- St. Louis Fed president Bullard: Fed should press ahead with plan to dial down its stimulus despite abrupt slowdown in U.S. jobs growth in August - FT
Market news
8 September 2021
St. Louis Fed president Bullard: Fed should press ahead with plan to dial down its stimulus despite abrupt slowdown in U.S. jobs growth in August - FT
- There is plenty of demand for workers and there are more job openings than there are unemployed workers
- If we can get the workers matched up and bring the pandemic under better control, it certainly looks like we’ll have very strong labour market going into 2022
- Big picture is that taper will get going this year and will end sometime by H1 2022
- Looking for job gains to average out around 500,000 per month this year; these numbers are going to bounce up and down
- When you’re in crisis, you have to be prepared for twists and turns
- Jobs are there, it’s that workers may not want to take those jobs right now
- Expects the unemployment rate to drop below 5 percent by the end of this year
- Many have said that once you get into 2022 inflation will moderate. There a case to be made for that, but there’s a case to be made that it won’t moderate and may go in other direction
- To give Fed “optionality” to raise interest rates in 2022, it should wrap up its asset purchases by the end of Q1 2022
- Another reason to taper quickly is “incipient housing bubble” that might be fuelled in part by Fed’s ultra-loose monetary policy
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