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Illustration: Rebecca Zisser/Axios
The Fed is mandated to worry about inflation. But the risk of runaway prices seems so remote that, at least for now, some Fed officials and leading economists are embracing what for decades has been rejected as heretical — allowing wages to keep rising without stomping on them with higher interest rates.
Driving the news: U.S. workers have had a six-month run of real pay gains. Ordinarily, that would be a signal for the Fed, alert always to "wage inflation," to contemplate hiking interest rates and incentivize companies to slow the increases.
But this time, several Fed officials suggest they are open to extended real wage hikes, a sentiment that — should it become bank policy — could have both economic and political impact if living standards rise in places that since the 1980s have seen mostly decay.
Officially speaking, the Fed has no mandate to move wages. But it ends up influencing pay through its interest rate policy.
What's next: I asked a group of leading economists whether the Fed should embrace not just more months of wage gains, but higher increases, in line with those of prior decades. The answer I got back was mostly “yes” — that would be a “fine idea,” as Lawrence Summers, the former Treasury secretary, put it. But there was much hand-wringing on what the Fed could actually do.
But Karen Dynan, chief economist for the Treasury Department in the Obama administration, said the Fed has the power of its word — economic and financial actors often hang on the utterances of Fed officials, especially chairman Jerome Powell.
An Amazon fulfillment center in Baltimore. Photo: Erica Pandey/Axios
In yet another win for bigness and big companies, Amazon may be leaving the small suppliers who rely on its platform in the dust.
Erica writes: Amazon is culling its supplier list, getting rid of small players in favor of big brands and conglomerates like Procter & Gamble, Sony and Lego, which offer wholesale prices, reports Bloomberg.
Why it matters: With the rise of supercenters like Walmart in the 20th century, smaller manufacturers and businesses were effectively banished from main streets. Now, Amazon, which has already been grabbing market share, may purge them from the web, too.
Small companies still have the option of selling directly on Amazon's website, but hunting for individual customers amid an ocean of products and users is much messier than selling in bulk to the behemoth, Bloomberg notes.
In a statement to Axios, Amazon strongly disputed the Bloomberg report: "We informed Bloomberg prior to publication of their article that their sources and story are wrong. We review our selling partner relationships on an individual basis as part of our normal course of business and any speculation of a large scale reduction of vendors is incorrect. Like any business, we make changes when we see an opportunity to provide customers with improved selection, value and convenience, and we do this thoughtfully and considerately on a case-by-case basis.”
Rat protest, New York, 1948. Photo: Charles Hoff/NY Daily News/Getty
The sighting of rats in major U.S. cities is up. In New York City, the public reported 17,353 rats last year, up 38% from 12,617 in 2014, reports the NYT's Winnie Hu.
But that's mild compared with Chicago, which is the rat capital of the U.S., according to calls to Chicago's 311, per RentHop. It had 50,963 sightings in 2017, up 55% from 32,855 in 2014.
Washington, D.C., has seen nearly triple the number of rats since 2014, but that only meant about 6,000, up from around 2,400, per the NYT.
Illustration: Rebecca Zisser/Axios
Last year's competition, D.C. Photo: Katherine Frey/Washington Post/Getty
For almost a century, one of the most grueling endeavors any kid could attempt was participation in the National Spelling Bee competition. Honestly, how many of you, before reading this, could spell "koinonia," last year's winning word, less what it means (Christian fellowship)? This year's Bee began yesterday in Maryland and ends Thursday.