Gregory Daco, Chief US Economist, and Kathy Bostjancic, Chief US Financial Economist, discuss how the economic recovery from the pandemic-induced shutdown will be bumpy as the nature of demand rotates toward services, and supply gradually responds to strong demand. Job growth will pick up sharply this summer, spending on services will firm and inflation will likely stop accelerating in H2. Still, while supply chain bottlenecks and labor shortages will ease in the coming months, inflation will be a feature of this recovery, not a bug. The Fed's conditional outcome-based forward guidance is not hawkish. It generally aligns with our view that discussion around QE tapering will start this summer with a possible Jackson Hole announcement provided the economic trajectory remain solid.