Flattening the Unemployment Curve

Barron’s published my Letter to the Editor (June 19):

Fed Reassurance

To the Editor:
The article “The Fed Is Optimistic About the Recovery—If Congress Does More Now” (The Economy, June 12) mentions that the Federal Reserve’s latest projections are optimistic about the postcrisis “longer run” prospects for the U.S. economy. I would add that their projections for 2021 and 2022 indicated a positive outlook, as well.

The projections of 5.0% growth for 2021 and 3.5% growth for 2022 are consistent with a strong economy. The current unemployment rate of 13.3% for May is projected to decline to 9.3% by the fourth quarter of 2020, and then to 6.5% in the fourth quarter of 2021 and 5.5% in the fourth quarter of 2022. These latter projected rates are very close to the average unemployment rate of 5.7% since 1948 and 6.2% over the past 50 years. The unemployment rate of 3.5% in February was a 50-year low. Inflation is projected to be only 0.8% in 2020, 1.6% in 2021, and 1.7% in 2022. The federal-funds rate is projected to remain at 0.1% through at least 2022.

David I. Kass, University of Maryland, College Park, Md.

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