Fed’s Quarles: Inflation to meet bar for tapering
Federal Reserve Vice Chair of Supervision Randal Quarles shared on Wednesday that the Fed will begin talking about adjusting the pace of asset purchases at upcoming meetings if the estimates for economic growth, inflation and employment prove to be true.
Quarles said that despite inflation being “significantly above” Fed’s target of 2%, it is transitory and will not interfere with the rapid economic growth and the maximum employment goal. In the labor market, there are still 8 million fewer jobs than pre-pandemic, especially in the travel and leisure sectors. However, average working hours increased and full-time jobs are more available now.
As for potential headwinds, the Fed official pointed out the uneven global recovery and the supply bottlenecks. Imports are much higher than exports due to slower outside recovery. Meanwhile, supply shortages reduce the production pace and employment growth.
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