As investors seek growth acceleration and slightly faster price increases, Federal Reserve watchers began to hope that it could begin to slow its purchases of large bonds, which it has used to boost growth and raise interest rates. interest earlier than before was anticipated.
The central bank has promised to keep interest rates close to zero until the economy reaches full employment and inflation is above 2% and is expected to remain so for some time. If markets expect the economy to achieve these goals sooner or later, this can be seen as an expression of optimism.
“If you look at why they are going up, it has to do with expectations of a return to more normal levels, inflation levels more consistent with the mandate, greater growth, an opening economy,” Jerome H. Powell, president of Fed, said of the rates during a recent testimony in Congress.
But the markets are looking to the future: the economy still has a long way to go before it returns in full force. Government officials have pledged not to be distracted by improvements in important numbers, such as overall job growth, and instead to continue fueling the recovery until historically disadvantaged groups regain jobs, income and the benefits of other measures of economic progress.
Employment gains last month were above economists’ forecasts, but it would take more than two years of hiring at the current level to return the job market to its employment level in early 2020.
In addition, while all demographic groups continue to experience economic difficulties, the consequences have not spread evenly. Employment for black workers remains almost 8% below its pre-pandemic level, while employment for white workers has fallen by about 5%. Black workers tend to lose jobs heavily during recessions and then recover them only after a long period of job growth.
Jones, the labor department economist, said the government was determined to accelerate the recovery for marginalized workers, noting that black workers, in particular, took years to recover from the 2008 financial crisis – a delay that left scars lasting in these families.