Fed Vice Chair Richard Clarida said on Tuesday that the labour market right now is a lot tighter than it was following the previous two recessions and that wages gains are healthy but not out of line with productivity, according to Reuters. Adverse supply shocks can be a challenge for monetary policy, he added, because they push up both inflation and unemployment. 

Clarida will be replaced by Fed Governing Board member Lael Brainard as Vice Chairman of the Fed in Q1 2022. 

Market Reaction

Clarida's remarks have not provoked any meaningful market reaction, given they don't add anything new to the policy debate.