WASHINGTON: Federal Reserve officials were encouraged last month by evidence the U.S. economy was picking up, but they showed no sign of moving closer to ending their bond purchases or lifting their benchmark short-term interest rate from nearly zero.
Fed policymakers also said they expect inflation will likely rise in the next few months because of supply bottlenecks, but they believe it will remain near their 2% target over the longer run.
It would likely be some time until substantial further progress toward the Fed’s goals of maximum employment and inflation at 2% are reached, and asset purchases would continue at least at the current pace until then, the Fed said in minutes taken during its March 16-17 meeting. The minutes were released Wednesday after the customary three-week lag.
The meeting came before last week’s March jobs report, which showed a surprisingly strong 916,000 positions were added that month, the most since August, and the unemployment rate fell to 6% from 6.2%.
But some Fed bank presidents have stuck to the same message this week that was contained in the minutes. They argue that the economy still needs to improve further before the central bank will pull back on its support for the economy.
All told, even though the economy is recovering, we still have a long way to go before economic activity returns to its pre-pandemic vibrancy, Charles Evans, president of the Federal Reserve Bank of Chicago, said Wednesday in prepared remarks.
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