Fed's Powell Says Rising Wages Aren't a Sign of an Overheating Labor Market

The transcript discusses the relationship between inflation pressure and wage data, noting that recent wage increases align with inflation and productivity rates, indicating no overheating in the labor market. It highlights that higher wage growth does not necessarily lead to inflation, citing the late 1990s as an example where wages rose faster than inflation without causing significant inflationary pressure.

What historical example is given to illustrate that higher wage growth need not be inflationary?

What factors contributed to the late 1990s episode of low unemployment and rising wages without an increase in inflation?