Comments from Kaplan and Bullard
Kaplan:
- Sees 6.5% growth with unemployment down to 4.0-4.5% unemployment
- What you're seeing in the summary of economic projections is much better data and the Fed reacting to that
- We've seen a dramatic drop in skills-training programs during the pandemic. We need to restore the pipeline
- Spending on energy transition is likely to be a persistent inflation boost
- Issue coming out of financial crisis was a lack of demand. The issue now is supply constraints
- Notes that single family buyers are being squeezed out of housing by post office boxes in Delaware
- It would be wise not to rely on the dollar remaining the world's reserve currency indefinitely
Bullard:
- I have 2022 core PCE inflation at 2.5%
- We have to be ready for the idea of upside inflation. We have to be ready on both sides
- The anecdotal evidence is overwhelming that this is a very tight labor market
- We're going to give plenty of leeway for the labor market to improve
- Part of the debate is the question of what it means to have inflation above 2% for some time
- The low-rate and low inflation era is not ending any time soon
- On hike in reverse repos, this was largely a technical move to keep rates within our band
- On the drop in yields: Treasury yields can't ignore low rates in Europe and Japan
These are the FOMC hawks and I just don't see the kind of urgency to hike rates to justify the move in the US dollar last week.
