By Reuters Staff
1 Min Read
(Reuters) - Kansas City Federal Reserve President Esther George on Tuesday said the Fed has the tools to “rein in” inflation if needed, but added that she does not expect the Fed to react if inflation rises only slightly above its 2% goal.
Indeed, she noted, the U.S. economy was able to grow before the crisis with little upward pressure on inflation even when unemployment was as low as 3.5%, as it was in early 2020. That level of unemployment will be a “marker” for the Fed as it assesses what full employment is, she said.
Reporting by Ann Saphir; Editing by Chizu Nomiyama
Bond giant PIMCO expects the U.S. economy to return to pre-pandemic levels later this year but warned of political and economic risks that could derail the recovery, including a sooner-than-expected withdrawal of fiscal stimulus.
Atlanta Federal Reserve president Raphael Bostic said Tuesday he was hopeful issues of economic inclusion and equality "will be a centerpiece" of the incoming Biden administration and bolster the Fed's increasing focus on those issues.
The U.S. economy could see a strong rebound in the second half of this year as vaccinations become widely available, but the virus is still driving the economy and monetary policy will remain accommodative, Boston Federal Reserve Bank President Eric Rosengren said Tuesday.
Delay in the rollout of coronavirus vaccines is now among the most substantial risks facing the United States, Kansas City Federal Reserve President Esther George said on Tuesday, with the economy poised for a "snapback" once the immunization program succeeds.