The U.S. jobs market still has some ways to go before it improves enough to satisfy the Federal Reserve’s criteria for beginning to reduce its asset purchases, Governor Lael Brainard said Friday.
In the text of a speech intended for delivery to the Aspen Economic Strategy Group, Brainard also suggested that the recent surge in inflation is likely to prove temporary and said that she saw both upside and downside risks to the economy, the latter from the spread of the Delta variant of Covid-19.
The Fed is currently buying $120 billion of assets per month — $80 billion of Treasury securities and $40 billion of mortgage backed debt — and has pledged to keep up that pace “until substantial further progress” has been made toward its goals of maximum employment and 2% inflation.
“Employment has some distance to go” to meet that test, Brainard said in the speech. “There is a shortfall of 6.8 million jobs relative to the pre-pandemic level and 9.1 million jobs relative to the pre-pandemic trend.”
Fed officials meeting earlier this week said they would continue to assess that progress at coming meetings.
