Will the Fed tighten monetary policy? Let's take a look at how principal officials of the Fed view employment and inflation - part 1

After the GDP of the United States in the first quarter was converted into an annual rate, it increased by 6.4% year-on-year, and the actual quarterly growth was 0.4% year-on-year. It is expected that the economic growth rate in the second quarter will be even higher.

Although the US economy is gradually recovering, the job market does not seem to be picking up in line with economic growth. The number of new non-agricultural jobs in the United States in April was only 266,000, which was far below market expectations. According to analysis, it is the excessive financial subsidies that cause people to be unwilling to work. At the same time, the level of inflation in the United States is rising rapidly. The latest data released by the U.S. Department of Labor shows that in April, the U.S. CPI in April and the core CPI in April increased by 4.2% and 3% respectively year-on-year, which was significantly higher than market expectations. Data released by IHS Markit also showed that among the major advanced economies, the average sales price of goods and services in the United States increased the most in April. Among them, the delivery date of global suppliers in April was extended at a record speed due to the insufficient production capacity and further delays in logistics, which includes container shortages and port congestion. Supply delays are particularly common in Europe and the United States.

What will the Fed do when the pace of employment and inflation has not yet been coordinated? At present, the signal released by the Federal Reserve to the outside world is that "doves still occupy a dominant position", and the Fed believes that the U.S. job market still needs further development. The market also expects that the Fed will not raise interest rates in the near future. We know that the Federal Reserve's statutory goal is to maximize employment and maintain price stability, and Federal Reserve officials with voting rights will vote to determine the direction of monetary policy. Therefore, it is important to understand the views of Federal Reserve officials with voting rights on employment and inflation at the Federal Open Market Committee (FOMC) meetings, from which we can find clues to the direction of policy.