WASHINGTON (AP) — The U.S. job market is nearly healthy enough that the central bank’s low-interest rate policies are no longer needed, Federal Reserve officials concluded last month.
WASHINGTON (AP) — The U.S. job market is nearly healthy enough that the central bank’s low-interest rate policies are no longer needed, Federal Reserve officials concluded last month. Fed officials also expressed concerns in minutes from its December meeting, released Wednesday, that surging inflation was spreading into more areas of the economy and would last longer than they previously expected. “Many (policymakers) saw the U.S. economy making rapid progress” toward the Fed’s goal of “maximum employment,” the minutes said. “Several” officials said they felt the goal had already been reached. The economy is still roughly four million jobs short of its pre-pandemic level, though some Fed policymakers increasingly believe that all those jobs may not be recovered, at least not anytime soon, as older Americans retire and some former workers stay home to take care of children. The minutes underscored the Fed’s sharp pivot from what had been its policy through most of the pandemic, as it shifts from keeping interest rates very low to encourage more hiring, to moving quickly towards raising rates to rein in inflation, which has surged to four-decade highs. Fed officials also voiced rising concerns about inflation, saying that faster rate hikes may be needed, and signaling that they could start reducing the Fed’s huge portfolio of bonds more quickly than expected. Those moves pushed down stock prices after the minutes were released, with the Dow Jones Industrial Average falling almost 400 points at the close of trading.
