Us federal r대구 출장 안마eserve chairman says economy is on ‘track to full employment’ but jobs market is fragile
Federal Reserve chairman Ben Bernanke’s call for “patient” monetary policy has caused a headache for the Fed, with traders warning the central bank may be running out of patience before the economy starts showing signs of picking up again.
As it prepares to lift interest rates for the first time since 2010, Bern파라오 카지노anke is widely expected to focus on a possible rise in rates this year, in response to a prolonged squeeze on the housing market. He has also pushed for new asset purchases to keep the banks safe from rising inflation in an era of higher spending.
The prospect of a rise was thrust into the spotlight this week when the chief economist of Bank of America Merrill Lynch warned that even if monetary policy could manage to lower inflation to 1.5%, a major concern for some central banks, such a move would not be enough in a market that is still struggling with a weak job market.
“If inflation is less than 2%, we think policy will still be ineffective,” said Chris Gershenfeld, a senior economist at Credit Suisse in New York. “The longer they wait to stimulate, the more pressure they will be under to make interest rates rise.”
The Bank of Canada’s chief executive, Stephen Poloz, has called on the central bank to keep its inter바카라 사이트est rate on hold as long as possible, telling investors that monetary policy is expected to be tightened further over the coming months. The central bank will probably do so as soon as next month, he said in a speech on Wednesday.
Bernanke has warned that such rapid tightening will be counterproductive. “If we wait until inflation is 2% and then tighten further, the economy is likely to slow down too much,” he said.
But Bernanke will be facing an uphill climb when it comes to convincing consumers and businesses that inflation should remain on a steady but subdued pace.
At current rates of inflation, the average consumer purchasing power would fall from 3% to 2% by 2023, according to Bank of America. That rate of decline would push the economy slightly below full employment, according to economists’ estimates.
A major fall in price pressure from falling food and energy costs, a reduction in manufacturing costs that would reduce manufacturing capacity and a shift away from manufacturing to services would push more costs of goods and services onto consumers’ backs, and push inflation higher, the Fed’s chief economists forecast.
Some economists have predicted a recession will begin this year, but th