Finally, the next several months are critical for assessing whether the high inflation numbers we have seen are transitory. If monthly prints of inflation continue to run high through the remainder of this year, a more aggressive policy response than just tapering may well be warranted in 2022.
In terms of economic growth, data for the third quarter of 2021 show that the economic recovery slowed as the effects of the Delta variant caused consumers and businesses to start pulling back on some forms of economic activity such as travel and leisure.