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The Fed: Fed’s Daly says globalization is a key reason why inflation is so low

Bloomberg News
San Francisco Fed President Mary Daly

With the unemployment rate so low, why is inflation so muted? Globalization, at least in part, is the answer, said San Francisco Fed President Mary Daly on Tuesday.

In a speech to The Commonwealth Club in San Francisco, Daly said that both workers and businesses are finding it hard to set prices in the new global marketplace.

For their part, workers have suffered from a loss of bargaining power, Daly said.

“Declining unionization — along with increased automation and globalization — have made it harder for workers to push for higher pay, even in very healthy job markets,” she said.

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