A senior Fed official said that the US labor market is tighter than it seems, which may speed up the timetable for the Fed to remove some monetary stimulus measures from the economy.

In an interview with the Financial Times, St. Louis Fed President James Brad said that although the data show that the number of non-agricultural employment is still 8 million below the pre-pandemic level, other indicators are far close to normal and are consistent with anecdotal evidence of workers. shortage.

“I’m gradually making the judgment that the labor market should be interpreted as being quite tight. You will definitely see this in companies, and they say they will continue to raise wages for these types of workers. They continue to say,’Let We pay some signing bonuses and let workers in,’ and you will see that some companies actually just closed because they couldn’t find enough workers,” Brad said.

He added that he “began to advocate” that the Fed consider other measures to measure the tightening of the labor market, especially The ratio of unemployment to job vacancies, It was a low of 0.8 in February 2020, rose to 5 during the first lockdown, and fell back to 1.2 in March 2021.

“I would say that we should re-examine what we think we expect from the labor market,” he said. “The reason I push people to work in this direction is that I think it’s more consistent with the anecdotal evidence we got, which is that recruitment is very difficult,” he added.

Brad is one of the longest-serving members of the Federal Open Market Committee. Although he does not have the right to vote this year, he will vote in 2022. Consistent with other remarks made by Fed officials in recent days, Brad said that the central bank is about to start discussions on reducing the $120 billion monthly asset purchase program in view of the improved outlook.

“In my opinion, this involves judging when you think the pandemic has been fully controlled, and you can start talking about changing the parameters of monetary policy. It looks like we are close to that moment,” Brad said.

“I know some of my colleagues are more anxious to start discussions than others, but we will look at the chairman’s decision at the June meeting,” he added.

The Fed has stated that compared with December last year, the US economy must make “substantial further progress” in inflation and labor markets before it can gradually reduce asset purchases. Randy Quarles, Vice Chairman of the Federal Reserve Noticed last week Although recent increases in consumer prices indicate that inflation has passed the test, this is not the case in the labor market.

However, Brad stated that the Fed has “achieved considerable success” in its employment goals — and the central bank may wait in vain for the full restoration of employment and labor participation — because many of its workers are “slightly” attached to To the ranks of workers, especially older workers may not come back.

“Although this is a booming economy and GDP is growing by leaps and bounds, I am not sure if employment will follow,” he said, adding that he does not expect monthly employment growth to be as high as 1000000.

Brad said that if we think that the pandemic is over, using alternative measures of labor market tightening “may give me more comfort and start talking about changing the parameters of monetary policy.”

Brad’s view of inflation appears relatively moderate. He said that he expects high inflation-higher than the Fed’s average target of 2%-will continue until 2022, but this is fully in line with the Fed’s goal of pushing up prices when the economy rebounds.

“You will see all kinds of very unusual economic data, including price data. Therefore, it is not always easy to interpret and distinguish between signal and noise. But as far as we can do it, I think things are progressing pretty well now. It goes well,” Brad said.

He added that he was “very happy” and even “enthusiastic” about the Fed’s new policy framework introduced last summer, which was more tolerant of higher inflation for a period of time to allow a more stubborn pursuit of full employment.

He said: “You have to make up for the low period and the high period so that you can truly achieve the average inflation target of 2%.”

Brad strongly opposed the criticism of the Fed by some economists, investors, and mainly Republican lawmakers that the Fed might be forced to adjust its course drastically to avoid a 1970s-style inflation spiral.

“I think it’s hard to see… How would you trigger the type of inflationary explosions in the 1970s and early 1980s. I know this can happen, but I think we are in a different system here. And I think we are in a different system here. Appropriately adopt monetary policy strategies,” he said.

In terms of future interest rate hikes, Brad suggested that the Fed will proceed cautiously and will only raise interest rates from an ultra-low level after the end of the asset purchase-which is roughly the same as the “playbook” used after the financial crisis.

“I realize this is a different situation-maybe things are going faster, or some types of stress won’t be realized as we thought. In this case, we may have to be flexible, but we have enough Time to adjust this,” he said.