The fed cannot prevent wage growth. They can only ever put a lid on nominal GDP growth, which affects wages and profits roughly to the same extent (if anything,

The fed cannot prevent wage growth. They can only ever put a lid on nominal GDP growth, which affects wages and profits roughly to the same extent (if anything, profits are affected a lot quicker than wages, or even employment). Wages make up a lot of the cost that businesses have to pay, so wage growth outstripping GDP or productivity was traditionally seen as a red flag and an indicator that inflation might be around the corner. But this has become less important, since we now have more direct indicators of what the market itself is forecasting about future inflation - things have improved a lot since the 1970s!