Why FOMC could resort to monetary policy normalization sooner than expected – WSJ

Dhwani Mehta FXStreet

The Wall Street Journal (WSJ), In an editorial opinion piece, explains why the Federal Reserve (Fed) could likely dial back monetary stimulus sooner than expected.

Key quotes

The Fed goal of maximum employment and why hitting it could come sooner than expected.

“2.6 million people retired since February 2020, according to estimates from the Dallas Fed. “

“Cleveland Fed President Loretta Mester said June 4 on CNBC. "Typically, when people retire, they don't come back into the labor force."

“Treasury Secretary Janet Yellen ... said on June 5 that while employment remains more than 7 million jobs below pre-pandemic levels, increased retirements could mean "we don't need to regain quite that many to get back to full employment."

“While current Fed officials have been less explicit in their public comments, they have signaled a similar openness. “

Note that the FOMC meets this week, June 15 and 16, to decide on its monetary policy.

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Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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