Comments from the St Louis Fed President
- I think by end of tapering next spring, unemployment will be 3.5% or better
- Labor markets are very tight
- My outlook for the US economy is still pretty bullish
- Not a strong case that inflation will definitely dissipate over the next six months
- I would put a 50% chance on high levels of inflation persisting
- Many US workers have retired
One of the big puzzles in the US labor market is the persistent gap in labor force participation, including among prime age workers. The low-inflation argument is that those are really unemployed people who will be pulled back in. The high-inflation bet is that they won't come back.
