The Federal Reserve needs to make sure that tight labor markets do not spark a sustained surge in inflation, but equally that inflation expectations do not get stuck too low, New York Federal Reserve Bank President John Williams said on Friday. The concern about excessively low inflation is remarkable in the context of a U.S. unemployment rate of 4 percent, well below what most economists believe is sustainable in the long run. Traditionally, economists have found that when labor markets run hot, eventually inflation will as well. That relationship may have changed, according to a spate of new research from within ... (full story)