In a presentation, St. Louis Fed President James Bullard said the health crisis will “wane in the months ahead” with early arrival of vaccines. “Macroeconomic forecasts suggest very strong U.S. real GDP growth for all of 2021,” he said, even though “downside risk remains”.
“Employment has rebounded more rapidly than expected”, he added. “Labor market recovery is about four years ahead of where it was following the 2007-09 recession”. Official unemployment rate could decline to as low as 4.8% in the months ahead.
Nevertheless, Bullard later added that “we’re still in the middle of a crisis, so it’s too early to initiate that discussion” about scaling back asset purchases.
