Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

'Optimistic' Fed policymakers see U.S. economy about to boom

EconomyMar 31, 2021 12:26AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. John Williams, CEO of the Federal Reserve Bank of New York, speaks at an event in New York 2/2

By Ann Saphir

NEW YORK (Reuters) - Federal Reserve policymakers are optimistic about the U.S. economic outlook as more Americans are vaccinated and government aid gets to households and businesses, and they are not going to stand in its way.

Richmond Fed President Thomas Barkin compared the pandemic economy to a roller-coaster pausing just before a thrilling high-speed plunge.

"The final stretch should absolutely be something, as excess savings and fiscal stimulus fund pent-up demand from consumers who are exhausted from isolation and who will be freed by vaccines and warmer weather," he told the Montgomery County Chamber of Congress in Maryland on Tuesday.

With nearly $6 trillion in government relief since the start of the pandemic and super-easy Fed policy, he said, he is "very bullish" on growth this year and expects spending to stay strong in 2022 and 2023.

Atlanta Federal Reserve Bank President Raphael Bostic said he is watching for "upside risks" to the economy's trajectory.

"We could see a burst of activity and performance coming into the summer which could lead us to see even more robust recovery," Bostic told the Atlanta World Affairs Council. "A million jobs a month could become the standard through the summer."

Economists expect a government report due on Friday to show 650,000 jobs added this month.

New York Federal Reserve Bank President John Williams (NYSE:WMB) said earlier in the day that he too is "optimistic" about the overall economy.

"We’re making great strides on the vaccination program," he told a virtual event organized by the New York Fed and AARP about small businesses. "I think we have a lot of positives going forward."

KEEPING RATES LOW

All that optimism at the U.S. central bank might, in years past, have signaled that policymakers would soon be ready to raise interest rates.

Traders of interest-rate futures are betting on it: Market prices suggest they see the Fed starting to raise rates next year.

But that is not what Fed policymakers are saying. Earlier this month, they reiterated a promise to keep interest rates at their current near-zero levels until the economy reaches full employment, inflation hits their 2% goal and is on track to surpass it for some time.

They also said they would continue to buy $120 billion in bonds each month to push downward on longer-term borrowing costs until they have seen "substantial further progress" on both their full employment and 2% inflation goals.

It is a plan based on a new approach to policy, adopted last August, aimed at making sure the Fed does not pre-emptively put a stop to job gains out of a fear of inflation that over the past couple of decades has proven to be sluggish, and unhealthily so.

It has also set a very different bar for raising rates from before, as the Fed's vice chair of supervision, Randal Quarles, noted earlier on Tuesday.

"I'm one of the biggest optimists" on the Fed's interest-rate setting committee, Quarles told the Peterson Institute for International Economics.

Before last year, he said, his current forecast for a drop in unemployment and an eventual rise in wages would have meant he would already be arguing for policy tightening.

But, he said: "The fact that I am an optimist is not really relevant under our new framework."

What is relevant, he said, is not what he expects the economy to do, but what the economy actually does.

"I believe we will get to that point where we are seeing those outcomes sooner than others, but we shouldn't jump the gun," he said. "Let's wait until we see those outcomes."

Quarles said he expected the rest of the Fed's policy-setting committee to be comfortable with inflation going somewhat over the Fed's 2% inflation target.

'Optimistic' Fed policymakers see U.S. economy about to boom
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
ZS Beck
ZS Beck Mar 31, 2021 1:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sure, it would be interesting to see after throwing 5 T $ into the system the economy moves backward. I like to see it next year.
Steve Lora
Steve Lora Mar 30, 2021 6:39PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
When pre covid economy was booming, where was this guy
John Thompson
John Thompson Mar 30, 2021 6:39PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
cutting interest rates to support the very strong economy viv the billionaires   fed fraud selling the same joke snake oil ponzie policies
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email