Pimco's Wilding Says U.S. GDP Growth Could Top 7% This Year

The video discusses the impact of a $1.9 trillion stimulus on economic growth, predicting a growth rate of over 7%, the fastest in 40 years. It highlights the output gap and structural changes in the labor market that may dampen inflationary pressures. The Fed's focus on labor market slack is expected to keep inflation low. Employment levels lost during the pandemic are not expected to recover until mid-2023, with the Fed aiming for maximum employment.

What does the Fed's 2% target for inflation imply about long-term inflation expectations?

How does the speaker view the relationship between the output gap and inflation?