1. The Fed has never said how high they expect inflation to rise as the economy reopens. But I bet they are surprised by the Apr/May numbers, even though they'll play the "transitory" card next week.
2. The higher inflation rises, the higher expectations and wage demands will rise, other things equal. That means labor supply will have to increase further than previously expected in order to dampen 2nd-round effects. Participation back at pre-Covid levels might not be enough.
The Fed will stall on this question until the impact of the end of enhanced unemployment benefits is clear, and schools/childcare are fully reopened. They'll talk about tapering before the labor market outcome is clear, but the risk is that rate hikes have to be brought forward.

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Ian Shepherdson

Ian Shepherdson Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @IanShepherdson

12 Feb
1. The good news is that the US Covid numbers overnight continue to show cases, hospitalizations and deaths falling fast. The 7-day average number of new cases is now down 59% from the peak. But…
2. The bad news is that the UK variant, B117, now accounts for 4% of US cases, including 10% in Florida. much more infectious than old Covid and there's no way the existing restrictions across the US can keep it at bay...
h/t @DrEricDing and @my_helix
3. The variant now is on course to become dominant by late March, which means total new cases (old + B117) could start to rise again - fast. Absent a return to stay-home orders, the only way to stop this happening is faster vaccination. Too soon to tell if the race will be won
Read 4 tweets
22 Jun 20
1. Bloomberg @business just reported that Florida cases rose 3.0% today, below the 7-day average, 3.7%. This is good, right? No. Like many other places, FL cases vary across the week in a reasonably consistent pattern because of reporting delays over weekends.
2. Mondays are usually low-increase days for Florida. The bad news is that today's 3.0% increase compares to 2.3% Monday last week and just 1.5% the previous week. This is what matters. This is why the 7-day average number of new FL cases has risen for the 21st straight day...
3. ...It now stands at 3,328, having doubled in just eight days. If this continues, Fl will be reporting 26.6K cases *per day* by mid-July. Right now, the 7-day average for the *entire US* is... 26.6K.
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!