In recent trade, Federal Reserve Governor Michelle Bowman said that the labour market will take time to heal from the effects of the COVID-19 pandemic and more needs to be done for the US economy to get fully back on track.
"Despite the encouraging pace of recent hiring, employment is still far below where it was…I am hopeful that we will continue to build on this recent positive momentum since there is more work to be done to get the economy back on strong footing," Bowman said in prepared remarks to a conference on fostering an inclusive economic recovery.
Key comments
- It may take time for some people to reenter the labour force.
- Employment is still far below where it was despite recent gains.
- Many households still face challenging times.
- More work is to be done to get the US economy back on a strong footing.
Earlier on Tuesday, San Francisco Fed President Mary Daly echoed those sentiments, pointing out there are almost 10 million people who are unemployed and more currently on the sidelines of the labour market.
Those views diverge with some other officials at the central bank as the interest-rate setting committee mulls when to start withdrawing some of the extraordinary monetary support designed to help the U.S. economy recover from the health crisis.
Analysts at Brown Brothers Harriman argued that ''despite Powell’s dovish press conference, tapering still seems likely to come sooner rather than later,'' and noted comments from the more hawkish of Fed members.
James "Jim" Bullard, president and CEO of the Fed real Reserve Bank of St. Louis and Bullard’s former colleague current Governor Waller joined him by saying he could see a tapering announcement by September and commencement by October.
''Waller said the delta variant shouldn’t "sideline" the economy but that this timeline is contingent on two more strong jobs reports. He stressed that “We should go early and fast, in order to make sure we’re in a position to hike rates in 2022, if we have to.” We think this is the first time for this cycle that any Fed official has called for a hike and it’s clear that Bullard and Waller (along with Kaplan and Evans) are forming a hawkish core at the FOMC,'' analysts at BBH wrote.
Meanwhile, there are prospects of a deeper bullish correction in the greenback as explained in the following analysis of the euro:
- EUR/USD Price Analysis: Something for everyone