The Federal Reserve’s policy of seeking to drive down the U.S. unemployment rate is effective, and the level of slack in the economy justifies an accommodative stance, according to two separate papers by top Fed officials.
U.S. stocks advanced, sending the Dow Jones Industrial Average to a record close, as Federal Reserve officials said economic weakness warrants continued stimulus and investors await data this week on jobs and growth.
The Federal Reserve should lower its jobless-rate threshold for raising interest rates to 5.5 percent if it takes both the unemployment and participation rates into account, keeping its main interest rate lower for longer, according to Goldman Sachs Group Inc. research.
Treasury 10-year note yields fell from almost the highest level in three weeks on speculation the Federal Reserve may keep its target interest rate at almost zero for an extended period when it starts stimulus cuts.
A gauge of U.S. company credit risk declined from the highest level in three weeks as Federal Reserve officials advocated persistent economic stimulus. A unit of Alcatel-Lucent SA plans to issue $750 million in notes.