Fed’s bullard says US could see rapid drop in unemployment by Bloomberg

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© Bloomberg. James Bullard Photographer: Eric Thayer / Bloomberg

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(Bloomberg) – The U.S. labor market is expected to rebound quickly as more temporarily laid-off workers return to work and the coronavirus pandemic is under control, Federal Reserve Bank of St. Louis President James Bullard said .

“The dynamics of the labor market are very different from what you are used to thinking about in the recession,” Bullard said Friday while participating in a virtual roundtable with other central bankers. “There is a good chance that you can do quite well in the job market, pursuing relatively rapid declines in unemployment and therefore good prospects for the US economy.”

The US Treasury yield curve has steepened in recent months, reflecting investor optimism about the outlook for the economy, Bullard said. About $ 3 trillion in fiscal stimulus in the United States along with super-easy monetary policy helped prop up the recovery, while healthcare outcomes have improved over time, he said. he declares.

As the economy recovers, “this will affect our crucial 10-year benchmark,” he said. “We’ll see if we get the yield curve steepening in the future.”

As the United States continues to create jobs, the number of permanent job losers rose by 345,000 last month to 3.8 million in seven years, while the number of Americans temporarily laid off fell by 1 , 5 million to 4.6 million.

Bullard, who is not voting on monetary policy this year, has been among the most optimistic of Fed officials. He argued that the recovery is likely to continue even without further fiscal stimulus, while other Fed leaders have called for additional spending to support the expansion.

© 2020 Bloomberg L.P.

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