US Full-Employment Prospects and Surging Yuan’s Path Ahead

By Blu Putnam, Chief Economist
Erik Norland, Senior Economist
CME Group

Yuan Rises Amid US Demand for Chinese Goods

• Yuan gained 10% against US dollar in 10 months through January 2021.
• US demand for Chinese products helped fuel the yuan’s appreciation.
• Demand could switch to US service sector as vaccination progresses.
• Will yuan give back gains or will new factors support the currency?

Can US Attain Full Employment by 2022?

• ​​​March employment report showed robust jobs recovery.
• Possibility of achieving full employment at end-2021 or 2022.
• A return to full employment could normalize monetary policy sooner.
• Fed fund futures point to a rate hike between April 2022-March 2023.