A senior US Federal Reserve official said that the central bank needs to be patient with easy monetary policy to achieve its inflation and employment goals.

“Today the economy remains far from our goals in terms of both employment and inflation, and it will take some time to achieve substantial further progress,” Fed Governor Lael Brainard said while virtually addressing the Council on Foreign Relations on Tuesday.

“Jobs are still 10 million below the pre-Covid level, and inflation has been running below 2 per cent for years. We will need to be patient to achieve the outcomes set out in our guidance,” Brainard said.

While President Joe Biden’s $1.9 trillion Covid-19 relief package is moving ahead after being approved by the House, Brainard doesn’t see persistent inflation pressures in the coming years.

“A burst of transitory inflation seems more probable than a durable shift above target in the inflation trend and an unmooring of inflation expectations to the upside,” she said, adding that fiscal tailwinds to growth early this year are likely to transition to headwinds sometime thereafter.

Noting that inflation has averaged slightly below 2 per cent for over a quarter-century, Brainard said reaching the central bank’s inflation target will require patience.

“We have pledged to hold the policy rate in its current range until not only has inflation risen to 2 per cent but it is also on track to moderately exceed 2 per cent for some time.

“Even after economic conditions warrant liftoff, changes in the policy rate are likely to be only gradual,” she added.

The Fed decided in January to hold its policy rate near zero and continue its asset purchase program at least at the current pace of $120 billion per month until it sees “substantial further progress” in employment and inflation.

–IANS

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