The U.S. economy picked up speed going into the spring on the back of growing confidence among consumers, the Federal Reserve said on Wednesday, and Fed Chair Jerome Powell said it is on track for stronger growth and hiring in the coming months.
Economic activity between late February and early April was buoyed by increased COVID-19 vaccinations and strong fiscal support, and the labor market also improved as more people returned to work, the U.S. central bank said in its latest “Beige Book,” a collection of anecdotes about the economy from its 12 regional districts.
CNBC’s Steve Liesman reports on comments from Federal Reserve chairman Jerome Powell on monetary policy and the U.S. economy.
Powell suggests Fed will follow the 2013–14 playbook when it starts to taper its asset purchases
QE taper to come ‘well before’ interest-rate increase. No direct sale of bonds contemplated, Fed chairman says.
The Fed chairman said the central bank would likely taper asset purchases “well before the time we consider raising interest rates.”
“We haven’t voted on that order, but that is the sense of the guidance that it would work in that way,” Powell said.
The comments fill in some gray areas for economists seeking to gauge the Fed’s plans for the inevitable exit. Economists are predicting the U.S. economy will roar back to life this year, with gross domestic product perhaps hitting a 10% annual rate in coming quarters.
That was the same policy playbook the central bank followed in 2013 and 2014. The Fed started tapering asset buying in December 2013 and didn’t raise interest rates for two years.
New York Fed's Williams: Fed has tools to deal with high inflation
Inflation could be volatile in the near term as the economy recovers from the pandemic but overall price increases should remain subdued and the Federal Reserve knows how to act if inflation gets too high, New York Fed President John Williams said on Wednesday.
Fed vice-chair Clarida says Fed rates will be lower for longer, will delay lift-off and talks about the new policy framework
We will react to data itself, not forecasts
We won't tighten solely because of a decline in unemployment
Accommodative policy will remain until some time after goals met
I follow closely the Fed staff's index of common inflation expectations (CIE)-which is now updated quarterly on the Board's website-as a relevant indicator that this goal is being met.
Fed's Kaplan: will be 'a while' until U.S. reaches full employment
Dallas Federal Reserve Bank President Robert Kaplan said Wednesday it will be “a while” before the United States reaches full employment, even as he repeated his view that the Fed should begin to withdraw support from the economy sooner than most of his colleagues do.
The Fed should reduce its “extraordinary measures...at the first opportunity once we’ve reached, and are reaching, some of these benchmarks” including the weathering of the pandemic and progress toward full employment and 2% inflation, he said in a virtual appearance at the Woodlands Area Chamber of Commerce.
Thai
Eng