‘Optimistic’ Fed policymakers see US economy about to boom

2 April, 2021 12:00 AM printer

NEW YORK: Federal Reserve policymakers are optimistic about the US 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, report agencies.

“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 US$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,” Mr 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 said earlier in the day that he too is “optimistic” about the overall economy.

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

All that optimism at the US 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.