Orientation does not change. There is no reason, even if there is a bit of “foam”, linked to the recovery, on the financial markets, where some prices are “high”. The Federal Reserve has confirmed not only all the measures prepared to counter the economy – zero interest rates, and purchases of securities for 120 billion dollars a month – but also the intention to accompany the recovery with a decidedly accommodative monetary policy, in tandem – evidently – with fiscal policy, expansive as never happened in recent decades.
The April meeting – intended for an “ordinary maintenance” of expectations – only changed the assessment of the conditions of the economy. On which “risks remain”, explained the official statement, relating above all to growth, even if the indicators of economic activity and employment “have strengthened” – even, President Jerome Powell added at a press conference, “more than expected »- while in March they had simply” returned positive “.
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Even the sectors most affected by the pandemic, which remain weak, “have shown improvements” even if employment in the leisure and hospitality sectors remains lower than the prepandemic ones: three million jobs are missing.
Inflation – which in recent weeks has animated the discussion among economists and pushed up the yields of longer terms – does not signal problems: it is on the rise “largely reflecting temporary factors”. Financial conditions – which measure the impact of monetary policy along the entire transmission chain – therefore remain and must remain “accommodative”, exactly as in March.
Everything now depends on the trend of vaccinations, and its effects: new cases remain high, Powell said. Also for this reason “it is not yet time” to talk about a tapering, a reduction in the purchases of securities, which will be announced well in advance. We will need to see new steps forward and “it will take some time before we see further, notable progress”. In short, the recovery is still “incomplete”: there are still 8.5 million fewer jobs than in February 2020.