US employment – Progress? Yes. Substantial? Not yet

The Fed bases its monetary decisions on data-based analyses. This is the reign of the quantitative approach. But in its communication, because it has to deal with uncertainty, the Fed also uses qualitative assessments. Two adjectives currently dominate its thinking: transitory to describe the surge in inflation, substantial in reference to the further progress in employment deemed necessary to initiate tapering. The fall in long-term rates suggests that the thesis of a transitory...