- Fed now in a good position to address inflation with hikes and if balance sheet runoff is needed
- Expects omicron infections to peak late this month
- Recent inflation shock means Fed’s average 2% target should be met for next several years
- Focus on returning US labor force participation rate to pre-pandemic levels ignores trend decline
The debate on the labor force is a good one. I struggle to believe the US can’t lower it, given the similar demographics with Canada.