“The US Federal Reserve will have no problem claiming substantial further progress in labor market repair by the time taper starts,” St. Louis Fed President James Bullard said on Monday, as reported by Reuters.

Additional takeaways

“Playbook on taper from the great financial crisis may not be the same one used this time.”

“Fed will have to manage taper differently this time in case inflation risk intensifies.”

“Presumption is that Fed would not raise rates until taper is complete but could do it if needed.”

“Fed will have many months of labor market improvement before we do anything on policy.”

“Retirements have changed conditions in the labor market dramatically.”

“US economy is definitely booming, now beyond a point in GDP that would have been reached absent the pandemic.”

“Continued reopening measures in US in the fall, then globally after that, will give quite a few years of above-trend growth.”

“Pre-pandemic level of jobs is not the right benchmark for gauging progress, given retirements from labor market.”

Market reaction

These comments failed to help the greenback find demand. As of writing, the US Dollar Index was down 0.42% on the day at 91.93.

Leave a Reply

Your email address will not be published. Required fields are marked *