According to the US Federal Reserve vice chair, Stanley Fischer, US targets for employment and inflation may be attained sooner rather than later.
US Close To Hitting Employment Target and 2% Inflation, Fed Reports
Delivering his speech in Colorado, the central bank’s vice was optimistic about the bounce back by the US economy and the bright future ahead.
He said, “We are close to our targets.”
Mr. Fischer further added that employment growth had been impressively resilient.
However, he refrained from speaking about interest rates but his upbeat remarks will still trigger anticipation over the possibility of an interest hike.
The Fed vice chair pointed out that this year’s rate of job growth was slower than 2015 but was adequate to support the labor market.
Speaking at a conference in Aspen, Mr. Fischer said that inflation was closer to the Fed’s target rate of 2%.
He added that in the past few years, the US economy had to deal with several economic issues including a stronger dollar, the Greek crisis and general financial turbulence domestically and globally.
He pointed out that, “In spite of these shocks, there were great improvements in the labor market characterized by increased employment and a reduction of unemployment rates to the natural rate.”
Mr. Fischer said such a feat was indeed remarkable and even under-appreciated given that the economy had bounced back to almost full employment in a considerably short time following a major financial crisis.
The Fed policy maker said that a significant concern, however, was the slowdown in productivity growth in the US. If such a slowdown went on for too long, it would inhibit wage and job growth.
Mr. Fischer was adamant about the interest rates issue. It has been widely anticipated that the Fed will hike interest rates this year under the condition that the economy will keep up its strength.
He was however optimistic that US growth will continue to build up in the coming months.