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MNI BRIEF:Fed's Bullard Sees Inflation 'Meaningfully' Above 2%


St. Louis Fed President said Thursday U.S. inflation will rise "meaningfully above 2% over the forecast horizon," adding that the labor market may be much tighter than data suggest.

MNI has reported growing concerns about the prospect of inflation among ex-Fed staffers and some current ones as ultra-low interest rates mix with a much more proactive fiscal policy. Consumer prices rose 4.2% in the year to April, much stronger than expected.

Bullard noted in his remarks that downside risk remains, but it is becoming less pronounced, and said the labor market may be much tighter than data suggest. "Alternative measures of labor market performance may give a more accurate reading of the state of the labor market than the number of jobs on payrolls or the number of hours worked," he said. One such measure is the ratio of officially unemployed workers to job openings, which is approaching an all-time low, suggesting a very strong labor market, he said.

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