In this episode of Macro Bytes we take a look at the US labour market and its implications for the Federal Reserve. What’s been holding back labour supply and how temporary or permanent is this? What’s behind the change in the dot plot and to what extent do markets need to fret about a more hawkish Fed?

Welcome to another week of Macro Bytes. In this episode our host Paul Diggle is joined by James McCann from ASI and Kathy Bostjancic from Oxford Economics. Following the COVID-19 pandemic, the US is seeing a slower than expected recovery of the labour market. We discuss the potential causes and the future outlook. 

Part 1 focuses on the labour market, the causes behind mismatched labour supply and demand, and the implications for inflation. 

Part 2 discusses the June Federal Reserve meeting  and what monetary policy normalisation means for financial markets.

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