits, there would be more money available in the economy as a whole which could lead to higher wages without an accompanying increase in consumer prices. This is especially true considering the current low unemployment rates across many sectors of the U.S., meaning businesses are competing harder than ever before for employees who have greater bargaining power than they may have had during times of high unemployment levels when employers held all of the cards so-to-speak.

It remains unclear whether or not this strategy will work out as planned but Powell seemed confident enough about its potential success rate given his comments yesterday before Congress regarding corporate profits playing a role in curbing inflationary pressures while allowing workers’ salaries room for growth over time as well – something we can all get behind!.