4 But considering the data for 2021, as shown in figure 2, the Phillips curve suddenly looked relatively steep. That is, the labor market became extremely tight as the U.S. economy emerged from pandemic lockdowns.
At that point, the Bank would start buying assets again as part of our regular balance sheet management process. 9 Given that a great deal of uncertainty surrounds our estimate for the long-run level of reserves needed, we will be monitoring short-term funding conditions as our settlement balances decline.