March’s strong US employment report is good news, but not a sign that there should be a change from the current loose monetary policy stance, Chicago Federal Reserve Chairman Charles Evans said Wednesday. “We still have a long way to go before economic activity returns to pre-pandemic vitality. Even after March’s very strong employment report at 6%, the unemployment rate is well above the 3.5% we saw on the eve of the pandemic, “Evans said, in a speech sponsored by Prairie State College. Foundation.
Employers added 916,000 new jobs in March and the unemployment rate fell to 6%. Read: Restaurants and other businesses hired the most workers in seven months Evans’ message was echoed by comments from other Fed officials this week. On Monday, Cleveland Fed Chair Loretta Mester told CNBC that the March report “was a great report,” but that the central bank had to be patient. “But we are still far from our political goals. We have to be deliberately patient in our approach to monetary policy, ”Mester said. And Dallas Fed Chairman Rob Kaplan told the Wall Street Journal on Wednesday that the economy still needs support from the central bank. At the start of the pandemic last year, the Fed cut its policy interest rate to zero. Additionally, the central bank is buying $ 120 billion of assets per month to support the economy. The central bank has said it will maintain that buying rhythm until there is “further substantial progress” towards the Fed’s targets of full employment and stable 2% inflation. Ethan Harris, head of global economic research at Bank of America Merrill Lynch Global, said the Fed’s policy was equivalent to having “both feet pressed on the accelerator.” Additionally, the fiscal stimulus checks passed by Congress have put “a lot of caffeine” into the economy and more spending is on the way, Harris said. The Fed will release the minutes of its March meeting at 2 pm ET on Wednesday. Economists are looking for clues as to what could cause the Fed to change its mind and begin withdrawing its support for the economy.