Feds Quarles speaking
- It's clear we've met test for taper
- Supports decision at November meeting to reduce Fed's asset purchases, and taper by mid-2022
- Fed remains patient to allow more recovery in jobs
- Fed is not behind the curve on inflation fight
- Inflation likely will decline considerably next year, but upside risks are significant
- Constraining demand that would be premature
- Monitoring how additional fiscal programs could further boost demand
- Will want to see further improvements in the new employment evolution of inflation in coming months
- If inflation does not recede next year, or if expectations become unanchored, Fed's tools can bring inflation down
- My focus is turning into inflation from labor market
- See strong economic growth for rest of 2021 in 2022
- Strong demand for labor outpacing supply, pushing up wages
- Labor force particular to patient unlikely to return to pre-pandemic levels
- If inflation goes on for longer period of time, would need to act to bring demand down
- Need to allow more time before thinking about raising interest rates
