“It could be appropriate” for the US central bank to begin tapering its bond-buying program before the end of the year, Federal Reserve Bank of New York President John Williams said on Wednesday.
“Assuming the economy continues to improve as I anticipate, it could be appropriate to start reducing the pace of asset purchases this year,” Williams said in remarks prepared for a virtual event. “I will be carefully assessing the incoming data on the labor market and what it means for the economic outlook, as well as assessing risks such as the effects of the Delta variant” of SARS-CoV-2.
The US Federal Reserve cut its benchmark interest rate to nearly zero and aggressively bought bonds last year at the onset of the COVID-19 pandemic.
It has said that it would continue the purchases at the current pace of US$120 billion per month until the US economy has made “substantial further progress” toward its maximum employment and price stability goals, which many officials have said would likely be achieved this year.
“I think it’s clear that we have made substantial further progress on achieving our inflation goal,” Williams said. “There has also been very good progress toward maximum employment, but I will want to see more improvement before I am ready to declare the test of substantial further progress being met.”
US employers added just 235,000 workers to payrolls last month, the US Department of Labor said in its monthly jobs report on Friday last week.
The weak hiring figure was well below what was expected by forecasters polled by Bloomberg, following two straight months of job creation closer to 1 million in June and July.
“Probably some of that is the Delta variant having some effects, but it’s hard to really know,” Williams said after the speech.
He added that judging “substantial further progress” was ultimately about assessing cumulative job creation since December last year, when that marker was laid out.
“Some months come in stronger. Some, not so strong,” he said. “It’s really about the accumulation of that.”
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her finance ministry, which has refused to rule out any options to counter excessive foreign exchange volatility. Takaichi later softened her stance, saying she did not have a preference for the yen’s direction. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” Takaichi said on Saturday at a rally for Liberal Democratic Party candidate Daishiro Yamagiwa in Kanagawa Prefecture ahead of a snap election on Sunday. “Whether it’s selling food or
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