The data comes just as Spring is getting on the way, which is significant in the scheme of quantitative easing. For each of the past three years, the government has apparently interpreted warmer weather as a sign that economic conditions are improving, and made preparations to cut spending and pursue an exit strategy.
More spending would invariably be pushed later in the year as conditions failed to actually improve. However, this year observers are expecting the Fed to identify the pattern and continue purchasing bonds at a rate of $85 billion per month.
In a speech on April 5, just ahead of the most recent labor market report, Eric Rosengren, president and CEO of the Boston Federal Reserve bank, said that “continued accommodative policy, such as continuing our asset purchase program through this year, is an appropriate response to labor market scarring.”
Rosengren and Dudley are both currently FOMC voting members who have encouraged the Fed to keep the easy-money policy in place at least through the end of the year.
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