During a supply shock, the fed should allow inflation to increase because prices are rising for a real reason. But equilibrium wages should remain steady becaus

During a supply shock, the fed should allow inflation to increase because prices are rising for a real reason. But equilibrium wages should remain steady because workers aren't becoming more productive. Basically this is just a way of saying everyone needs to take a hit to consumption, something which is readily facilitated by inflation. If minimum wages rise but equilibrium low-skilled wages don't rise or even fall, it will lead to layoffs and turn the supply shock into a high-unemployment recession. If the Fed tries to react by reducing inflation, equilibrium wages will fall further making the situation worse, and giving rise to a lot of inefficiencies where some people are shielded from the supply shock and others face the full brunt.