What has changed with the move from Yellen to Powell? From yesterday´s presser, less reliance on theory and models and more weight on the actual behavior of the economy. For example, Powell said that labor market getting tight when we do see more meaningful upward move in wages. According to the chart below, that´s “far off”. The blue line indicates wage growth when unemployment is “low” (below 5%). Implicitly, he dismisses Yellen´s preferred theory. To Powell, “The theory would be if you get below the sustainable rate of unemployment for a sustained period, you would see an acceleration of inflation….