ECI used to be an obscure indicator, but now it is the key to Fed policy

Q4 numbers showed momentum moderating, but level still too high for comfort.

Normally, Money Inside and Out is focused on thought pieces on big monetary policy issues. But today, we wanted to highlight some details from the Employment Cost Index released on Friday.

Why? Fed Chair Powell has indicated clearly that his more hawkish views in recent months were strongly influenced by the elevated ECI index reading for Q3 2021 (+1.…