失业率，inflation 是提不提短期利率的关键。
Fed Officials Saw Recovery Curbed by Unemployment
By Craig Torres
April 6 (Bloomberg) -- Federal Reserve officials saw signsof a strengthening recovery that could be hobbled by highunemployment and tight credit, and some warned of raising ratestoo soon, according to minutes of their March meeting.
“While recent data pointed to a noticeable pickup in thepace of consumer spending during the first quarter, participantsagreed that household spending going forward was likely toremain constrained by weak labor market conditions, lowerhousing wealth, tight credit, and modest income growth,”minutes of the March 16 Federal Open Market Committee releasedtoday in Washington showed.
Fed officials are looking for signs of self-sustaininggrowth before they begin their exit from the most aggressivemonetary policy in U.S. history. Payrolls rose by 162,000 lastmonth, the most in three years, and manufacturing grew at thefastest pace in more than five years. At the same time, Fedofficials noted slack in the economy reflected in a 9.7 percentunemployment rate and slowing inflation.
“They want to see the whites of the eyes of everything --from strong growth to many months of employment,” said StephenStanley, chief economist at Pierpont Securities LLC in Stamford,Connecticut. “They want to see inflation accelerate so they aresure we are not going to get deflation, and they probably wantto see banks start to lend again.”
The FOMC said in its statement last month that the recovery“is likely to be moderate for a time.” Low rates of resourceuse and subdued inflation “are likely to warrant exceptionallylow levels of the federal funds rate for an extended period,”the statement said. Central bankers have used the “extendedperiod” phrase since March 2009.
Forward Guidance
The minutes showed policy makers discussed the statementlanguage and said “forward guidance would not limit theCommittee’s ability to commence monetary policy tighteningpromptly if evidence suggested that economic activity wasaccelerating markedly or underlying inflation was risingnotably.”
The Standard and Poor’s 500 Index rose 0.2 percent to1,189.44 in New York. Yields on U.S. two-year notes fell fourbasis points to 1.13 percent. A basis point is 0.01 percentagepoint.
The extended period “might last for quite some time andcould even increase if the economic outlook worsened appreciablyor if trend inflation appeared to be declining further,” theminutes said. “A few members also noted that at the currentjuncture the risks of an early start to policy tighteningexceeded those associated with a later start.”
Jobs Lost
Last month’s increase in payrolls, the third in the pastfive months, wasn’t enough to push down the jobless rate. Theeconomy has lost more than 8 million jobs since the recessionbegan in December 2007.
“They are seeing the recovery being held back for a timeby unemployment,” said David Semmens, U.S. economist atStandard Chartered Bank in New York. “They are not going to bemoving in any rush at all. We are not looking for the first ratehike until the third quarter of 2011.”
The minutes also showed that policy makers were surprisedby the rate at which inflation was slowing.
“Participants saw recent inflation readings as suggestinga slightly greater deceleration in consumer prices than had beenexpected,” the minutes said. “A number of participantsobserved that the moderation in price changes was widespreadacross many categories of spending.”
A price gauge favored by Fed officials, the personalconsumption expenditures price index, minus food and energy,rose 1.3 percent for the year ending February, slowing from a1.5 percent rate in January.
Inflation Readings
Fed officials stated a longer-run goal of 1.7 percent to 2percent for the full PCE price index in January. Central bankerslast month left the benchmark interest rate in a range of zeroto 0.25 percent, where it has been since December 2008.
Officials are considering a variety of tools to tightenpolicy, from raising the rate they pay on reserves banks keep atthe Fed to selling assets, to prevent a surge in inflation oncethe recovery takes hold.
Officials discussed allowing maturing Treasury securitiesto roll off the balance sheet without reinvestment. Suchredemptions would lower the interest-rate sensitivity of theFed’s portfolio over time, the minutes said, and limit the needto use other draining tools.
Expected Timing
“The initiation of a redemption strategy might generateupward pressure on market rates, especially if that measure ledinvestors to move up their expected timing of policy firming,”the minutes said. “Participants agreed that the Committee wouldgive further consideration to these matters” while the centralbank continues reinvesting all maturing Treasury securities.
U.S. central bankers last month completed their program topurchase $1.25 trillion of mortgage-backed securities, expandingthe Fed’s balance sheet to $2.31 trillion on March 31, near therecord $2.32 trillion the previous week.
Chairman Ben S. Bernanke told the House Financial ServicesCommittee March 25 that he anticipates “at some point we willin fact have a gradual sales process so that we can begin tomove our balance sheet back to its pre-crisis condition” whichhe described as “under” $1 trillion.
Officials in January unanimously agreed that Fed assets andbanks’ excess cash will need to shrink “substantially overtime” and return the central bank’s holdings to justTreasuries.
Sales Backed
Narayana Kocherlakota, president of the Federal ReserveBank of Minneapolis, today said he backs the gradual sale ofmortgage-backed securities. He isn’t a voting member of the FOMCthis year.
“If the Federal Reserve wants to normalize its balancesheet in the next five, 10, or even 20 years, it needs tosupplement the passive approach with an active one,” he said ina speech in Bloomington, Minnesota.
The minutes showed Fed officials are trying to identifypotential asset-price bubbles and determine whether financialfirms are using too much debt to boost returns.
“Members noted the importance of continued closemonitoring of financial markets and institutions” in order tosee “significant financial imbalances at an early stage,” theFed said. “At the time of the meeting the information collectedin this process, including that by supervisory staff, had notrevealed emerging misalignments in financial markets orwidespread instances of excessive risk-taking.”
To contact the reporter on this story:Scott Lanman in Washington at slanman@bloomberg.net.
