San Francisco Federal Reserve President: U.S. economy has recovered

San Francisco Fed President John Williams says America has ‘largely attained the recovery we’ve been after for the past nine years.’

Congratulations, America. The economy is finally back to normal.

That’s what John Williams, the head of the Federal Reserve Bank of San Francisco, declared Wednesday …

Unemployment peaked at 10% after the Great Recession. Today it’s just 4.7%, a level Williams said constitutes “full employment” because there will always be some job seekers, even in a healthy economy. Inflation is also “nearing” the Fed’s goal of 2%, he said. The Fed raised interest rates this month for only the third time since the financial crisis. The central bank is expected to raise rates two more times this year, but Williams hinted again that three more hikes might be appropriate in 2017.

He said Wednesday that the Fed is as close “as we’ve ever been” to achieving its goals of full employment and stable inflation.

Read more at CNN Money: San Francisco Federal Reserve president: U.S. economy has recovered

Fed Raises Benchmark Rate as Inflation Approaches 2% Target

The Federal Reserve raised its benchmark lending rate a quarter point and continued to project two more increases this year, signaling more vigilance as inflation approaches its target.

“In view of realized and expected labor market conditions and inflation, the committee decided to raise the target range for the federal funds rate,” the Federal Open Market Committee said in its statement Wednesday. “Near-term risks to the economic outlook appear roughly balanced.”

Investors had almost fully expected the increase to a range of 0.75 percent to 1 percent following unusually clear signals from policy makers including Chair Janet Yellen, who began a press conference at 2:30 p.m. in Washington.

Read more at Bloomberg News: Fed Raises Benchmark Rate as Inflation Approaches 2% Target

US created 235,000 jobs in Feb, vs 190,000 expected

Nonfarm payrolls increased by 235,000 in February and the unemployment rate was 4.7 percent in the first full month of President Donald Trump’s term, the Bureau of Labor Statistics reported Friday.

Read more at CNBC: US created 235,000 jobs in Feb, vs 190,000 expected

Construction led the way, growing by 58,000, the most in almost a decade, while manufacturing also posted strong gains with 28,000 new jobs.

Economists surveyed by Reuters had expected the economy to add 190,000 jobs and the unemployment rate to tick down to 4.7 percent. That contrasts with the upwardly revised January numbers of 238,000 new positions and an unemployment rate of 4.8 percent.

Read more at CNBC: US created 235,000 jobs in Feb, vs 190,000 expected

How Trump could soon be at war with Fed Chair Yellen

Janet Yellen is heading toward a potential war with President Donald Trump. A hike in interest rates could put a lid on a stock market rally the president loves to celebrate.

Read more at Politico: How Trump could soon be at war with Yellen – POLITICO

The Federal Reserve chair, with one year left in her tenure as the world’s most powerful central banker, is almost certain to announce a hike in interest rates by one-quarter point next Wednesday.

She and her Fed colleagues could boost rates further throughout this year, potentially putting a lid on a stock market rally the president loves to celebrate and taking the punch out of a package of tax cuts and infrastructure spending the White House hopes will juice the economy next year and beyond.

And if the Fed conducts an aggressive campaign of rate increases, economists say it could spur a recession in Trump’s first term that dogs Republicans in the 2018 midterm elections and complicates the president’s potential reelection bid in 2020.

Read more at Politico: How Trump could soon be at war with Yellen – POLITICO

NYTimes: Huge January Trade Deficit Shows Trump’s Hard Job Ahead

President Trump says that the United States’ persistent trade deficit is a scourge that must be eliminated. But new data Tuesday shows the complexity of the costs and benefits of trade — and how reducing the trade deficit, if not done right, could leave Americans worse off.

What really matters is not whether the trade deficit is rising or falling. What matters is why.

The trade deficit rose 9.6 percent in January, to the highest level since 2012 (though it remains lower as a share of the total economy). It’s in the details of that $48.5 billion gap between what the United States exported and what it imported, though, that you see why the economy is more complex than the “trade deficits are bad” framing of the Trump administration.

Read more at The New York Times: The Huge January Trade Deficit Shows Trump’s Hard Job Ahead – NYTimes.com