Pandemic Reshapes Economy as Labor, Supply Chains Alter; Fed's Guidance Murky

The pandemic has caused lasting changes to the economy, including tight labor markets, supply chain issues, and increased government support for industries like semiconductors.

Fed Chair Powell has avoided defining post-pandemic economic shifts, preferring to say the pandemic "is still writing the story of our economy."

Businesses are dealing with new realities like not enough workers despite pay raises, keeping higher inventory stockpiles, and increased consumer propensity to spend.

The lack of Fed guidance on economic shifts sows volatility in markets as investors have to guess how policies will respond.

Other central bankers like ECB's Lagarde have been more definitive about post-pandemic shifts like changes to labor and energy markets.