Could the Fiscal Impasse Kill Job Growth?
Is the Federal Reserve Bank of San Francisco signaling that it wishes to see changes to U.S. monetary policy? The bank released a letter, dated October 15, containing a report using indicators to predict the future state of the U.S. labor market.
The San Francisco Fed found improvements across six areas that are marks of continued improvement. The letter comes two weeks ahead of the next meeting of the Federal Open Market Committee (FOMC), during which the Federal Reserve will have another chance to end its program of quantitative easing.
The Fed was expected to begin tapering — the easing of the rate at which mortgage-backed securities and Treasury bonds are purchased by the U.S. government — in September. The minutes from the September 17-18 meeting, released by the Fed on Wednesday, show that participants who were against tapering were worried an “announcement of a reduction in asset purchases at this meeting might trigger an additional, unwarranted tightening of financial conditions.”