Comments from the St Louis Fed President

the St Louis Fed President Bullard
  • 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.

participation rate