Federal Reserve VP tells Fargo Moorhead business leaders economy in "wage price spiral"

(Fargo, ND) -- An Official with the Federal Reserve Bank of Minneapolis gave an audience in Fargo his summary of what's happening with the economy.

"What's happening is people, because it's a tight labor market, are seeing their wages go up. Firms are increasing their prices to reflect that. Workers, seeing that prices go up are asking for higher wages, firms are raising their prices, workers are asking for more money. That's called a wage price spiral. That's what people are worried about," said Ron Feldman, the bank's First Vice President and Chief Operating Officer.   

Feldman spoke to hundreds of local business leaders at the Midwest Economic Summit hosted by the Fargo Moorhead West Fargo Chamber of Commerce. Feldman says inflation is currently too high, and says the Federal Reserve will "do what it can" to get the rate "where it's supposed to be". Feldman says the Fed's target rate for inflation is 2 percent. The U.S. Labor Department reports the current inflation rate at 6.5 percent.