President’s perspective

On Excesses and Imbalances

“My concern is, as a result of the [Fed’s] asset purchases [of mortgage-backed securities and Treasuries], we are seeing unintended side effects and excess risk taking, particularly in the credit markets … that I think are going to need to get normalized. We are also seeing impacts on the housing market. … I think we’ll be a lot healthier if we can soon wean off of these purchases, and it will put us in a much better position going forward.”

Interview with CNBC—Aug. 26, 2021

On Asset Purchases and the Federal Funds Rate

“I think it is important to divorce discussions of the fed funds rate from discussions of our purchases [of mortgage-backed securities and Treasuries]. My comments on purchases are not intended to suggest I want to take more aggressive action on the federal funds rate.”

Interview with Reuters—Aug. 4, 2021

Supply/Demand Imbalances to be Longer Lasting

“My contacts are telling me that supply/demand imbalances for materials are going to last longer than people may be expecting. Certain material imbalances are going to get resolved, but my contacts in the semiconductor industry are telling me that it could take much longer to see those imbalances resolved.

The one area where I see these imbalances being even more persistent is labor supply/demand. We’ve had 3 million retirements since February 2020, and [roughly] another 1 million people leaving the workforce to be caregivers and/or [due to] fear of infection. As a result, businesses are becoming resolved to the idea that it will be harder to attract labor; they are going to have to pay more. … I think these labor supply imbalances are going to be with us for an extended period.”

Interview with Bloomberg—Aug. 27, 2021