Inflation is soaring and employment is beginning to show sustained improvement. The unemployment rate is 6 percent, compared to its 3.5 percent rate prepandemic. The CPI grew 5.4 percent in June, and the Fed raised its inflation expectations for 2021 from 2.2 percent to 3.0 percent.

Is the Fed suggesting that the U.S. economy is moving along a short-run Phillips curve or thatthe short-run Phillips curve is shifting during2021? Explain.