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C --- Wage price spiral decimates the economy
Shukla 6-26-23 (Shivam Shukla, 6-26-2023, Shivam Sukla is a News Editor at Moneycontrol "US stocks face downside risk amid frothy markets, may see a boil-the-frog recession: JP Morgan," Moneycontrol, https://www.moneycontrol.com/news/business/markets/us-stocks-face-downside-risk-amid-frothy-markets-may-see-a-boil-the-frog-recession-jp-morgan-10859551.html // AP)
The big worry for all central banks is a wage-price spiral, where both wages and prices move up in lockstep, forcing rates to move ever higher. That eventually compresses corporate pricing power and hurts profit margins, while banks pull back on lending, tightening credit conditions, Kasman adds. “And that eventually is what kills the economy.”
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