Federal Reserve policy makers say they want to avoid a sudden increase in interest rates when the time comes to start unwinding record monetary easing. A shrinking federal budget deficit is likely to help them meet that goal.
Unemployment in the U.S. may fall faster than expected as baby boomers enter retirement, reducing the portion of people in the workforce, according to Drew Matus, senior U.S. economist at UBS Securities LLC.
Facing the risk of a fourth straight summertime slowdown, Federal Reserve officials raised the prospect of increasing the monthly pace of bond buying above $85 billion to guard against any slump in growth or employment.
Job growth surged last month as automakers, builders and retailers pushed the unemployment rate to a four-year low, defying concerns that budget battles in Washington would harm the economic expansion.
The U.S. Federal Reserve may drop language promising “exceptionally low” interest rates through the middle of next year from its policy statement, according to Drew Matus, senior U.S. economist at UBS Securities LLC.
Employers in the U.S. added more workers than forecast in July, easing concern the three-year expansion is faltering. Bigger payroll gains may be necessary to reduce an unemployment rate that climbed to a five-month high.