5 i also argued that, if the july and august job reports came in around the forecast values of 800, 000 to 1 million job gains per month, we should commence tapering our asset purchases at the september 2021 fomc see board of governors of the federal reserve system ( 2021 ), “ minutes of the federal open market committee, june 15 – 16, 2021, ” press release, https : / / www. federalreserve. gov / newsevents / pressreleases / monetary20210707a. htm. see board of governors of the federal reserve system ( 2021 ), “ minutes of the federal open market committee, july 27 – 28, 2021, ” press release, https : / / www. federalreserve. gov / newsevents / pressreleases / monetary20210818a. htm. see ann saphir ( 2021 ), “ fed ’ s waller : ‘ go early and go fast ’ on taper, ” reuters, august 2. - 5meeting. the july report was indeed over 1 million new jobs, but then the august report shocked us by reporting only 235, 000 new jobs when the consensus forecast was for 750, 000. i considered this a punch in the gut and relevant to a decision on when to start tapering. 6 nevertheless, the september fomc statement noted that the economy had made progress toward the committee ’ s goals and that, if progress continued, it would soon be time to taper. 7 up until october, monthly core personal consumption expenditures ( pce ) inflation was actually slowing. as shown in figure 1, it went from 0. 62 percent in april to 0. 24 percent for the month of september. the september jobs report was another shock, with only 194, 000 jobs created. so, up until the first week of october 2021, the story of high inflation being temporary was holding up, and the labor market improvements had slowed but were continuing. based on the incoming data, the fomc announced the start of tapering at its early november meeting. 8 it was the october and november consumer price index ( cpi ) reports that showed that the deceleration of inflation from april to september was short lived and year - overyear inflation had topped 6 percent. it became clear that the high inflation realizations were not as temporary as originally thought. and the october jobs report showed a significant rebound with 531, 000 jobs created and

had very accommodative monetary policy that i believed would end in 2022. the issue in my mind was whether these factors would start fading away later in 2021 or in 2022. over the summer of 2021, the labor market and other data related to economic activity came in as i expected, and so i argued publicly that we were rapidly approaching “ substantial further progress ” on the employment leg of our mandate. in the june summary of economic projections, seven participants had liftoff in 2022 and only five participants projected liftoff after 2023. also, unlike the march sep, every committee participant now expected inflation to be over 3 percent in 2021 and just five believed inflation would be at 2 percent or below in 2022. in addition, the vast majority of see christopher j. waller ( 2021 ), “ a hopeless and imperative endeavor : lessons from the pandemic for economic forecasters, ” speech delivered at the forecasters club of new york, new york, december 17, https : / / www. federalreserve. gov / newsevents / speech / waller20211217a. htm. - 4participants now saw risks associated with inflation weighted to the upside. the june 2021 minutes also describe the vigorous discussion about tapering asset purchases. numerous participants said that new data indicated that tapering should begin sooner than anticipated. 3 thus, in june, after observing high inflation for only three months, the committee was moving in a hawkish direction and was considering tapering sooner and pulling liftoff forward. at the july fomc meeting, the minutes show that most participants believed that “ substantial further progress ” had been made on inflation but not employment. 4 tapering was not viewed as imminent by most participants. again, individual participants had different metrics for evaluating the health of the labor market, and this approach influenced how each thought about policy. so, in my view, one cannot address the question of “ how did the fed get so far behind the curve? ” without taking a stand on the health of the labor market as we moved through 2021. based on the incoming data over the summer, my position was that we would soon achieve the substantial further progress needed to start tapering of asset purchases — in particular, our purchases of agency mortgage - backed securities — and that we needed to “ go early and go fast ” on tapering our asset purchases to position ourselves for rate hikes in 2022 should we need to tighten policy.