Fed officials are uncomfortable with the combination of easier financial conditions and a red-hot US labor market.

Raphael Bostic on Monday suggested the January jobs report might warrant higher peak rates, and on Tuesday, born-again hawk Neel Kashkari reiterated the message.

Kashkari, who favors another three hikes at least, said the incoming data suggests the Fed’s efforts haven’t “had much of an imprint” on the labor market. “There’s some evidence it’s having some effect, but it’s pretty muted so far,” he told CNBC.

Officials and markets are confronting an uncomfortable paradox: The bulletproof jobs market is helpful to the extent it allows the Fed to turn the screws without worrying too much about an abrupt drop in hiring, but in the current environment, the disconnect between labor supply and demand suggests there may be a floor under wage growth.

That, in turn, suggests a lower limit on inflation, or at least on the services side, excluding housing. Wage growth at, say, 4.5%, isn’t likely to coexist peacefully with 2% consumer price growth.

From the highs, wage growth has retraced around two-thirds of the way to the 3% pace generally seen as consistent with 2% CPI. That was probably the easy part. The question is how hard the rest of that journey will be.

Opinions vary, but the important point is that we’re effectively asking the same question with regard to wage growth as we are with inflation more generally. A meaningful decline from the peaks was a given. Now it’s a matter of whether the macro regime has shifted such that inflation and wages won’t (or can’t) reset to “normal” levels.

A lot hinges on the still unsettled debate about whether monetary policy alone is up to the task. Some of the structural disinflationary enablers we took for granted (e.g., globalization, frictionless supply chains, etc.) were upended in the 2020s. If that’s permanent, we may be about to discover that monetary policy is more impotent than we thought when it comes to controlling runaway price growth.

Kashkari isn’t buying that, though. “We know that raising rates can put a lid on inflation,” he told CNBC Tuesday.

Remember: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”