Cyclical Considerations As I have noted elsewhere, the recently enacted fiscal stimulus should boost the economy at a time when it is close to full employment and growing above trend. It is hard to know with precision how the economy is likely to respond.
If unemployment continues to decline at the rate of the past year, it could reach levels not seen in several decades. Historically, such episodes tended to see a risk of accelerating inflation in earlier decades or a risk of financial imbalances in more recent decades.