Fed's Quarles: It's clear we met test for taper

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