And while the link between wages and inflation can be tenuous, it is encouraging that we are seeing tentative indications of an acceleration in labor compensation. Once we begin to remove policy accommodation, the Committee’s assessment is that economic conditions will likely warrant raising the federal funds rate only gradually.
Hence you can hear that it is currently simultaneously the best of times and the worst of times for liquidity in the bond market. Bond market liquidity at the “top of book” is, on a number of metrics, 3 as good as it has ever been.